AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 19, 1997

REGISTRATION NO. 333-34259

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1

FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

ING GROEP N.V.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

THE NETHERLANDS 6311/6712 NOT APPLICABLE
(STATE OF JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)

ING GROEP N.V.
STRAWINSKYLAAN 2631
P.O. BOX 810, 1000 AV AMSTERDAM
THE NETHERLANDS
TELEPHONE: 31-20-541-54-11
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------

DAVID NICKELSON
CORPORATION SERVICE COMPANY
80 STATE STREET, 6TH FLOOR
ALBANY, NEW YORK 12207
TELEPHONE: 518-433-4740

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------

Copies to:

WILLIAM D. TORCHIANA, ESQ. G.R. NEUMANN, ESQ.
SULLIVAN & CROMWELL NYEMASTER, GOODE, VOIGTS,
125 BROAD STREET WEST, HANSELL & O'BRIEN, P.C.
NEW YORK, NY 10004-2498 700 WALNUT STREET, SUITE 1600
212-558-4000 DES MOINES, IOWA 50309
515-283-3121

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the Registration Statement becomes effective.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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2

EQUITABLE
OF IOWA COMPANIES

September 22, 1997

Dear Shareholders:

On behalf of the Board of Directors and management, I cordially invite you
to attend a Special Meeting of Shareholders of Equitable of Iowa Companies (the
"Company") to be held at the Company's principal executive offices, 909 Locust
Street, Des Moines, Iowa, on October 23, 1997, at 10:00 a.m., Des Moines local
time.

At this important meeting, you will be asked to consider and vote on a
proposal to approve an Agreement and Plan of Merger, dated as of July 7, 1997
(the "Merger Agreement"), providing for the merger (the "Merger") of the Company
with and into a wholly-owned subsidiary of ING Groep N.V.

We have enclosed the following items relating to the Special Meeting and
the Merger:

1. Prospectus/Proxy Statement;

2. Proxy card;

3. Pre-addressed return envelope for the proxy card marked "Proxy";

4. Election Form and Letter of Transmittal; and

5. Pre-addressed return envelope marked "Election Form and Letter of
Transmittal".

The Prospectus/Proxy Statement and related proxy materials set forth (or
incorporate by reference) financial data and other important information
relating to the Company and ING Groep N.V. and describe the terms and conditions
of the proposed Merger. The Board of Directors requests that you carefully
review these materials before completing the enclosed proxy card or attending
the Special Meeting.

YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER AGREEMENT IS IN THE
BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS. ACCORDINGLY, THE BOARD OF
DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE
COMPANY VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT.

J.P. Morgan Securities Inc., an investment banking firm, has issued its
written opinion to your Board of Directors dated July 7, 1997 stating that, as
of such date, the consideration to be paid to the holders of shares of the
common stock of the Company in the Merger was fair, from a financial point of
view, to such holders. A copy of the opinion is attached as Annex B to the
Prospectus/Proxy Statement.

SHAREHOLDER APPROVAL OF THE MERGER AGREEMENT IS A CONDITION TO THE
CONSUMMATION OF THE MERGER. Accordingly, it is important that your shares be
represented at the Special Meeting, whether or not you plan to attend the
Special Meeting in person. Please complete, sign and date the enclosed proxy
card and return it in the enclosed pre-addressed envelope marked "Proxy" which
requires no postage if mailed within the United States. If you later decide to
attend the Special Meeting and vote in person, or if you wish to revoke your
proxy for any reason prior to the vote at the Special Meeting, you may do so and
your proxy will have no further effect. You may revoke your proxy by delivering
to the Secretary of the Company, a written notice of revocation bearing a later
date than the proxy, or any later dated proxy relating to the same shares, or by
attending the Special Meeting and voting in person. Attendance at the Special
Meeting will not in itself constitute the revocation of a proxy.

This proxy card and Special Meeting are only for the purpose of approval of
the Merger Agreement. The Election Form and Letter of Transmittal are to be used
by you to make an election indicating your

preference in exchanging your Company shares for cash or American Depositary
Shares representing Bearer Depositary Receipts in respect of Ordinary Shares of
ING Groep N.V.

The Board of Directors and management of the Company appreciate your
continued support. If you need assistance in completing your proxy card or if
you have any questions about the Prospectus/Proxy Statement, please feel free to
contact the General Counsel and Secretary of the Company at (515) 698-7000.

Sincerely,
/s/ FRED S. HUBBELL
FRED S. HUBBELL
Chairman, President and
Chief Executive Officer
4

EQUITABLE
OF IOWA COMPANIES
909 LOCUST STREET
DES MOINES, IOWA 50309

------------------------

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD
OCTOBER 23, 1997

------------------------

To The Shareholders of Equitable of Iowa Companies:

Notice is hereby given that a Special Meeting of Shareholders of Equitable
of Iowa Companies, an Iowa corporation (the "Company"), will be held at the
Company's principal executive offices, 909 Locust Street, Des Moines, Iowa, on
October 23, 1997, at 10:00 a.m., Des Moines local time (the "Special Meeting"),
for the following purposes:

(1) To consider and vote on a proposal to approve the Agreement and
Plan of Merger, dated as of July 7, 1997 (the "Merger Agreement"), among
the Company, ING Groep N.V., a Netherlands corporation and PFHI Holdings,
Inc., a Delaware corporation and a wholly-owned subsidiary of ING Groep
N.V. ("Merger Sub") pursuant to which, and on the terms and conditions
thereof, the Company will be merged with and into Merger Sub (the
"Merger"), with Merger Sub as the surviving entity, and each share of
common stock, no par value, of the Company (a "Share") outstanding
immediately prior to the effective time of the Merger will be converted
into and become exchangeable for, at the election of the holder thereof
(but subject to certain limitations and adjustments) either (i) $68 in cash
(the "Cash Consideration") or (ii) a number of American Depositary Shares
("ADSs"), evidenced by American Depositary Receipts, with each ADS
representing one Bearer Depositary Receipt, each of which in turn
represents an interest in one Ordinary Share, nominal value NLG 1 per
Ordinary Share, of ING Groep N.V., equal to the number derived by dividing
$68 by the average closing price per ADS (the "Average Closing Price") as
reported on the New York Stock Exchange, Inc. Composite Tape for the ten
trading days ending on the last trading day prior to the closing of the
Merger (the "Stock Consideration"), all as more fully set forth in the
attached Prospectus/Proxy Statement. Cash will be paid in lieu of
fractional ADSs. Each shareholder of the Company may elect to receive the
Cash Consideration, the Stock Consideration or a combination thereof, or
make no election, subject to certain limitations and allocation procedures
as more fully set forth in the attached Prospectus/Proxy Statement.
Shareholders of the Company are advised to obtain current market quotations
for ADSs and Shares.

(2) To consider such procedural matters as may properly come before
the Special Meeting or any adjournment or postponement thereof.

The record date for determining the holders of Shares entitled to receive
notice of, and to vote at, the Special Meeting or any adjournment or
postponement thereof has been fixed as of the close of business on September 15,
1997. Approval by the Company's shareholders of the Merger Agreement requires
the affirmative vote of the holders of a majority of the outstanding Shares
entitled to vote at the meeting.

Any holder of Shares who (1) files with the Company prior to the Special
Meeting a written notice of the shareholder's intent to demand payment for the
shareholder's Shares, (2) does not vote in favor of
5

the Merger, and (3) demands payment of the fair value of the Shares, shall be
entitled to payment of the fair value of the shareholder's Shares under the
applicable provisions of Division XIII of the Iowa Business Corporation Act, as
set forth in Annex C to the attached Prospectus/Proxy Statement.

Information regarding the Merger and related matters is contained in the
accompanying Prospectus/Proxy Statement and the Annexes thereto, which are
incorporated by reference herein and form a part of this Notice.

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE MARKED "PROXY". THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE VOTE
AT THE SPECIAL MEETING BY FOLLOWING THE PROCEDURES SET FORTH IN THE ACCOMPANYING
PROSPECTUS/PROXY STATEMENT.

THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE MERGER
AGREEMENT IS IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS.
ACCORDINGLY, THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT
THE SHAREHOLDERS OF THE COMPANY VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT.

BY ORDER OF THE BOARD OF DIRECTORS
LOGO
JOHN A. MERRIMAN
Secretary
Des Moines, Iowa

September 22, 1997

PLEASE DO NOT SEND ANY SHARE CERTIFICATES WITH YOUR PROXY CARD. YOUR SHARE
CERTIFICATES SHOULD BE SENT, ALONG WITH A PROPERLY EXECUTED AND COMPLETED
ELECTION FORM AND LETTER OF TRANSMITTAL, IN THE ENVELOPE MARKED "ELECTION FORM
AND LETTER OF TRANSMITTAL" SUFFICIENTLY IN ADVANCE OF THE ELECTION DEADLINE SO
THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT PRIOR THERETO.

PROSPECTUS/PROXY STATEMENT

ING GROEP N.V.
PROSPECTUS FOR UP TO 32,772,834 BEARER DEPOSITARY RECEIPTS
IN RESPECT OF ORDINARY SHARES
(NOMINAL VALUE 1 GUILDER PER ORDINARY SHARE)

IN THE FORM OF AMERICAN DEPOSITARY SHARES

------------------------

EQUITABLE OF IOWA COMPANIES
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON OCTOBER 23, 1997

This Prospectus/Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Equitable of Iowa
Companies, an Iowa corporation (the "Company"), for use at the special meeting
of shareholders of the Company to be held at the Company's principal executive
offices located at 909 Locust Street, Des Moines, Iowa, on October 23, 1997 at
10:00 a.m., Des Moines local time, and at any adjournments or postponements
thereof (the "Special Meeting").

At the Special Meeting, the shareholders of record as of the close of
business on September 15, 1997 will consider and vote upon a proposal to approve
the Agreement and Plan of Merger, dated as of July 7, 1997 (the "Merger
Agreement"), among the Company, ING Groep N.V., a Netherlands corporation, and
PFHI Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of ING
Groep N.V. ("Merger Sub"). A copy of the Merger Agreement is attached as Annex A
to this Prospectus/Proxy Statement. Pursuant to the Merger Agreement, and on the
terms and conditions thereof, the Company will be merged with and into Merger
Sub (the "Merger"), with Merger Sub as the surviving entity, and each share of
common stock, no par value, of the Company (a "Share") outstanding immediately
prior to the effective time of the Merger (the "Effective Time") will be
converted into and become exchangeable for, at the election of the holder
thereof (but subject to the limitations and adjustments described herein) either
(i) $68 in cash (the "Cash Consideration") or (ii) a number of American
Depositary Shares ("ADSs"), evidenced by American Depositary Receipts ("ADRs"),
with each ADS representing one Bearer Depositary Receipt ("Bearer Receipt"),
each of which in turn represents an interest in one Ordinary Share, nominal
value NLG 1 per Ordinary Share, of ING Groep N.V. ("Ordinary Share"), equal to
the number of ADSs derived by dividing $68 by the average closing price per ADS
(the "Average Closing Price") as reported on the New York Stock Exchange, Inc.
("NYSE") Composite Tape for the ten trading days ending on the last trading day
prior to the closing of the Merger (the "Stock Consideration"). Cash will be
paid in lieu of fractional ADSs. Each shareholder of the Company may elect to
receive the Cash Consideration, the Stock Consideration or a combination
thereof, or make no election. Subject to certain adjustments described herein,
no less than 50% or more than 60% of the Shares outstanding at the Effective
Time may be converted into the right to receive ADSs. Accordingly, each
shareholder may receive more or less cash or ADSs than such holder has elected
depending on the elections made by all shareholders.

This Prospectus/Proxy Statement and the accompanying proxy card are first
being mailed to shareholders of the Company on or about September 22, 1997.

This Prospectus/Proxy Statement also constitutes the prospectus of ING filed
with the Securities and Exchange Commission (the "Commission") as part of a
Registration Statement on Form F-4 under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the ADSs (and the Bearer Receipts and
Ordinary Shares represented thereby) to be issued to shareholders of the Company
upon the consummation of the Merger. All information concerning ING contained in
this Prospectus/Proxy Statement has been furnished by ING and all information
concerning the Company prior to the Merger contained or incorporated by
reference in this Prospectus/Proxy Statement has been furnished by the Company.

The principal securities exchange on which the Bearer Receipts are listed is
the AEX Stock Exchange (formerly the Amsterdam Stock Exchange). The reported
last sales price for the Bearer Receipts on the AEX Stock Exchange as of the
close of business on September 16, 1997 was NLG 90.00 per Bearer Receipt,
equivalent to $45.27, translated at the exchange rate of NLG 1.9880 = $1.00
prevailing on that date. The outstanding ADSs are listed on the NYSE under the
symbol "ING". The last reported sale price of ADSs on the NYSE on September 16,
1997 was $46.0625 per ADS and the last reported sale price of the Shares on the
NYSE on September 16, 1997 was $66.75 per share. See "MARKET PRICE INFORMATION".

------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 11 OF THIS PROSPECTUS/ PROXY STATEMENT FOR
A DISCUSSION OF CERTAIN MATTERS SHAREHOLDERS SHOULD CONSIDER BEFORE VOTING FOR
OR AGAINST THE APPROVAL OF THE MERGER AGREEMENT.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------

The date of this Prospectus/Proxy Statement is September 22, 1997.

NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS/PROXY STATEMENT IN
CONNECTION WITH THE SOLICITATION OF PROXIES OR THE OFFERING OF SECURITIES MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY ING, THE COMPANY OR ANY OTHER PERSON.
THIS PROSPECTUS/PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES, OR THE SOLICITATION OF A PROXY,
IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE ANY
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS/PROXY STATEMENT NOR ANY DISTRIBUTION OF SECURITIES HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF ING OR THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

ENFORCEABILITY OF CIVIL LIABILITY UNDER UNITED STATES FEDERAL SECURITIES LAWS

ING Groep N.V. is incorporated under the laws of the Netherlands, and all
of the members of its Supervisory Board and Executive Board and certain of the
experts named herein are non-residents of the United States. A substantial
portion of the assets of ING Groep N.V. and its direct and indirect subsidiaries
and such non-resident persons are located outside the United States. As a
result, it may not be possible for investors to effect service of process within
the United States upon such persons or to enforce in United States courts
judgments against such persons and judgments of such courts predicated upon the
civil liability provisions of the United States Federal securities laws. ING has
been advised by its Dutch legal counsel that the United States and the
Netherlands do not currently have a treaty providing for reciprocal recognition
and enforcement of judgments (other than arbitration awards) in civil and
commercial matters. Therefore, a final judgment for the payment of money
rendered by any Federal or State court in the United States based on civil
liability, whether or not predicated solely upon the Federal securities laws of
the United States, would not be directly enforceable in the Netherlands.
However, if the party in whose favor such final judgment is rendered brings a
new suit in a competent court in the Netherlands, such party may submit to the
Netherlands court the final judgment that has been rendered in the United
States. If the Netherlands court finds that the jurisdiction of the Federal or
State court in the United States has been based on grounds that are
internationally acceptable and that proper legal procedures have been observed,
the court in the Netherlands would, in principle, give binding effect to the
final judgment that has been rendered in the United States unless such judgment
contravenes the Netherlands' public policy.

State insurance holding company statutes in the United States applicable to
ING's United States insurance subsidiaries generally provide that no person may
acquire control of ING, and thus indirect control of its United States insurance
subsidiaries, without the prior approval of the appropriate insurance
regulators. Generally, any person who acquires beneficial ownership of 10% or
more of the outstanding Ordinary Shares or voting power of ING (including
through ADSs) would be presumed to have acquired such control unless the
appropriate insurance regulators upon application determine otherwise.

The United Kingdom's Insurance Companies Act 1982 requires the prior
approval by the Department of Trade and Industry of anyone proposing to become a
"controller" of an insurance company regulated under such Act. Any company or
individual that directly or indirectly exercises 15% or more of the voting power
at a general meeting of a regulated insurance company is considered a
"controller". A purchaser of more than 15% of the outstanding Ordinary Shares
will be a controller of ING's United Kingdom insurance subsidiaries.

FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE FOR THE STATE
OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING, NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY
STATEMENT.

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PRESENTATION OF INFORMATION

In this Prospectus, references to "USD", "dollars", "U.S. dollars" or "$"
are to United States dollars and references to "NLG" or "guilders" are to Dutch
guilders. ING publishes its consolidated financial statements in Dutch guilders.
Solely for the convenience of the reader, this Prospectus/Proxy Statement
contains translations of certain guilder amounts into U.S. dollars at specified
rates. These translations should not be construed as representations that the
translated amounts actually represent such dollar or guilder amounts, as the
case may be, or could be converted into U.S. dollars or guilders, as the case
may be, at the rates indicated or at any other rate. Unless otherwise stated,
the translations of Dutch guilders into U.S. dollars have been made at the rate
of NLG 1.9630 to $1.00, the noon buying rate in New York City for cable
transfers in guilders as certified for customs purposes by the Federal Reserve
Bank of New York (the "Noon Buying Rate") on June 30, 1997. On September 16,
1997, the Noon Buying Rate was NLG 1.9880 to $1.00. See "CURRENCY TRANSLATIONS
AND EXCHANGE RATES" for certain historical information regarding the Noon Buying
Rate. Except as otherwise noted, financial statement amounts set forth in this
Prospectus/Proxy Statement are presented in accordance with generally accepted
accounting principles in the Netherlands ("Dutch GAAP"), which differ in certain
significant respects from generally accepted accounting principles in the United
States ("U.S. GAAP"). Reference is made to Note 7 of Notes to the Consolidated
Financial Statements for a description of the significant differences between
Dutch GAAP and U.S. GAAP and a reconciliation of certain income statement and
balance sheet items to U.S. GAAP. Certain amounts set forth herein may not sum
due to rounding.

The Glossary includes the definitions of certain insurance, banking and
other terms which appear in bold face the first time they appear in the
Prospectus/Proxy Statement.

Unless otherwise indicated, GROSS PREMIUMS, GROSS PREMIUMS WRITTEN and
GROSS WRITTEN PREMIUMS as referred to in this Prospectus/Proxy Statement include
premiums (whether or not earned) for insurance policies written during a
specified period, without deduction for premiums ceded, and NET PREMIUMS, NET
PREMIUMS WRITTEN and NET WRITTEN PREMIUMS include premiums (whether or not
earned) for insurance policies written during a specified period, after
deduction for premiums ceded.

In this Prospectus/Proxy Statement, "ING Groep N.V." refers to the ING
holding company incorporated under the laws of the Netherlands, and "ING" refers
to ING Groep N.V. and its consolidated subsidiaries. ING Groep N.V.'s primary
insurance and banking subholdings are ING Verzekeringen N.V. (together with its
consolidated subsidiaries, "ING Insurance") and ING Bank N.V. (together with its
consolidated subsidiaries, "ING Bank"). See Note 1 of Notes to the Consolidated
Financial Statements.

CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS

Certain of the statements contained in this Prospectus/Proxy Statement that
are not historical facts, including, without limitation, certain statements made
in the sections hereof entitled "DIVIDENDS", "INFORMATION REGARDING ING", "ING
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION", "ING BUSINESS OPERATIONS", "SELECTED STATISTICAL INFORMATION ON
BANKING OPERATIONS OF ING" and "ING RISK MANAGEMENT" are statements of future
expectations and other forward-looking statements that are based on management's
current views and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance or events to differ
materially from those expressed or implied in such statements. Actual results,
performance or events may differ materially from those in such statements due
to, without limitation, (i) general economic conditions, including, in
particular, economic conditions in the Netherlands, (ii) performance of
financial markets, including emerging markets, (iii) the frequency and severity
of insured loss events, (iv) mortality and morbidity levels and trends, (v)
persistency levels, (vi) interest rate levels, (vii) currency exchange rates,
including the Dutch guilder - U.S. dollar exchange rate, (viii) increasing
levels of competition in the Netherlands and emerging markets, (ix) changes in
laws and regulations, including monetary convergence and the European Monetary
Union, (x) changes in the policies of central banks and/or foreign governments
and (xi) general competitive factors, in each case on a global, regional and/or
national basis. See "RISK FACTORS" and "ING MANAGEMENT'S

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9

DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION -- Factors Affecting Result from Operations".

AVAILABLE INFORMATION

ING is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), applicable to foreign private
issuers and in accordance therewith files reports, including annual reports on
Form 20-F (which it will first file in 1998 with respect to fiscal year 1997),
and other information with the Commission. The Company is subject to the
informational requirements of the Exchange Act and in accordance therewith files
periodic reports, proxy statements and other information with the Commission.
Such reports and other information with respect to ING may be obtained, upon
written request, from Morgan Guaranty Trust Company of New York as the
Depositary (the "Depositary") under the Depositary Agreement referred to under
"DESCRIPTION OF AMERICAN DEPOSITARY SHARES" located at 60 Wall Street, New York,
New York 10260. Such reports and other information with respect to ING and the
Company also may be inspected and copied at prescribed rates at the public
reference facilities of the Commission located at 450 Fifth Street, N.W.,
Washington, DC 20549 and at the Commission's regional offices at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Room 1400, Chicago, Illinois 60661-2511 and, with respect to
documents filed by the Company electronically with the Commission, at the
Commission's web site at http://www.sec.gov. In addition, such material may also
be inspected and copied at the offices of the NYSE, 20 Broad Street, New York,
New York 10005, on which the ADSs and Shares are listed.

ING will furnish the Depositary with annual reports and accounts in
English, which will include a review of operations, annual audited consolidated
financial statements prepared in accordance with Dutch GAAP, together with a
reconciliation of certain income statement and balance sheet items to U.S. GAAP,
and an opinion thereon by its independent public accountants. ING also will
furnish the Depositary with quarterly reports in English, which will include
unaudited quarterly consolidated financial information prepared in accordance
with Dutch GAAP. The Depositary has agreed with ING that, upon receipt of such
reports, it will promptly mail such reports to all registered holders of the
ADSs. ING also will furnish to the Depositary summaries in English or an English
version of all notices of its shareholders' meetings and other reports and
communications that are made generally available to shareholders. The Depositary
will arrange for the mailing of such documents to all registered holders of the
ADSs. ING also makes its annual and quarterly reports and accounts in English
generally available. As a foreign private issuer, ING is exempt from the rules
under the Exchange Act prescribing the furnishing and the content of proxy
statements.

ING has filed with the Commission a Registration Statement on Form F-4
(referred to herein, together with all amendments and exhibits, as the
"Registration Statement") under the Securities Act. This Prospectus/Proxy
Statement does not contain all of the information set forth in the Registration
Statement, certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. Statements contained in this Prospectus/Proxy
Statement as to the contents of any contract or other document filed as an
exhibit to the Registration Statement summarize the material terms thereof, but
are not necessarily complete. With respect to each such document, reference is
made to the copy of the document filed as an exhibit to or incorporated by
reference in the Registration Statement. For further information, reference is
hereby made to the Registration Statement.

ING's principal executive offices are located at Strawinskylaan 2631, 1077
ZZ Amsterdam, P.O. Box 810, 1000 AV Amsterdam, the Netherlands, telephone:
31-20-541-54-11.

The Company's principal executive offices are located at 909 Locust Street,
Des Moines, Iowa 50306, telephone: 515-698-7000.

THIS PROSPECTUS/PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WITH
RESPECT TO THE COMPANY WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH.
SUCH DOCUMENTS (NOT INCLUDING EXHIBITS THERETO, UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE IN THE INFORMA-

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10

TION INCORPORATED HEREIN) ARE AVAILABLE WITHOUT CHARGE TO ANY SHAREHOLDER OF THE
COMPANY, INCLUDING ANY BENEFICIAL OWNER, UPON WRITTEN OR ORAL REQUEST DIRECTED
TO THE COMPANY AT 909 LOCUST STREET, DES MOINES, IOWA 50306, TEL. 515-698-7000,
ATTN: GENERAL COUNSEL AND SECRETARY. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS IN ADVANCE OF THE SPECIAL MEETING TO WHICH THIS PROSPECTUS/PROXY
STATEMENT RELATES, ANY REQUEST SHOULD BE MADE BY OCTOBER 16, 1997.

INCORPORATION BY REFERENCE

The following documents heretofore filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference:

(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;

(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997;

(c) The Company's Current Reports on Forms 8-K filed on September 16,
1997; July 11, 1997; July 10, 1997; June 16, 1997 and April 4, 1997; and

(d) The Company's proxy statement on Schedule 14A filed on March 20,
1997.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus/Proxy Statement and
prior to the date of the Special Meeting shall be deemed to be incorporated by
reference in this Prospectus/Proxy Statement and to be a part hereof from the
date of filing of such documents. The information relating to the Company
contained in this Prospectus/Proxy Statement does not purport to be
comprehensive and should be read together with the information in the documents
incorporated by reference.

Any statement contained in this Prospectus/Proxy Statement or in a document
incorporated or deemed to be incorporated by reference in this Prospectus/Proxy
Statement will be deemed to be modified or superseded for purposes of this
Prospectus/Proxy Statement to the extent that a statement contained herein or in
any subsequently filed document which is or is deemed to be incorporated by
reference modifies or supersedes such statement. Any statement so modified or
superseded will not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus/Proxy Statement.

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TABLE OF CONTENTS

ENFORCEABILITY OF CIVIL LIABILITY UNDER UNITED STATES FEDERAL SECURITIES LAWS......... i
PRESENTATION OF INFORMATION........................................................... ii
CAUTIONARY STATEMENT WITH RESPECT TO FORWARD-LOOKING STATEMENTS....................... ii
AVAILABLE INFORMATION................................................................. iii
INCORPORATION BY REFERENCE............................................................ iv
SUMMARY............................................................................... 1
ING................................................................................. 1
The Company......................................................................... 1
Special Meeting of Shareholders of the Company...................................... 1
Purpose of the Meeting........................................................... 1
Date, Time and Place............................................................. 1
Record Date for Meeting.......................................................... 1
Number of Shares Outstanding as of Record Date................................... 2
Recommendation of the Board of Directors of the Company.......................... 2
Opinion of Financial Advisor........................................................ 2
Required Vote....................................................................... 2
The Merger.......................................................................... 2
Reasons for the Merger........................................................... 2
Certain Tax Consequences......................................................... 2
Required Regulatory Approvals.................................................... 3
Dissenters' Rights............................................................... 3
Accounting Treatment............................................................. 3
The Merger Agreement................................................................ 3
General.......................................................................... 3
Exchange of Share Certificates; Allocation of Merger Consideration............... 4
Closing; Effective Time.......................................................... 5
Conditions to the Merger......................................................... 5
Termination of the Merger Agreement.............................................. 6
Waiver and Amendment of the Merger Agreement..................................... 6
The Stock Consideration............................................................. 6
Comparison of Rights of Holders of the Shares and ADSs.............................. 7
ING Summary Selected Consolidated Financial Data.................................... 7
Company Summary Selected Consolidated Financial Data................................ 10
RISK FACTORS.......................................................................... 11
Impact of Market Conditions on Result from Operations............................... 11
Competition......................................................................... 11
Impact of Changes in Foreign Exchange Rates and Interest Rates...................... 12
Restrictions on Shareholder Rights.................................................. 12
COMPARATIVE PER SHARE DATA............................................................ 13
MARKET PRICE INFORMATION.............................................................. 14
MARKET VALUE OF SECURITIES............................................................ 15
DIVIDENDS............................................................................. 15
CURRENCY TRANSLATIONS AND EXCHANGE RATES.............................................. 17
THE SPECIAL MEETING OF SHAREHOLDERS OF THE COMPANY.................................... 18
General............................................................................. 18
Date, Time and Place................................................................ 18
Matters to Be Considered at the Special Meeting..................................... 18
Record Date; Vote Required.......................................................... 18
Voting and Revocation of Proxies.................................................... 18
Solicitation of Proxies............................................................. 19

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Security Ownership of Certain Beneficial Owners and Management of the Company and
ING.............................................................................. 20
Dissenters' Rights of Shareholders of the Company................................... 21
THE MERGER............................................................................ 22
Background of the Merger............................................................ 22
Reasons for the Merger; Recommendation of the Company's Board of Directors.......... 24
Opinion of Financial Advisor........................................................ 25
Actuarial Appraisal................................................................. 29
Certain Federal Income Tax Consequences of the Merger............................... 30
Required Regulatory Approvals....................................................... 32
Resale of ADSs...................................................................... 33
Management and Operations After the Merger.......................................... 33
Interests of Certain Parties........................................................ 34
Dissenters' Rights of Shareholders of the Company................................... 39
Accounting Treatment................................................................ 41
THE MERGER AGREEMENT.................................................................. 41
General; Merger Consideration....................................................... 41
Closing; Effective Time............................................................. 42
Exchange of Share Certificates; Allocation of Merger Consideration.................. 42
Lost, Destroyed or Stolen Certificates.............................................. 43
Revocation of Election Form......................................................... 43
No Fractional ADSs.................................................................. 43
Representations and Warranties...................................................... 43
Company Interim Operations.......................................................... 44
ING Interim Operations.............................................................. 44
Certain Covenants of the Company and ING Groep N.V. ................................ 45
Conditions to Each Party's Obligations.............................................. 46
Termination of the Merger Agreement................................................. 47
Termination Fee..................................................................... 47
Waiver and Amendment of the Merger Agreement........................................ 47
DESCRIPTION OF ORDINARY SHARES........................................................ 47
General............................................................................. 48
Dividends........................................................................... 48
Voting Rights....................................................................... 48
Adoption of Annual Accounts......................................................... 49
Liquidation Rights.................................................................. 49
Acquisition and Cancellation of Ordinary Shares..................................... 49
Limitations on Right to Hold or Vote the Ordinary Shares............................ 50
DESCRIPTION OF PREFERENCE SHARES...................................................... 50
DESCRIPTION OF CUMULATIVE PREFERENCE SHARES........................................... 51
DESCRIPTION OF WARRANTS............................................................... 52
DESCRIPTION OF OPTION RIGHTS.......................................................... 52
THE TRUST AND THE BEARER RECEIPTS..................................................... 53
Dividends, Other Distributions and Rights........................................... 54
Voting of the Ordinary Shares....................................................... 54
Administration of the Trust......................................................... 55
Termination of the Trust............................................................ 55
DESCRIPTION OF AMERICAN DEPOSITARY SHARES............................................. 55
American Depositary Receipts........................................................ 55
Deposit, Transfer and Withdrawal.................................................... 56
Dividends, Other Distributions and Rights........................................... 56
Record Dates........................................................................ 58
Voting of Deposited Securities...................................................... 59
Reports and Other Communications.................................................... 59

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Amendment and Termination of the Deposit Agreement.................................. 59
Charges of Depositary............................................................... 60
Liability of Holder for Taxes....................................................... 60
Transfer of American Depositary Receipts............................................ 61
Acquisition of ADSs................................................................. 61
General............................................................................. 61
Governing Law....................................................................... 62
COMPARISON OF CERTAIN RIGHTS OF SHAREHOLDERS OF THE COMPANY AND HOLDERS OF BEARER
RECEIPTS OR ORDINARY SHARES OF ING GROEP N.V........................................ 62
Amendment of Constituent Documents.................................................. 62
Voting Rights....................................................................... 63
Shareholders' Meetings.............................................................. 63
Action by Written Consent of Shareholders........................................... 64
Shareholder Nominations............................................................. 64
Election and Removal of Directors; Filling of Vacancies............................. 64
Dissenters' Rights.................................................................. 65
Preemptive Rights................................................................... 65
Dividends........................................................................... 66
Rights of Purchase and Acquisition.................................................. 67
Shareholder Votes on Certain Reorganizations........................................ 67
Rights of Inspection................................................................ 68
Limitation of Directors' Liability/Indemnification of Officers and Directors........ 68
Certain Provisions Relating to Business Combinations................................ 69
Shareholder Suits................................................................... 69
Conflict-of-Interest Transactions................................................... 69
Transfer Restrictions............................................................... 69
Shareholder Rights Agreement........................................................ 70
EXCHANGE CONTROLS..................................................................... 70
OBLIGATIONS OF SHAREHOLDERS TO DISCLOSE HOLDINGS...................................... 70
INFORMATION REGARDING ING............................................................. 71
General............................................................................. 71
Business............................................................................ 72
Insurance Operations................................................................ 73
Banking Operations.................................................................. 75
Asset Management.................................................................... 77
Strategy............................................................................ 78
CAPITALIZATION OF ING................................................................. 83
SELECTED CONSOLIDATED FINANCIAL DATA OF ING........................................... 84
ING MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION........................................................................... 87
Introduction........................................................................ 87
Factors Affecting Result from Operations............................................ 88
Recent Developments................................................................. 92
Consolidated Result from Operations................................................. 113
Consolidated Assets and Liabilities................................................. 115
Result from Operations by Business Segment.......................................... 117
Liquidity and Capital Resources..................................................... 151
SELECTED STATISTICAL INFORMATION ON BANKING OPERATIONS OF ING......................... 158
Average Balances and Interest Rates................................................. 158
Analysis of Changes in Net Interest Income.......................................... 161

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Loan Portfolio...................................................................... 162
Risk Elements....................................................................... 164
ING BUSINESS OPERATIONS............................................................... 172
General............................................................................. 172
Management Centres.................................................................. 175
ING Nederland.................................................................... 175
ING Financial Services International............................................. 185
ING Corporate & Investment Banking............................................... 197
ING Asset Management............................................................. 201
Information Technology.............................................................. 204
Employees........................................................................... 204
Properties.......................................................................... 205
Legal Proceedings................................................................... 205
ING RISK MANAGEMENT................................................................... 206
Introduction........................................................................ 206
ING................................................................................. 206
ING Insurance Risk Management....................................................... 207
ING Bank Risk....................................................................... 209
ING Bank Risk Management............................................................ 210
Investments......................................................................... 217
Competition......................................................................... 223
Ratings............................................................................. 223
REGULATION AND SUPERVISION OF ING BUSINESSES.......................................... 225
General............................................................................. 225
Insurance........................................................................... 225
Banking............................................................................. 229
Broker-Dealer and Investment Management Activities.................................. 232
TAXATION.............................................................................. 234
Netherlands Taxation................................................................ 234
United States Taxation.............................................................. 235
INFORMATION REGARDING THE COMPANY..................................................... 237
MANAGEMENT OF ING..................................................................... 237
Supervisory Board of ING Groep N.V.................................................. 238
Executive Board of ING Groep N.V.................................................... 238
Compensation of Directors and Officers.............................................. 238
EXPERTS............................................................................... 239
LEGAL OPINIONS........................................................................ 239
GLOSSARY.............................................................................. G-1
ANNEX A: Agreement and Plan of Merger................................................. A-1
ANNEX B: Fairness Opinion of J.P. Morgan Securities, Inc.............................. B-1
ANNEX C: Dissenter's Rights Provisions of the Iowa Business Corporation Act........... C-1
CONSOLIDATED FINANCIAL STATEMENTS..................................................... F-1

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SUMMARY

The following summary is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this
Prospectus/Proxy Statement and the Annexes hereto.

ING

ING operates in 58 countries worldwide and is one of the world's largest
integrated financial service providers, offering a comprehensive range of life
and non-life insurance, commercial and investment banking, asset management and
related products and services. ING has extensive operations in Europe, North
America, South America, Africa, Asia and Australia. In 1996, ING had gross
written premiums of NLG 24,322 million, making it the largest insurer in the
Netherlands. Management believes that at December 31, 1995, ING was the 11th
largest insurer in Europe and the 32nd largest insurer in the world, based on
gross written premiums. At the end of 1996, ING Bank had total assets of NLG
311.4 billion, making it the third largest bank in the Netherlands. Management
believes that at December 31, 1995, ING Bank was the 32nd largest bank in Europe
and the 51st largest bank in the world based on total assets. Management also
believes that, based on consolidated total assets at December 31, 1995, ING was
the 33rd largest financial institution in the world. ING's products and services
are marketed under a variety of well-recognized and strong brand names,
including Nationale-Nederlanden, ING Bank and ING Barings worldwide; Postbank in
the Netherlands; Mercantile Mutual in Australia; NN Financial, Commerce Group,
Belair, Halifax and Western Union in Canada; and Life of Georgia, Southland
Life, Security Life, Indiana Insurance, Peerless Insurance and Excelsior
Insurance in the United States. For the year ended December 31, 1996, ING's
total income was NLG 47,551 million ($24,224 million) and its net profit was NLG
3,321 million ($1,692 million). ING had consolidated total assets of NLG 483.9
billion ($246.51 billion) at the end of 1996.

THE COMPANY

Equitable of Iowa Companies, a Des Moines, Iowa based insurance holding
company organized in 1977, is a provider of individual annuity and life
insurance products, targeting individuals and families throughout the United
States. Through its insurance subsidiaries, Equitable Life Insurance Company of
Iowa ("Equitable Life"), Golden American Life Insurance Company ("Golden
American") and USG Annuity & Life Company ("USG"), the Company offers its
products in all fifty states, Puerto Rico and the District of Columbia.
Equitable Life was founded in 1867 and is the oldest life insurance company west
of the Mississippi River. The Company began actively marketing annuity products
in 1988, principally through USG, which was acquired by the Company in 1988.
Golden American, which offers variable insurance products, was acquired by the
Company on August 13, 1996.

SPECIAL MEETING OF SHAREHOLDERS OF THE COMPANY

PURPOSE OF THE MEETING

DATE, TIME, AND PLACE

The Special Meeting will be held at the Company's principal executive
offices, 909 Locust Street, Des Moines, Iowa, on October 23, 1997, at 10:00
a.m., Des Moines local time.

RECORD DATE FOR MEETING

Only holders of record of the Shares at the close of business on September
15, 1997 (the "Record Date") will be entitled to notice of, and to vote at, the
Special Meeting.

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NUMBER OF SHARES OUTSTANDING AS OF RECORD DATE

On the Record Date, there were 32,170,396 Shares outstanding of which
32,058,396 are entitled to vote that were held by approximately 919 holders of
record. See "THE SPECIAL MEETING OF SHAREHOLDERS OF THE COMPANY -- Record Date;
Vote Required". As of the Record Date, directors and executive officers of the
Company and certain of their affiliates owned beneficially and in the aggregate
3,155,151 Shares (excluding Shares subject to exercisable options which have not
been exercised as of the Record Date); or approximately 9.8% of the Shares
entitled to vote at the Special Meeting. All of the Company's directors and
executive officers have indicated their intention to vote their Shares for
approval of the Merger Agreement.

RECOMMENDATION OF THE BOARD OF DIRECTORS OF THE COMPANY

The Board of Directors of the Company (the "Company Board") has determined
that the Merger Agreement is in the best interests of the Company and its
shareholders. Accordingly, the Company Board unanimously recommends that the
shareholders of the Company vote FOR the approval of the Merger Agreement.

OPINION OF FINANCIAL ADVISOR

J.P. Morgan Securities Inc., ("J.P. Morgan") the Company's financial
advisor, has delivered its written opinion to the Board of Directors of the
Company dated July 7, 1997 stating that, as of such date, the consideration to
be paid to the holders of Shares in the Merger was fair, from a financial point
of view, to such holders. The full text of the written opinion of J.P. Morgan,
which sets forth the assumptions made, the procedures followed, the matters
considered and the limits on the review undertaken by J. P. Morgan, is attached
as Annex B to this Prospectus/Proxy Statement and the holders of Shares are
urged to read carefully the opinion in its entirety. See "THE MERGER -- Opinion
of Financial Advisor".

REQUIRED VOTE

Approval by shareholders of the Company of the Merger Agreement requires
the affirmative vote of the holders of the majority of the outstanding Shares
entitled to vote at the Special Meeting.

THE MERGER

REASONS FOR THE MERGER

The recommendation of the Company Board is based upon a number of factors,
including, but not limited to, the financial terms of the Merger, the value to
be received by the shareholders of the Company in the Merger in relation to the
historical trading prices of the Shares, information concerning the business,
financial condition, results of operations and prospects of the Company and ING,
the financial advice and opinion rendered by J.P. Morgan as the Company's
financial advisor, review of the results of the Preliminary Actuarial Appraisal
(as defined herein), review of the terms of the Merger Agreement, the
anticipated benefits of the Merger to the Company's employees, insurance agents,
suppliers, customers, policyholders and creditors and the communities in which
the Company operates, the absence of apparent regulatory or other impediments to
the transaction and an assessment of the likelihood that the proposed
transaction would be consummated, the timing of the transaction including
current insurance industry consolidation and global financial services
integration and consideration of the strategic alternatives for the Company. See
"THE MERGER -- Background of the Merger", "-- Reasons for the Merger;
Recommendation of the Company's Board of Directors" and "-- Opinion of Financial
Advisor".

CERTAIN TAX CONSEQUENCES

As a condition to the Closing, Nyemaster, Goode, Voigts, West, Hansell &
O'Brien, P.C., counsel to the Company, will deliver their opinion to the effect
that, assuming the Merger occurs in accordance with the Merger Agreement, and
conditioned on the accuracy of certain representations made by ING and the
Company, no gain or loss will be recognized by ING or the Company as a result of
the Merger, and the Company shareholders will recognize no gain or loss as a
result of the exchange of their Shares solely for

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ADSs pursuant to the Merger, except with respect to cash received in lieu of
fractional ADSs, if any. If the consideration received in the Merger by a
Company shareholder consists entirely of cash, such shareholder will recognize a
taxable gain or loss, represented by the difference between such shareholder's
adjusted basis in the Shares surrendered and the amount of cash received. See
"THE MERGER -- Certain Federal Income Tax Consequences of the Merger" for a
discussion of tax consequences of receiving the Cash Consideration, the Stock
Consideration or a combination thereof. EACH COMPANY SHAREHOLDER IS URGED TO
CONSULT ITS OWN TAX ADVISOR TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER TO SUCH SHAREHOLDER.

REQUIRED REGULATORY APPROVALS

In addition to the requirement that the shareholders of the Company approve
the Merger Agreement, consummation of the Merger is also subject to receipt by
the parties of various regulatory consents and approvals including, but not
limited to, expiration or early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the declaration (and continuance) of effectiveness by the Commission of
the Registration Statement of which this Prospectus/Proxy Statement is a part,
approvals from insurance regulatory authorities in the states of Iowa, Delaware,
New York, and Oklahoma, and various other consents and approvals. To date,
approvals have been received from the insurance regulatory authorities in the
states of Iowa and Delaware. See "THE MERGER -- Required Regulatory Approvals".

DISSENTERS' RIGHTS

Under the Iowa Business Corporation Act (Chapter 490 Code of Iowa 1997)
(the "BCA"), a holder of Shares may, in lieu of the consideration such
shareholder would otherwise receive in the Merger, seek payment of the "fair
value" of such Shares and receive payment of such fair value in cash if the
Merger is consummated by following certain procedures set forth in Division XIII
of the BCA, the text of which is attached as Annex C to this Prospectus/Proxy
Statement. Failure to follow such procedures may result in a loss of such
shareholder's dissenters' rights. Any shareholder of the Company returning a
blank executed proxy card will be deemed to have approved the Merger Agreement,
thereby waiving any such dissenters' rights. See "THE MERGER -- Dissenters'
Rights of Shareholders of the Company".

ACCOUNTING TREATMENT

It is intended that the Merger will be accounted for under the purchase
method of accounting. See "THE MERGER -- Accounting Treatment".

THE MERGER AGREEMENT

GENERAL

Pursuant to the Merger Agreement, and on the terms and conditions thereof,
at the Effective Time, the Company will be merged with and into Merger Sub, with
Merger Sub as the surviving entity (Merger Sub is sometimes referred to below as
the "Surviving Corporation"), and Merger Sub will succeed to the business of the
Company and will take the Company's name. Each Share outstanding immediately
prior to the Effective Time will be converted into, and become exchangeable for,
at the election of the holder thereof (subject to the limitations and
adjustments described herein) either (i) $68 in cash or (ii) a number of ADSs
equal to the number derived by dividing $68 by the Average Closing Price,
provided that if the Average Closing Price is less than $40.2864, the number of
ADSs shall be 1.6879 and if the Average Closing Price is greater than $54.5052,
the number of ADSs shall be 1.2476, subject to, in the former case, the right of
the Company to terminate the Merger Agreement and, in the latter case, the right
of ING Groep N.V. to terminate the Merger Agreement, which rights of termination
shall be nullified if the other party agrees to Stock Consideration with a
value, based on the Average Closing Price, of $68.

Subject to certain adjustments, no less than 50% or more than 60% of the
Shares outstanding at the Effective Time may be converted into the right to
receive ADSs. Accordingly, each shareholder may receive more or less cash or
ADSs than such holder has elected, depending on the elections made by all
shareholders.

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The future price of ADSs prior to and following the Merger can be expected
to fluctuate. The trading price of the ADSs generally moves in tandem with the
Bearer Receipts which are listed on the AEX Stock Exchange. The ADSs are listed
on the NYSE. See "MARKET PRICE INFORMATION".

The maximum aggregate amount of the Cash Consideration is approximately
$1.1 billion, which will be funded through the acquisition of a minority equity
interest in Merger Sub by another ING insurance subsidiary in the United States
which in turn may be funded initially by an interim credit facility. The
Ordinary Shares underlying the Stock Consideration will be contributed by ING
Insurance to Merger Sub out of Ordinary Shares held by it in treasury. For a
more detailed discussion regarding the consideration to be paid, see the
sections entitled "THE MERGER AGREEMENT -- General; Merger Consideration" and
" -- Exchange of Share Certificates; Allocation of Merger Consideration".

EXCHANGE OF SHARE CERTIFICATES; ALLOCATION OF MERGER CONSIDERATION

In satisfaction of its obligation to cause First Chicago Trust Company of
New York (the "Exchange Agent") to mail or make available no later than 20 days
before the anticipated Closing Date, to each holder of record of Shares a form
of election (the "Election Form") permitting the holder to elect to receive the
Cash Consideration with respect to any or all of such holder's Shares ("Cash
Election Shares"), to elect to receive the Stock Consideration with respect to
any or all of such holder's Shares ("Stock Election Shares") or to indicate that
such holder makes no election ("Non-Election Shares"), the Election Form has
been distributed herewith. In accordance with the instructions contained in the
Election Form, holders of Shares may elect to receive the Cash Consideration,
the Stock Consideration or a combination thereof, or make no election. Any
Shares with respect to which the holder shall not have submitted to the Exchange
Agent an effective, properly executed Election Form, together with the
certificates representing the Shares subject thereto (or customary affidavits
and indemnification regarding the loss or destruction of such certificates or an
appropriate guarantee of delivery of such certificates), on or before 5:00 P.M.
on the business day that is four trading days following the Closing Date (the
"Election Deadline") (which date will be publicly announced by ING on the
Closing Date) shall be deemed to be Non-Election Shares.

In the event that the aggregate number of Cash Election Shares exceeds the
maximum number of Shares which may be converted into the right to receive cash
pursuant to the Merger Agreement (which maximum number is less than (i) 50% of
the number of Shares issued and outstanding immediately prior to the Effective
Time less any Shares which are held in treasury or directly by ING Groep N.V.
and which are to be canceled in the Merger less (ii) the number of Dissenting
Shares (as hereinafter defined) that are not to be treated as Non-Election
Shares and the aggregate number of Shares which are entitled to receive cash in
lieu of Fractional ADSs (the "Cash Election Number")), all Non-Election Shares
will be deemed Stock Election Shares and a pro rata share of Cash Election
Shares will be deemed converted into Stock Election Shares so that the number of
Cash Election Shares remaining after such conversion shall equal as closely as
practicable the Cash Election Number.

In the event that the aggregate number of Stock Election Shares exceeds the
maximum number of shares which may be converted into the right to receive ADSs
pursuant to the Merger Agreement (which maximum number is 60% of the Shares
issued and outstanding less any Shares held in treasury or directly by ING Groep
N.V. which are to be canceled in the Merger (the "Stock Election Number")), all
Non-Election Shares will be deemed Cash Election Shares and a pro rata share of
Stock Election Shares will be converted into Cash Election Shares so that the
number of Stock Election Shares remaining after such conversion shall equal as
closely as practicable the Stock Election Number.

In the event that the Stock Election Shares do not exceed the Stock
Election Number and the Cash Election Shares do not exceed the Cash Election
Number, Non-Election Shares will be deemed Cash Election Shares on a pro rata
basis so that the Cash Election Shares equal as closely as practicable the Cash
Election Number and all remaining Non-Election Shares shall be deemed to be
Stock Election Shares.

Therefore, in the event of an over-subscription for the Cash Consideration,
a shareholder who has properly elected the Cash Consideration may receive a
combination of the Cash Consideration and the Stock Consideration. Similarly, in
the event of an over-subscription for the Stock Consideration, a shareholder who
has properly elected the Stock Consideration may receive a combination of the
Stock

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Consideration and the Cash Consideration. The form of consideration to be
received by holders of Non-Election Shares will depend on the number of
shareholders who properly elected the Cash Consideration or the Stock
Consideration. For a discussion of certain tax consequences of receiving the
Cash Consideration, the Stock Consideration or a combination thereof for Shares,
see "THE MERGER -- Certain Federal Income Tax Consequences".

Any Election Form may be revoked or changed by the person submitting such
Election Form by written notice received by the Exchange Agent prior to the
Election Deadline. In the event an Election Form is revoked and a new, properly
executed Election Form is not submitted prior to the Election Deadline, the
Shares represented by such Election Form shall become Non-Election Shares. An
Election Form shall be deemed properly completed only if accompanied by one or
more certificates (or customary affidavits and indemnification regarding the
loss or destruction of such certificates or by an appropriate guarantee of
delivery of such certificates). If any consideration is to be issued to a person
other than the registered holder of the Shares represented by the certificate(s)
surrendered with respect thereto, it shall be a condition to such issuance that
such certificate(s) shall be properly endorsed or otherwise be in proper form
for transfer and that the person requesting such issuance shall pay to the
Exchange Agent any transfer or other taxes required as a result of such issuance
to a person other than the registered holder or establish to the satisfaction of
the Exchange Agent that such tax either has been paid or is not payable.

The Exchange Agent, in consultation with the Company and ING Groep N.V.,
will make all computations with respect to the allocation among the holders of
Shares of rights to receive the Stock Consideration and the Cash Consideration
in the Merger. For additional information regarding stock and cash elections,
and allocation of merger consideration, see "THE MERGER AGREEMENT -- Exchange of
Share Certificates; Allocation of Merger Consideration".

CLOSING; EFFECTIVE TIME

The closing of the Merger (the "Closing") will take place on the first
business day on which the last to be fulfilled or waived of the conditions to
the Merger set forth in the Merger Agreement as to be fulfilled prior to Closing
is satisfied or waived or on such other day as the Company and ING Groep N.V.
may agree (the "Closing Date"). As soon as practicable following the Closing,
Merger Sub will deliver to the Secretary of State of Iowa articles of merger
(the "Articles of Merger") and will file with the Secretary of State of Delaware
a certificate of merger (the "Delaware Certificate of Merger"). The Merger will
become effective on the date on which the later of the following actions shall
have been completed: (i) at the time when the Articles of Merger are effective
and (ii) the Delaware Certificate of Merger has been duly filed with the
Secretary of State of the State of Delaware. See "THE MERGER
AGREEMENT -- Conditions to Each Party's Obligations".

CONDITIONS TO THE MERGER

Consummation of the Merger is subject to satisfaction or waiver of various
conditions including, among other things: the approval of the Merger Agreement
by the requisite vote of the shareholders of the Company; the effectiveness of
the Registration Statement of which this Prospectus/Proxy Statement forms a
part; the expiration or early termination of the waiting period under the HSR
Act; the receipt of tax opinions to the effect that the Merger will be treated
for United States Federal income tax purposes as a reorganization pursuant to
Section 368(a) of the Internal Revenue Code (the "Code"); the receipt of
approvals from certain parties to contracts with respect to which certain of the
Company's subsidiaries act as investment advisors, registered under the
Investment Company Act of 1940 (the "Investment Company Act"); no court or any
governmental or regulatory authority, agency, commission, body or other
governmental entity ("Governmental Entity") having enacted, issued, promulgated,
enforced or entered any law or regulation (whether temporary, preliminary or
permanent) that is in effect and that restrains, enjoins, or otherwise prohibits
the consummation of the Merger (collectively, an "Order"), and no Governmental
Entity or any other person having instituted or threatened to institute any
proceeding seeking any such Order; and the granting of consents or approvals
from third parties, regulatory authorities and other Governmental Entities
required to consummate the Merger. In addition, it is a

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condition to the Merger that the Average Closing Price of the ADSs be at least
$40.2864 and not more than $54.5052 subject to, in the event that the Average
Closing Price is less than $40.2864, the right of ING Groep N.V. to pay Stock
Consideration worth $68 and, in the event that the Average Closing Price is
greater than $54.5052, the right of the Company to accept Stock Consideration
worth $68. For additional information concerning the conditions to the
consummation of the Merger, see "THE MERGER AGREEMENT -- Conditions to Each
Party's Obligations".

TERMINATION OF THE MERGER AGREEMENT

The Merger Agreement may be terminated at any time prior to the Effective
Time, whether before or after approval of the Merger Agreement by holders of
Shares: (i) by mutual consent of the Company and ING Groep N.V.; (ii) by the
Company or ING Groep N.V., if the Merger shall not have been consummated by
March 31, 1998 (provided that the terminating party is not otherwise in material
breach of its obligations under the Merger Agreement in any manner that shall
have proximately contributed to the occurrence of the failure of the Merger to
be consummated); (iii) by the Company or ING Groep N.V., if the Merger Agreement
shall not have been approved at the Special Meeting or any adjournment or
postponement thereof or if any Order shall become final and non-appealable; (iv)
by the Company or ING Groep N.V., if the Company enters into an agreement with
respect to a proposal determined to be more favorable to the Company by the
Company Board in good faith (subject, in the case of the Company, to there being
no breach by the Company of the provisions of the Merger Agreement relating to
competing proposals); (v) by the Company or ING Groep N.V. in the event of a
breach by the other party of any representation, warranty, covenant or agreement
which is not cured as provided in the Merger Agreement; (vi) by the Company, if
the Average Closing Price is less than $40.2864 (subject to the right of ING
Groep N.V. to pay Stock Consideration worth $68); and (vii) by ING Groep N.V.,
if the Company Board withdraws or modifies its approval or recommendation of the
Merger Agreement or fails to reconfirm its recommendation within five business
days after a written request by ING Groep N.V. to do so, or if the Average
Closing Price is above $54.5052 (subject to the Company's right to accept Stock
Consideration worth $68).

The Merger Agreement also provides that if the Merger Agreement is
terminated under the circumstances described in clause (iv) of the preceding
paragraph, or if the approval of shareholders is not obtained after the
occurrence of certain specified events including, among other things, the making
of, or the public announcement of an intention to make, an offer to purchase the
Company by a third person, or if the Company breaches any of its representations
and warranties in the Merger Agreement, then the Company shall pay ING Groep
N.V. a fee equal to $65 million. See "THE MERGER AGREEMENT -- Termination Fee".

WAIVER AND AMENDMENT OF THE MERGER AGREEMENT

Subject to the provisions of applicable law, any provision of the Merger
Agreement may at any time be waived, amended or supplemented by means of a
written agreement executed and delivered by duly authorized officers of the
respective parties.

THE STOCK CONSIDERATION

The following chart summarizes key features of the Ordinary Shares and
Bearer Receipts underlying the ADSs offered as Stock Consideration.

Dividends.................. Each year, a final dividend in respect of the prior
year is generally declared at and paid after the
annual general meeting of shareholders generally
held in May of each year. An interim dividend is
generally declared and paid in September, based
upon the results of the first six months of the
year. See "DIVIDENDS".

Netherlands Taxation....... The Netherlands imposes a withholding tax on a
distribution of a cash dividend at the rate of 25%.
Cash dividends paid by ING Groep N.V. to residents
of the United States who are the beneficial owners
of

6
21

such dividends may be eligible for a reduction of
such withholding tax to 15%. Subject to certain
limitations provided in the Code, a United States
shareholder may generally deduct from income, or
credit against its United States Federal income tax
liability, the amount of any Netherlands
withholding taxes. Stock dividends paid out of ING
Groep N.V.'s paid-in share premium recognized for
Netherlands tax purposes are not subject to such
withholding tax but are subject to United States
Federal income tax for United States residents. See
"DIVIDENDS" and "TAXATION -- Netherlands Taxation".

Voting Rights.............. The Bearer Receipts are issued in respect of, and
represent an interest in, the Ordinary Shares but
have no direct voting rights. The Stichting
Administratiekantoor ING Groep(the "Trust"), as the
holder of all Ordinary Shares underlying the Bearer
Receipts, has sole power to vote such Ordinary
Shares. See "THE TRUST AND THE BEARER
RECEIPTS -- Voting of the Ordinary Shares". Holders
of ADRs, therefore, will not have any voting rights
although ADR holders shall be able to instruct the
Depositary to participate in any meeting of holders
of Bearer Receipts.

Listing.................... The ADSs are listed on the NYSE. Bearer Receipts
are listed on the AEX Stock Exchange, the principal
trading market for the Bearer Receipts. Ordinary
Shares are not listed on any securities exchange,
and the market for Ordinary Shares is illiquid.

NYSE Symbol for ADSs....... ING

COMPARISON OF RIGHTS OF HOLDERS OF THE SHARES AND ADSS

Upon consummation of the Merger, shareholders of the Company will become
holders of ADSs representing Bearer Receipts evidencing Ordinary Shares of ING.
ING is a Dutch company and the rights of holders of ADSs under the laws of the
Netherlands vary materially from holders of common stock under Iowa law. See
"COMPARISON OF CERTAIN RIGHTS OF SHAREHOLDERS OF THE COMPANY AND HOLDERS OF
BEARER RECEIPTS OR ORDINARY SHARES OF ING GROEP N.V."

ING SUMMARY SELECTED CONSOLIDATED FINANCIAL DATA

The summary selected consolidated financial data set forth below are
derived from ING's Consolidated Financial Statements and the Notes thereto. Such
Consolidated Financial Statements have been audited by Moret Ernst & Young
Accountants, ING's independent accountants, except for the financial statements
of ING Bank N.V., a direct wholly-owned subsidiary, which statements (based on
ING accounting principles and after ING eliminations and adjustments) reflect
total assets constituting 63% in 1996, 61% in 1995, 61% in 1994, and 60% in
1993, and total income constituting 24% in 1996, 23% in 1995, 21% in 1994, and
20% in 1993 of the related consolidated totals, which were audited by KPMG
Accountants N.V. The financial data for the six-month periods ended June 30,
1997 and 1996 are derived from unaudited financial statements. The unaudited
financial statements include all adjustments, consisting of normal recurring
accruals, which the Company considers necessary for a fair presentation of its
financial position and results of operation for these periods. Operating results
for the six months ended June 30, 1997 are not necessarily indicative of the
results that may be expected for the entire year ending December 31, 1997.

ING's consolidated financial statements are prepared in accordance with
Dutch GAAP, which differs in certain significant respects from U.S. GAAP.
Reference is made to Note 7 of Notes to the ING Consolidated Financial
Statements for a description of the significant differences between Dutch GAAP
and U.S. GAAP and a reconciliation of shareholders' equity and net profit to
U.S. GAAP.

7
22

The information below should be read in conjunction with, and is qualified
by reference to, ING's Consolidated Financial Statements, related Notes, and
other financial information included elsewhere herein.

SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
--------------------------------------------------- ------------------------
1996 1996 1995 1994 1993 1992 1997 1997 1996
------ ------ ------ ------ ------ ------ ------ ------ ------
USD NLG NLG NLG NLG NLG USD NLG NLG

(IN MILLIONS, EXCEPT AMOUNTS PER SHARE AND RATIOS)

DUTCH GAAP CONSOLIDATED INCOME STATEMENT
DATA
Income from insurance operations:
Gross premiums written:
Life................................. 8,729 17,135 14,844 13,974 13,569 11,215 5,445 10,689 7,867
Non-life............................. 3,661 7,187 6,667 6,403 6,202 6,287 2,130 4,182 3,777
Reinsurance(1)....................... -- -- -- -- 561 2,538 -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
Total.................................. 12,390 24,322 21,511 20,377 20,332 20,040 7,576 14,871 11,644
Investment income...................... 5,641 11,073 9,605 8,202 8,923 8,347 3,446 6,765 5,241
Commission and other income............ 240 472 364 345 327 321 144 283 239
------ ------ ------ ------ ------ ------ ------ ------ ------
Total income from insurance
operations........................... 18,272 35,867 31,480 28,924 29,582 28,708 11,166 21,919 17,124
Income from banking operations:
Interest income........................ 10,318 20,255 18,371 17,788 17,767 18,488 5,721 11,230 9,448
Interest expense....................... 6,625 13,004 12,113 11,500 12,319 13,397 3,710 7,283 6,055
------ ------ ------ ------ ------ ------ ------ ------ ------
Net interest result.................... 3,694 7,251 6,258 6,288 5,448 5,091 2,011 3,947 3,393
Commission............................. 1,348 2,647 1,980 1,368 1,258 1,023 837 1,644 1,288
Other income........................... 926 1,818 1,519 511 1,071 784 626 1,229 828
------ ------ ------ ------ ------ ------ ------ ------ ------
Total income from banking operations... 5,968 11,716 9,757 8,167 7,777 6,898 3,474 6,820 5,509
Total income(2).......................... 24,224 47,551 41,203 37,048 37,359 35,606 14,632 28,722 22,624
====== ====== ====== ====== ====== ====== ====== ====== ======
Expenditure from insurance operations:
Life................................... 12,382 24,306 20,832 18,814 18,967 16,058
Non-life............................... 3,793 7,445 6,972 6,728 6,667 6,775
Reinsurance(1)......................... -- -- -- -- 702 2,974
Insurance operations -- general(3)..... 824 1,618 1,570 1,548 1,720 1,526
------ ------ ------ ------ ------ ------ ------ ------ ------
Total expenditure from insurance
operations............................. 16,999 33,369 29,374 27,090 28,056 27,333 10,457 20,527 15,962
Total expenditure from banking
operations(4).......................... 4,882 9,583 8,005 6,658 6,439 5,847 2,764 5,426 4,490
Total expenditure(2)..................... 21,864 42,920 37,345 33,705 34,495 33,180 13,212 25,936 20,443
====== ====== ====== ====== ====== ====== ====== ====== ======
Result before taxation from insurance
operations:
Life................................... 615 1,207 1,097 953 829 736 338 663 587
Non-life............................... 223 437 339 295 191 151 135 266 187
Reinsurance(1)......................... -- -- -- -- (32) (37) 236 463 388
Insurance operations -- general(3)..... 435 854 670 586 538 525
------ ------ ------ ------ ------ ------ ------ ------ ------
Total.................................... 1,273 2,498 2,106 1,834 1,526 1,375 709 1,392 1,162
Result before taxation from banking
operations............................. 1,087 2,133 1,752 1,509 1,338 1,051 710 1,394 1,019
------ ------ ------ ------ ------ ------ ------ ------ ------
Result before taxation and dividend on
own shares............................. 2,359 4,631 3,858 3,343 2,864 2,426 1,419 2,786 2,181
Dividend on own shares................... (37) (72) (58) (51) (43) (40) (25) (49) (32)
------ ------ ------ ------ ------ ------ ------ ------ ------
Result before taxation................... 2,322 4,559 3,800 3,292 2,821 2,386 1,394 2,737 2,149
Taxation................................. 613 1,203 1,138 994 778 561 391 768 629
Third-party interests.................... 18 35 13 (4) 14 (4) 14 27 6
------ ------ ------ ------ ------ ------ ------ ------ ------
Net profit............................... 1,692 3,321 2,649 2,302 2,029 1,829 989 1,942 1,514
Dividend on Preference Shares............ 23 46 46 46 28 -- 12 23 23
------ ------ ------ ------ ------ ------ ------ ------ ------
Net profit after deducting dividend on
Preference Shares...................... 1,668 3,275 2,603 2,256 2,001 1,829 978 1,919 1,491
Dividend on Ordinary Shares.............. 795 1,561 1,203 1,036 920 820
Addition to shareholders' equity......... 873 1,714 1,400 1,220 1,081 1,009
Net profit per Ordinary Share(5)......... 2.32 4.56 3.84 3.48 3.20 3.02 1.30 2.55 2.12
Net profit per Ordinary Share and
Ordinary Share equivalent.............. 2.21 4.34 3.67 3.40 3.09 n.a. 1.25 2.46 2.03
Dividend per Ordinary Share.............. 1.02 2.00 1.66 1.49 1.39 1.27
Dividend pay-out ratio................... 43.9% 43.9% 43.2% 43.0% 43.4% 41.9%
U.S. GAAP CONSOLIDATED INCOME STATEMENT
DATA
Net profit............................... 2,381 4,673 3,207 1,244 2,442
Net profit per Ordinary Share and
Ordinary Share equivalent.............. 3.13 6.14 4.46 1.58 3.10

8
23

DUTCH GAAP CONSOLIDATED
BALANCE SHEET DATA
Total assets.............................. 246.5 483.9 396.3 353.7 339.4 322.9 288.9 567.1 439.3
Investments:
Insurance............................... 77.4 152.0 129.1 112.5 109.6 103.3
Banking................................. 21.1 41.5 28.3 25.8 22.5 24.4
Eliminations(6)......................... (2.5) (5.0) (3.6)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total investments......................... 96.0 188.5 153.8 138.3 132.1 127.7 108.0 212.0 168.5
Bank lending.............................. 102.8 201.8 166.5 150.1 144.9 138.1 122.6 240.7 184.6
Insurance provisions:
Life.................................... 56.4 110.7 97.1 88.5 81.8 74.0
Non-life................................ 5.4 10.7 9.7 8.9 8.4 7.7
Reinsurance(1).......................... -- -- -- -- 5.7
------ ------ ------ ------ ------ ------ ------ ------ ------
Total insurance provisions.............. 61.8 121.4 106.8 97.4 90.2 87.4 67.7 132.8 114.2
====== ====== ====== ====== ====== ====== ====== ====== ======
Funds entrusted to and debt securities of
the banking operations:
Savings accounts of the banking
operations............................ 34.0 66.7 57.8 51.2 48.9 46.3
Other deposits and bank funds........... 56.1 110.2 96.5 91.7 88.8 85.9
Debt securities of the banking
operations............................ 14.3 28.0 22.1 17.1 17.1 15.6
------ ------ ------ ------ ------ ------ ------ ------ ------
Total................................... 104.4 204.9 176.4 160.0 154.8 147.8 123.5 242.4 193.0
Due to banks.............................. 36.9 72.4 52.0 41.2 40.4 42.6 42.0 82.4 57.9
Shareholders' equity(7)................... 17.4 34.1 23.8 21.8 21.5 15.6 23.1 45.4 28.9
Shareholders' equity per Ordinary
Share(5)................................ 23.00 45.15 33.32 31.84 32.88 25.10 29.39 57.69 39.05
Shareholders' equity per Ordinary Share
and Ordinary Share equivalent(5)........ 21.95 43.08 31.92 31.15 31.70 n.a. 28.36 55.68 37.42
U.S. GAAP CONSOLIDATED
BALANCE SHEET DATA
Total assets.............................. 258.6 507.7 413.1
Shareholders' equity...................... 21.2 41.7 28.6 26.5 52.1
Shareholders' equity per Ordinary Share
and Ordinary Share equivalent........... 26.94 52.88 38.34 32.58 63.95

- ---------------

(1) In view of the relatively minor importance of the ING's assumed REINSURANCE
activities, such activities have been included in the results of life and
non-life insurance as from the second quarter of 1993.

(2) For the years 1996, 1995 and 1994 and the six-month periods ended June 30,
1997 and 1996, after elimination of certain intercompany transactions
between the insurance operations and the banking operations. See Note 1.3 of
Notes to the Consolidated Financial Statements.

(3) Insurance operations -- general includes the results of insurance holding
companies and non-insurance companies included within ING Insurance, as well
as income from investments allocated to the capital and surplus of ING's
insurance companies. See Note 4.12 of Notes to the Consolidated Financial
Statements.

(4) Includes all non-interest expenditure, including value adjustments to
receivables of the banking operations. See "ING MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION -- Recent
Developments" and " -- Liquidity and Capital Resources".

(5) Net profit per share amounts have been calculated based on the weighted
average number of Ordinary Shares outstanding and shareholder's equity per
share amounts have been calculated based on the number of Ordinary Shares
outstanding at the end of the respective periods. For purposes of this
calculation, ING Groep N.V. shares held by ING companies have been deducted
from the applicable number of outstanding Ordinary Shares. All amounts are
presented after giving effect to all STOCK DIVIDENDS and retroactive
application of ING's 2.5 for 1 stock split, which was effective June 3,
1996.

9
24

(6) Consisting of investments in banking operations held by insurance companies,
investments in insurance operations held by ING banking companies, and ING
Groep N.V. shares held by ING insurance companies.

(7) Shareholders' equity as at December 31, 1995 is after a charge, net of tax,
of NLG 1,025 million resulting from the implementation of the change in
Dutch accounting policies relating to the valuation principles for the
provision for life policy liabilities concerning LONGEVITY RISK. This amount
has been charged to shareholders' equity as at January 1, 1995. Goodwill of
NLG 1,400 million arising in connection with the acquisition of the
principal assets and liabilities of Barings was charged in full to
shareholders' equity in 1995.

COMPANY SUMMARY SELECTED CONSOLIDATED FINANCIAL DATA

The summary financial data for the five-year period ended December 31, 1996
are derived in their entirety from the Company's consolidated financial
statements. The summary financial data are qualified in their entirety by, and
should be read in conjunction with, the financial statements and notes thereto
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996, which are incorporated by reference herein. See "INCORPORATION BY
REFERENCE".

SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
---------------------- ---------------------------------------------------------
JUNE 30, JUNE 30,
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- -------- -------- -------- --------
(IN MILLIONS)

INCOME STATEMENT DATA:
Revenue:
Premiums and Product Charges....... $ 67.6 $ 49.8 $ 111.0 $ 94.9 $ 90.0 $ 81.1 $ 73.4
Net Investment Income.............. 390.1 348.3 715.6 641.1 524.4 434.1 362.4
Realized Gains on Investments...... 8.5 11.3 16.2 9.5 19.7 42.0 8.2
Other.............................. 16.8 9.7 25.9 19.4 17.5 15.8 14.4
--------- --------- --------- -------- -------- -------- --------
Total Revenue................ 483.0 419.1 868.7 764.9 651.6 573.0 458.4
Benefit and Insurance Expenses..... 368.7 307.4 638.2 613.9 482.5 420.5 354.4
Interest Expense................... 7.8 7.7 14.1 13.8 7.9 9.5 9.8
Other Expense...................... 18.3 8.2 21.4 8.7 10.0 8.0 10.5
--------- --------- --------- -------- -------- -------- --------
Total Benefits and
Expenses................... 394.8 323.3 673.7 636.4 500.4 438.0 374.7
Income Before Federal Income
Taxes............................ 88.2 95.8 195.0 128.5 151.2 135.0 83.7
Net Income......................... $ 53.5 $ 62.0 $ 123.2 $ 84.9 $ 98.3 $ 87.2 $ 54.5
========= ========= ========= ======== ======== ======== ========
BALANCE SHEET DATA:
Cash and Investments:
Fixed Maturities -- Available for
Sale............................. $ 8,073.1 $ 7,017.9 $ 7,732.0 $7,352.2 $ 778.5 -- --
Fixed Maturities -- Held to
Maturity......................... -- -- -- -- 5,393.8 $5,078.2 $3,967.1
Equity Securities.................. 61.8 52.5 77.2 50.6 23.0 0.1 0.1
Mortgage Loans..................... 1,844.7 1,537.8 1,720.1 1,169.4 613.2 346.8 249.6
Real Estate........................ 13.7 14.3 8.6 14.0 15.7 20.8 14.6
Policy Loans....................... 196.0 181.5 190.5 182.4 176.4 176.9 176.7
Cash and Short-Term Investments.... 91.8 46.8 56.1 50.0 63.6 72.8 61.1
--------- --------- --------- -------- -------- -------- --------
Total Cash and Investments... 10,281.1 8,850.8 9,784.5 8,818.6 7,064.2 5,695.6 4,469.2
Total Assets....................... $13,640.0 $10,121.1 $12,569.7 $9,772.8 $7,965.6 $6,431.5 $5,066.9
========= ========= ========= ======== ======== ======== ========
Policyholder Liabilities........... 9,868.5 8,679.1 9,428.8 8,255.3 7,062.1 5,624.2 4,445.8
Commercial Paper................... 129.2 116.0 104.6 58.1 90.5 34.0 28.8
Long-Term Debt..................... 100.0 100.0 100.0 100.0 -- 50.2 60.7
Total Liabilities.................. $12,561.1 $ 9,367.7 $11,548.9 $8,878.9 $7,378.3 $5,903.5 $4,693.1
========= ========= ========= ======== ======== ======== ========
Company-obligated, mandatorily
redeemable 8.70% preferred
securities, due 2026, of its
subsidiary, Equitable of Iowa
Companies Capital Trust, holding
solely debt securities of the
Company.......................... $ 125.00 -- $ 125.0 -- -- -- --
Capital Securities................... $ 50.0 -- -- -- -- -- --
Total Stockholders' Equity........... $ 903.9 $ 753.4 $ 895.8 $ 893.9 $ 587.3 $ 528.0 $ 373.8
========= ========= ========= ======== ======== ======== ========

10
25

RISK FACTORS

In addition to the other information in this Prospectus/Proxy Statement,
holders of Shares should consider carefully the following factors in evaluating
the Merger Agreement and ING Groep N.V. and its business.

IMPACT OF MARKET CONDITIONS ON RESULT FROM OPERATIONS

A significant portion of ING's income is related to interest earning
assets, such as Dutch debt securities, real estate, loans and other assets. In
1996, approximately 55% of ING's total income and 69% of its consolidated
results before taxation were derived from its domestic operations. Accordingly,
changes in the Dutch economy and levels of Dutch consumer spending and downturns
in the Dutch real estate, securities and other markets may have a material
adverse effect on ING's operations.

ING has significant commercial banking, investment banking and insurance
operations in the emerging markets of South America, Asia and Central and
Eastern Europe and is an active trader of emerging market loans and debt
securities. Historically, ING's capital markets and securities trading
activities in emerging markets have been more volatile than those in developed
countries and are subject to certain risks, such as political and currency
volatility risks, which ING does not have in its more mature markets. During the
last three years, ING has experienced significant fluctuations in the results of
its emerging markets trading operations and no assurance can be given that such
fluctuations will not occur in future periods. In addition, ING's investment
banking, securities trading and brokerage activities and the results therefrom
tend to be more volatile than other parts of ING's businesses as they are
significantly affected by the levels of activity in the securities markets,
which in turn may be affected by, among other factors, the level and trend of
interest rates. ING also offers a number of insurance and financial products
which expose it to certain risks associated with fluctuations in interest rates,
securities prices or the value of real estate assets. For a fuller discussion of
these products and the risks associated therewith, see "ING RISK MANAGEMENT".

COMPETITION

There is substantial competition in the Netherlands and the other countries
in which ING does business for the types of insurance, commercial banking, and
investment banking and other products and services provided by ING. Such
competition is most pronounced in ING's more mature markets of the Netherlands,
the REST OF EUROPE, the United States, Canada and Australia. In recent years,
however, competition in emerging markets has increased as large insurance and
banking industry participants from more developed countries have sought to
establish themselves in markets which are perceived to offer higher growth
potential, and as local institutions have become more sophisticated and
competitive and have sought alliances, mergers or strategic relationships with
certain of ING's competitors.

In the Netherlands, which is the largest national market for ING's
insurance and banking operations, a national policy historically favoring open
markets and the presence of large domestic competitors in both the insurance and
banking sectors has resulted in intense competition for virtually all of ING's
products and services. In addition, the Dutch market is a mature market and one
in which ING already maintains significant market shares in most lines of
business. Although certain parts of the Dutch financial services sector are
growing, ING Bank in recent years has been facing increasing competition from
the other principal Dutch banks for its traditional client base of small and
medium-size enterprises as well as in other parts of ING's Dutch business. See
"ING MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION".

As part of the implementation of European Monetary Union ("EMU"), the
members of the European Union (the "EU") will adopt a single currency to be
called the "euro", which is currently intended to be introduced in 1999.
Although ING intends to seek to expand its presence in the EU through
acquisitions, alliances or organic growth in the coming years, no assurances can
be given that the adoption of the euro currency will not lead to increased
competition for ING in its European and its Dutch domestic wholesale banking
business.

11
26

IMPACT OF CHANGES IN FOREIGN EXCHANGE RATES AND INTEREST RATES

ING publishes its Consolidated Financial Statements in Dutch guilders. In
1996, 45% of ING's total income was derived from operations outside the
Netherlands. Consequently, fluctuations in the exchange rates used to translate
foreign currencies, particularly the U.S. dollar, the Australian dollar, the
Canadian dollar and the Japanese yen, into Dutch guilders will impact ING's
reported result from operations and cash flows from year to year, as well as the
value (denominated in Dutch guilders) of ING's investments in its non-Dutch
subsidiaries. ING's obligations are primarily denominated in Dutch guilders and
ING pays dividends on its Ordinary Shares in Dutch guilders. The Dutch guilder
value of such dividends in other currencies is also subject to exchange rate
fluctuations.

Fluctuations in interest rates affect the returns available to ING on fixed
interest investments, as well as the market values of, and corresponding levels
of capital gains or losses on, the fixed interest securities held by ING. See
"ING MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION -- Exchange Rate Fluctuations".

A key component of ING's banking operations is the management of interest
rate sensitivity. Interest rate sensitivity refers to the relationship between
changes in market interest rates and changes in net interest income. The
composition of a bank's assets and liabilities, and any gap position resulting
from such composition, cause the banking operations' net interest income to be
affected by changes in the general level of interest rates. In addition,
variations in interest rate sensitivity may exist within the repricing periods
or between the different currencies in which interest rate positions are held. A
mismatch of interest-earning assets and interest-bearing liabilities in any
given period may, in the event of changes in interest rates, have a material
effect on the financial condition or result from operations of ING's banking
businesses. See "ING RISK MANAGEMENT -- Interest Rate Risk in Banking
Activities" and "-- Interest Rate Risk from Non-trading Activities".

RESTRICTIONS ON SHAREHOLDER RIGHTS

While holders of Bearer Receipts are entitled to attend and speak at
general meetings of shareholders, they have no voting rights, and the Trust will
exercise the voting rights attached to the Ordinary Shares for which Bearer
Receipts have been issued. The Trust is required under the terms of the Trust's
Articles of Association (Statuten) and the related Conditions of Administration
(Administratievoorwaarden) (together the "Trust Agreement"), to make use of the
voting rights attached to the Ordinary Shares in such a manner that (i) the
interests of ING Groep N.V. and of the enterprises sustained by, or affiliated
with, ING Groep N.V. are served; (ii) the interests of ING Groep N.V. and those
enterprises and all parties concerned are safeguarded as well as possible; and
(iii) influences which could violate the independence, the continuity or the
identity of ING Groep N.V. and those enterprises contrary to the aforementioned
interests are barred to the greatest extent possible. The Trust may, but has no
obligation to, consult with the holders of Bearer Receipts or ADSs in exercising
its voting rights in respect of Ordinary Shares.

Under ING Groep N.V.'s Articles of Association (Statuten) (the "ING
Articles"), approval of ING Groep N.V.'s annual accounts by the General Meeting
of Shareholders acting as a corporate body (the "General Meeting") discharges
the members of the Executive Board and the Supervisory Board from liability in
respect of the exercise of their duties during the financial year concerned,
unless an explicit reservation is made by the General Meeting, subject to
certain provisions of Netherlands law, including provisions relating to
liability of members of supervisory boards and executive boards upon bankruptcy
of a company. See "DESCRIPTION OF ORDINARY SHARES".

12
27

COMPARATIVE PER SHARE DATA

The following table sets forth certain historical comparative information
and certain unaudited pro forma and equivalent pro forma information with
respect to income per share, book value per share and cash dividends per share
for the Ordinary Shares and the Shares. The information that follows should be
read in conjunction with the audited and unaudited historical financial
statements and notes thereto of ING and the Company included or incorporated by
reference, respectively, in this Prospectus/Proxy Statement. The combined pro
forma and equivalent pro forma per share data have been included and
incorporated for comparative purposes only and do not purport to be indicative
of the result from operations or financial position that actually would have
been obtained if the Merger had occurred at the beginning of the period or as of
the date indicated or of the result from operations or financial position that
may be obtained in the future.

FOR THE YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------
EQUIVALENT PRO
PRO FORMA FORMA
COMBINED(1)(2) COMPANY(1)(2)(3)
------------------ -------------------
HISTORICAL MIN. MAX. MIN. MAX.
---------- ------ ------ ------ ------

ING
Income per Ordinary Share(4)............. $ 3.13 $ 3.06 $ 3.02 -- --
Book value per Ordinary Share(4)......... 26.94 28.75 28.45 -- --
Cash dividends per Ordinary
Share(4)(5)............................ 1.02 1.02 1.02 -- --
THE COMPANY
Income per Share......................... $ 3.86 -- -- $ 3.81 $ 5.10
Book value per Share..................... 28.00 -- -- 35.87 48.02
Cash dividends per Share(5).............. 0.59 -- -- 1.28 1.72

FOR THE SIX MONTHS ENDED
JUNE 30, 1997
-------------------------------------------------------
EQUIVALENT PRO
PRO FORMA FORMA
COMBINED(1)(2) COMPANY(1)(2)(3)
------------------ -------------------
HISTORICAL MIN. MAX. MIN. MAX.
---------- ------ ------ ------ ------

ING
Income per Ordinary Share(4)............. $ 1.58 $ 1.54 $ 1.52 -- --
Book value per Ordinary Share(4)......... 32.58 34.23 33.88 -- --
Cash dividends per Ordinary
Share(4)(5)............................ 0.51 0.51 0.51 -- --
THE COMPANY
Income per Share......................... $ 1.67 -- -- $ 1.92 $ 2.57
Book value per Share..................... 28.20 -- -- 42.70 57.19
Cash dividends per Share(5).............. 0.32 -- -- 0.64 0.86

- ---------------

(1) All figures are in accordance with U.S. GAAP.

(2) For purposes of this table, the minimum figures are based on the number of
ADSs (assuming that 60% of the merger consideration is paid in the form of
ADSs) that would be issued if the Average Closing Price equalled $54.5052,
the price above which ING Groep N.V. would have the right to terminate the
Merger Agreement (subject to the right of the Company to accept Stock
Consideration worth $68) and the maximum figures are based on the number of
ADSs (assuming that 60% of the merger consideration is paid in the form of
ADSs) that would be issued if the Average Closing Price equaled $40.2864,
the price below which the Company would have the right to terminate the
Merger Agreement (subject to the right of ING Groep N.V. to pay Stock
Consideration worth $68).

(3) Equivalent pro forma information is presented on a fully diluted equivalent
per Share basis to reflect the effects of the exchange of Shares for ADSs.

(4) One ADS represents one Bearer Receipt which in turn represents one Ordinary
Share. Dividends paid on Ordinary Shares are passed on to holders of ADSs
subject to certain fees with respect to the

13
28

exchange of guilders into dollars. See "DESCRIPTION OF AMERICAN DEPOSITARY
SHARES -- Charges of Depositary".

(5) Figures for ING and pro forma reflect dividends not reduced by applicable
withholding in the United States or the Netherlands. See "TAXATION -- United
States Taxation".

MARKET PRICE INFORMATION

Bearer Receipts representing Ordinary Shares are traded on the AEX Stock
Exchange, the principal trading market for the Bearer Receipts. The Bearer
Receipts are also listed on the stock exchanges of Antwerp, Brussels, Frankfurt
and Paris as well as on the Swiss Exchange. As of December 31, 1996, ING was the
third largest company quoted on the AEX Stock Exchange, based on market
capitalization. As of June 30, 1997, there were approximately 821,935,474 Bearer
Receipts outstanding, of which 45,336,646 were held by ING. ING estimates that,
as of such date, approximately 49% of the Bearer Receipts were held by Dutch
investors, approximately 17% by investors in the United Kingdom and
approximately 15% by investors in the United States and Canada (including as
represented by ADSs).

As of June 30, 1997, there were 11,741,767 ADSs outstanding, representing
an equal number of Bearer Receipts. The ADSs are listed on the NYSE under the
symbol "ING" and are the principal form in which Bearer Receipts are traded in
the United States. Prior to June 13, 1997, there was no active trading market
for the ADSs.

The following are the high and low sales prices of the Bearer Receipts on
the AEX Stock Exchange as reported in the Official Price List of the AEX Stock
Exchange for the past three years and the high and low sales prices for the
Shares on the NYSE for the comparable period.

BEARER RECEIPTS ON
THE AEX STOCK SHARES OF THE
EXCHANGE COMPANY ON THE NYSE
(NLG)(1) (USD)
------------------ -------------------
CALENDAR PERIOD HIGH LOW HIGH LOW
- ------------------------------------------------ ------ ----- ------ ------

1995
First Quarter................................... 33.40 30.12 33.875 27.750
Second Quarter.................................. 35.00 30.60 37.375 32.625
Third Quarter................................... 37.80 34.60 38.250 31.375
Fourth Quarter.................................. 43.10 36.40 37.250 31.875
1996
First Quarter................................... 48.00 41.60 39.875 33.250
Second Quarter.................................. 56.20 47.60 39.000 33.000
Third Quarter................................... 55.20 46.40 41.500 34.500
Fourth Quarter.................................. 62.20 52.20 46.200 41.875
1997
First Quarter................................... 80.10 60.80 54.750 44.375
Second Quarter.................................. 91.70 69.30 58.250 46.375
Third Quarter (through September 16)............ 105.40 88.40 66.750 56.500

- ---------------

(1) As adjusted to reflect ING's 2.5 for 1 stock split effected on June 3, 1996.

The high and low sales prices on the NYSE for the ADSs for the period June
13, 1997 to June 30, 1997 were $47.1875 and $45.625, respectively, and for June
30, 1997 to September 16, 1997 were $52.500 and $44.0625, respectively.

14
29

MARKET VALUE OF SECURITIES

MARKET VALUE ON
----------------------------------
JULY 7, 1997 SEPTEMBER 16, 1997
------------ ------------------

Market price per Share (historical)............................ $57.3750 $66.7500
The Company Equivalent per Share(1)............................ 68.0000 68.0000
Market price per ADS (historical).............................. 48.2500 46.0625

- ---------------

(1) The Merger Agreement provides that the shareholders of the Company will
receive Stock Consideration worth $68.00 per Share to the extent such
shareholders receive Stock Consideration.

ING Bank is one of the principal market-makers for the Bearer Receipts on
the AEX Stock Exchange. Certain ING Groep N.V. subsidiaries will actively
participate in the secondary market for the Bearer Receipts and ADSs before,
during and after the Merger.

DIVIDENDS

On May 6, 1997, ING Groep N.V. declared a final dividend for 1996 of NLG
1.17 per Ordinary Share, which was paid on May 16, 1997 and which was added to
the interim dividend of NLG 0.83 paid in September 1996. ING Groep N.V. has
declared and paid dividends each year since its formation in 1991. Each year, a
final dividend in respect of the prior year is generally declared at and paid
after the annual general meeting of shareholders generally held in May of each
year. An interim dividend is generally declared and paid in September, based
upon the results for the first six months. The declaration of interim dividends
is subject to the discretion of the Executive Board of ING Groep N.V., whose
decision to that effect is subject to the approval of the Supervisory Board of
ING Groep N.V. See "DESCRIPTION OF ORDINARY SHARES". It is ING Groep N.V.'s
current policy to pay approximately 43% of its annual consolidated net profit as
dividends to its shareholders. The Executive Board decides, subject to the
approval of the Supervisory Board of ING Groep N.V., which part of the annual
profits (after payment of dividends on Preference Shares and Cumulative
Preference Shares) will be added to the reserves of ING Groep N.V. The part of
the annual profits that remains after this addition to the reserves and after
payment of dividends on Preference Shares and Cumulative Preference Shares is at
the disposal of the General Meeting of Shareholders, which may declare dividends
therefrom and/or add additional amounts to the reserves of ING Groep N.V. The
declaration and payment of dividends and the amount thereof is dependent upon
ING's result from operations, financial condition, cash requirements, future
prospects and other factors deemed relevant by the Executive Board in
determining the appropriate amount of reserves and there can be no assurance
that ING Groep N.V. will declare and pay any dividends in the future.

Assuming that the Stock Consideration is paid prior to the record date
fixed by the Depositary for the payment of final dividends, holders of ADSs
offered as Stock Consideration will be entitled to receive any final dividends
declared with respect to the year ended December 31, 1997 and any final and
interim dividends declared thereafter.

ING Groep N.V. has historically provided shareholders with the option of
receiving dividends either in cash or in the form of additional Ordinary Shares.
However, with respect to the final dividend for 1992, holders of Ordinary Shares
had the option of receiving dividends in the form of cash or Preference Shares.
Ordinary Shares or Preference Shares so issued are paid up from the share
premium reserve of ING Groep N.V. As a result, ING Groep N.V.'s share capital
will increase by the aggregate nominal value of the shares issued, and the SHARE
PREMIUM RESERVE will decrease correspondingly. If a shareholder opts to receive
the dividend in the form of additional Ordinary Shares or Preference Shares, the
amount of the dividend in cash, which consequently will not be payable to such
shareholders, is added to the other reserves of ING Groep N.V. If a shareholder
opts to receive the dividend in cash, Ordinary Shares or Preference Shares which
are consequently not issued to such shareholder are sold by ING Groep N.V. on
the open market in the form of Bearer Receipts. As a general rule, stock
dividends paid out of the paid-in share premium (recognized for Netherlands tax
purposes), when received by a natural person, are not subject to Dutch income
tax upon receipt of the stock dividend or upon the disposal of rights giving
entitlement to stock dividends but are subject to United States Federal income
tax for United States residents. See "TAXATION -- Netherlands Taxation".

15
30

Cash distributions on ING Groep N.V.'s Ordinary Shares and Bearer Receipts
are generally paid in guilders. However, the Executive Board may decide, with
the approval of the Supervisory Board, to declare dividends in the currency of a
country other than the Netherlands in which the Bearer Receipts are trading.
Amounts payable to holders of ADSs that are paid to the Depositary in a currency
other than dollars will be converted to dollars and subjected to a charge by the
Depositary for any expenses incurred by it in such conversion. See "DESCRIPTION
OF AMERICAN DEPOSITARY SHARES -- Dividends, Other Distributions and Rights" and
"-- Charges of Depositary". The right to cash dividends and distributions in
respect of the Ordinary Shares will lapse if such dividends or distributions are
not claimed within five years following the day after the date on which they
were made available.

There are no legislative or other legal provisions currently in force in
the Netherlands or arising under the ING Articles restricting the remittance of
dividends to holders of Ordinary Shares, Bearer Receipts or ADSs not resident in
the Netherlands. Insofar as the laws of the Netherlands are concerned, cash
dividends paid in Dutch guilders may be transferred from the Netherlands and
converted into any other currency, except that for statistical purposes such
payments and transactions must be reported by ING Groep N.V. to the Dutch
Central Bank (De Nederlandsche Bank N.V.) and, further, no payments, including
dividend payments, may be made to jurisdictions that are subject to certain
sanctions, adopted by the Government of the Netherlands, implementing
resolutions of the Security Council of the United Nations. Dividends are subject
to withholding taxes in the Netherlands as described under
"TAXATION -- Netherlands Taxation".

The following table sets forth the total dividends paid per Ordinary Share
for each date and year indicated.

DIVIDENDS(1)(2)
---------------
YEAR ENDED DECEMBER 31, (NLG) (USD)
---------------------------------------------------------- ----- -----

1992
September 14, 1992...................................... 0.62 0.37
May 25, 1993............................................ 0.66 0.36
1993
September 14, 1993...................................... 0.64 0.36
May 16, 1994............................................ 0.76 0.40
1994
September 6, 1994....................................... 0.70 0.40
May 15, 1995............................................ 0.80 0.50
1995
September 5, 1995....................................... 0.75 0.46
May 13, 1996............................................ 0.91 0.53
1996
September 3, 1996....................................... 0.83 0.50
May 16, 1997............................................ 1.17 0.61
1997
September 9, 1997....................................... 1.00 0.49

- ---------------
(1) As adjusted to reflect ING's 2.5 for 1 stock split effected on June 3, 1996.
Dividends paid per Ordinary Share and Bearer Receipt are the same.

(2) Solely for the convenience of United States investors, the historical
dividend amounts per Ordinary Share have been translated into dollars at the
Noon Buying Rates on the respective dividend payment dates or on the
following business day if such date was not a business day in the
Netherlands or the United States. The amounts in U.S. dollars are
representative of the dividends that would have been paid on ADSs. The Noon
Buying Rate may differ from the rate that may be used by the Depositary to
convert Dutch guilders into U.S. dollars for purposes of making payments to
holders of ADSs and expenses incurred by the Depositary in connection with
such exchange are payable by the holders of ADSs. See "DESCRIPTION OF
AMERICAN DEPOSITARY SHARES -- Dividends, Other Distributions and Rights" and
"-- Charges of the Depositary".

16
31

CURRENCY TRANSLATIONS AND EXCHANGE RATES

Fluctuations in the exchange rate between the Dutch guilder and the U.S.
dollar will affect the dollar amounts received by holders of ADSs of dividends
declared in Dutch guilders on the Bearer Receipts in respect of Ordinary Shares
represented by the ADSs.

ING publishes its financial statements in Dutch guilders. Because a
substantial portion of ING's revenues and expenses is denominated in dollars and
other currencies, ING has a financial reporting translation exposure
attributable to fluctuations in the value of these currencies against the
guilder. For information regarding the effects of currency fluctuations on ING's
results, see "RISK FACTORS -- Impact of Changes in Foreign Exchange Rates and
Interest Rates" and "ING MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION -- Factors Affecting Results of Operations".

The following table sets forth, for the periods and dates indicated,
certain information concerning the exchange rate for U.S. dollars into Dutch
guilders based on the Noon Buying Rate.

PERIOD AVERAGE
CALENDAR PERIOD END(1) RATE(2) HIGH LOW
- ---------------------------------------------------- ------ ------- ------ ------
(NLG PER U.S. $1)

1992................................................ 1.8190 1.7572 1.8893 1.5693
1993................................................ 1.9472 1.8652 1.9612 1.7617
1994................................................ 1.7360 1.8077 1.9750 1.6727
1995................................................ 1.6035 1.5971 1.7494 1.5192
1996................................................ 1.7271 1.6889 1.7560 1.6075
1997 (through September 16)......................... 1.9880 1.9300 2.1177 1.7300

- ---------------

(1) The Noon Buying Rate at such dates differed from the rates used in the
preparation of ING's Consolidated Financial Statements as of such date. See
Note 1.6.1.1 of Notes to the Consolidated Financial Statements.

(2) The average of the Noon Buying Rates on the last business day of each full
calendar month during the period, except for the month of September 1997,
where September 16, 1997 was used in place of the last day of the month. The
Noon Buying Rate on September 16, 1997 was NLG 1.9880 to $1.00.

17
32

THE SPECIAL MEETING
OF SHAREHOLDERS OF THE COMPANY

GENERAL

This Prospectus/Proxy Statement is being furnished to holders of Shares in
connection with the solicitation of proxies by the Company Board for use at the
Special Meeting and any adjournment or postponement thereof. Each copy of this
Prospectus/Proxy Statement is accompanied by a Letter to Shareholders, the
Notice of Special Meeting of Shareholders, a proxy card and a self-addressed
return envelope for the proxy card marked "Proxy" as well as an Election Form
and Letter of Transmittal to be used only for the election of Cash Consideration
or Stock Consideration and which should be separately returned in the envelope
marked "Election Form and Letter of Transmittal".

This Prospectus/Proxy Statement is also furnished by ING to each holder of
Shares as a prospectus in connection with the offer by ING to shareholders of
the Company of ADSs (representing interests in Bearer Receipts, each of which,
in turn, represents an interest in one Ordinary Share, nominal value NLG 1 per
Ordinary Share) in exchange for Shares upon the consummation of the Merger. This
Prospectus/ Proxy Statement, the Letter to Shareholders, the Election Form and
Letter of Transmittal, the Notice of Special Meeting and the form of proxy are
first being mailed to shareholders of the Company on or about September 22,
1997.

DATE, TIME AND PLACE

The Special Meeting will be held at the Company's principal executive
offices, 909 Locust Street, Des Moines, Iowa, on October 23, 1997, at 10:00
a.m., Des Moines local time.

MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING

At the Special Meeting, the shareholders will consider and vote on a
proposal to approve the Merger Agreement and will consider such procedural
matters as may properly come before the Special Meeting or any adjournment or
postponement thereof. As of the date of this Prospectus/Proxy Statement,
management of the Company is not aware of any procedural matters to be presented
to or considered by the shareholders at the Special Meeting.

RECORD DATE; VOTE REQUIRED

The Company Board has fixed September 15, 1997 as the Record Date for
determination of shareholders of the Company entitled to notice of, and to vote
at, the Special Meeting. Accordingly, only holders of record of the Shares at
the close of business on September 15, 1997 will be entitled to notice of, and
to vote at, the Special Meeting. On the Record Date, there were 32,058,396
Shares outstanding and entitled to vote, which were held by approximately 919
holders of record. Each Share is entitled to one vote on each matter properly
brought before the Special Meeting. The affirmative vote of the holders of a
majority of the outstanding Shares entitled to vote at the meeting is required
to approve the Merger Agreement.

As of the Record Date, directors and executive officers of the Company and
certain of their affiliates owned beneficially an aggregate of 3,155,151 Shares
(excluding Shares subject to exercisable options which have not been exercised
as of the Record Date); or approximately 9.8% of the Shares entitled to vote at
the Special Meeting. All of the Company's directors and executive officers have
indicated their intention to vote their Shares for the approval of the Merger
Agreement. Therefore, the affirmative vote of an additional 12,874,048 Shares
(40.2%) will be needed for the approval of the Merger Agreement.

VOTING AND REVOCATION OF PROXIES

Shares entitled to vote and which are represented at the Special Meeting by
a properly executed proxy received prior to the vote at the Special Meeting will
be voted at such Special Meeting in the

18
33

manner directed on the proxy card, unless such proxy is revoked in the manner
set forth herein in advance of such vote. ANY HOLDER OF SHARES RETURNING A BLANK
EXECUTED PROXY CARD WILL BE DEEMED TO HAVE VOTED FOR APPROVAL OF THE MERGER
AGREEMENT. Failure to return a properly executed proxy card or to vote in person
at the Special Meeting will have the practical effect of a vote against the
Merger Agreement.

A quorum will be present if a majority of the votes entitled to be cast are
represented in person or by proxy at the Special Meeting. Shares subject to
abstentions will be treated as Shares that are present at the Special Meeting
for purposes of determining the presence of a quorum. If a broker or other
nominee holder indicates on the proxy card that it does not have discretionary
authority to vote the Shares it holds of record on the proposal ("broker
non-votes"), those Shares will not be treated as Shares that are present at the
Special Meeting for purposes of determining the presence of a quorum and will
not be considered as voted for purposes of determining the approval of
shareholders on the proposal. Since the approval of the Merger Agreement
requires the affirmative vote of the holders of a majority of the outstanding
Shares entitled to vote, abstentions and broker non-votes will have the same
effect as a vote against the approval of the Merger Agreement.

Any holder of Shares giving a proxy may revoke it at any time prior to the
vote at the Special Meeting. Shareholders wishing to revoke a proxy prior to the
vote may do so by delivering to the Secretary of the Company a written notice of
revocation bearing a later date than the proxy or any later dated proxy relating
to the same Shares, or by attending the Special Meeting and voting in person.
Attendance at the Special Meeting will not in itself constitute the revocation
of a proxy.

The Company Board is not currently aware of any procedural matters to be
voted upon at the Special Meeting. If, however, procedural matters are properly
brought before such Special Meeting, or any adjournment or postponement thereof,
the persons appointed as proxies will have discretionary authority to vote the
Shares represented by duly executed proxies in accordance with their discretion
and judgment as to the best interest of the Company, except that no proxy that
directs the proxy holders to vote the Shares represented thereby against, or to
abstain from voting on, the Merger shall be voted in favor of any adjournment or
postponement of the Special Meeting.

SOLICITATION OF PROXIES

The Company will bear its own costs of soliciting proxies, except that ING
and the Company will share equally the printing and mailing expenses and
registration fees incurred in connection with preparing this Prospectus/Proxy
Statement. Proxies will generally be solicited by mail, but directors, officers
and selected other employees of the Company may also solicit proxies in person
or by telephone, telegram or other means of communication. Directors, officers
and any other employees of the Company who solicit proxies will not be specially
compensated for such services, but may be reimbursed for reasonable
out-of-pocket expenses in connection with such solicitation. Brokerage houses,
nominees, fiduciaries and other custodians will be requested to forward proxy
materials to beneficial owners and will be reimbursed for their reasonable
expenses incurred in connection therewith.

HOLDERS OF SHARES ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE MARKED "PROXY". SHARE
CERTIFICATES AND ELECTION FORMS AND LETTERS OF TRANSMITTAL SHOULD BE RETURNED
SEPARATELY IN THE ENVELOPE MARKED "ELECTION FORM AND LETTER OF TRANSMITTAL" IN
ACCORDANCE WITH THE INSTRUCTIONS CONTAINED IN THE ELECTION FORM AND LETTER OF
TRANSMITTAL.

19
34

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THE COMPANY
AND ING

The following sets forth, based on information available as of September
15, 1997, security ownership with respect to beneficial owners of more than five
percent of the Company's Shares.

NAME AND ADDRESS NUMBER OF SHARES PERCENT OF CLASS
- --------------------------------------------------------- ---------------- ----------------

Helen Hubbell Ingham(1).................................. 3,007,536 9.4%
1429 North Federal Hwy.
Ft. Lauderdale, FL 33304
FMR Corp.(2)............................................. 2,339,355 7.3%
82 Devonshire Street
Boston, MA 02109-3614
Hans F.E. Wachtmeister................................... 1,917,725 6.0%
Belmont Hill School
Belmont, MA 02178
Massachusetts Financial Services Company(3).............. 1,883,600 5.9%
500 Boylston Street
Boston, MA 02116

- ---------------

(1) All Shares held in a revocable trust. Excludes 15,905 Shares held by her
husband, Richard S. Ingham, in a revocable trust.

(2) Based on statements in Schedule 13G dated February 14, 1997. The filing
indicates that FMR Corp. has sole voting power with respect to 53,755
Shares, and sole dispositive power with respect to 2,339,355 Shares. FMR
Corp. is the parent of Fidelity Management Trust Company and Fidelity
Management & Research Company, an investment adviser to various registered
investment companies.

(3) Based on statements in Schedule 13G dated February 12, 1997. The filing
indicates Massachusetts Financial Services Company has sole voting power
with respect to 1,769,700 Shares, and sole dispositive power with respect
to all Shares.

The following sets forth, as of September 15, 1997, the beneficial security
ownership of the Company's Shares by director and named executive officer
individually and the directors and executive officers as a group:

NAME NUMBER OF SHARES(1) PERCENT OF CLASS(2)
- ---------------------------------------------------- ------------------- -------------------

Richard B. Covey.................................... 22,391 *
Gayle L. Greer...................................... 1,923 *
James L. Heskett.................................... 13,389 *
Fred S. Hubbell..................................... 748,765 2.3%
Richard S. Ingham, Jr............................... 24,716 *
Robert E. Lee....................................... 7,785 *
Jack D. Rehm........................................ 18,891 *
Thomas N. Urban..................................... 5,051 *
Hans F.E. Wachtmeister.............................. 1,917,725 6.0%
Richard S. White.................................... 3,770 *
Lawrence V. Durland, Jr............................. 90,332 *
Paul E. Larson...................................... 95,023 *
Thomas L. May....................................... 30,095 *
Paul R. Schlaack.................................... 247,658 *
All directors and executive officers as a group..... 3,389,351 10.5%

- ---------------
(1) Included are Shares held beneficially or of record by spouses and Shares
held by a fiduciary, but the individuals disclaim beneficial ownership of
such Shares as follows: Mr. Hubbell, 182,325; and

20
35

Mr. Wachtmeister, 1,831,832. Beneficial owners have sole voting and
investment power with respect to all Shares except for those held by
trustees. Includes Shares subject to exercisable options: Mr. Durland, Jr.,
11,600; Mr. Hubbell, 185,100; Mr. Larson, 30,300; Mr. May, 600; and all
directors and executive officers as a group, 234,200. Includes Shares held
in Company 401(k) Savings Plan by the following persons: Mr. Durland, Jr.,
13,317; Mr. Hubbell, 20,984; Mr. Larson, 8,633; Mr. May, 4,289; Mr.
Schlaack, 21,331; and all executive officers as a group, 95,831.

(2) An (*) indicates that the individual's ownership interests of the Company's
Shares is less than one percent.

As of June 30, 1997 none of ING Groep N.V., its Subsidiaries, executive
officers and directors held Shares of record.

DISSENTERS' RIGHTS OF SHAREHOLDERS OF THE COMPANY

Under the BCA, a holder of Shares may, in lieu of the consideration such
shareholder would otherwise receive in the Merger, seek payment of the "fair
value" of such Shares and receive payment of such fair value in cash if the
Merger is consummated by following certain procedures set forth in Division XIII
of the BCA, the text of which is attached as Annex C to this Prospectus/Proxy
Statement. Failure to follow such procedures may result in a loss of such
shareholder's dissenters' rights. Any shareholder of the Company returning a
blank executed proxy card will be deemed to have approved the Merger Agreement,
thereby waiving any such dissenters' rights. See "THE MERGER -- Dissenters'
Rights of Shareholders of the Company".

21
36

THE MERGER

BACKGROUND OF THE MERGER

The Company has a long-standing policy of remaining independent which
pre-dates the current Independence Policy adopted on November 11, 1991. The
Independence Policy provides for the Company's adherence to management policies
designed to enhance the long-term value of the Company and acknowledges the
importance of the Company's continued independence to the achievement of such
policies. From time to time, in recent years, Fred S. Hubbell, Chairman,
President and Chief Executive Officer of the Company, was informally contacted
by third parties regarding a possible relationship with the Company. The Company
Board was kept informed regarding these inquiries. Serious discussions never
ensued except with respect to ING.

In context of advantages perceived by the Company Board and management with
respect to larger companies related to economies of scale, availability and cost
of capital, diversification and risk management, the Company Board and
management of the Company gave ongoing consideration to the Company's strategic
alternatives and were actively pursuing a strategy of growth. The Company not
only planned for internal growth, but also considered possible acquisition
candidates and investigated growth opportunities with strategic partners. In
1996, the Company purchased Golden American Life Insurance Company ("Golden
American") to enhance the Company's offering of variable annuity products.
Exploration of external growth alternatives continued through June, 1997. Except
with respect to the purchase of Golden American, none of these alternatives
progressed beyond preliminary discussions.

At the request of R. Glenn Hilliard, Chairman and Chief Executive Officer
of Financial Services International (a management centre within ING) in North
America, a dinner at a life insurance industry meeting on January 9, 1997 was
arranged between Mr. Hubbell and Mr. Hilliard. Mr. Hubbell and Mr. Hilliard
discussed consolidation in the life insurance industry and integration of global
financial services generally, the strategic direction of the Company and the
strategic direction of ING, including ING's desire to acquire additional life
insurance operations in the United States. Mr. Hubbell informed the Company
Board at its February 13, 1997 meeting regarding the January meeting with Mr.
Hilliard. A follow-up meeting was initiated by ING and took place in Des Moines,
Iowa on March 20, 1997 at the Company's offices between Mr. Hubbell, Mr.
Hilliard, Jan Holsboer, a member of the Executive Board of ING Groep N.V. and
head of Financial Services International for ING, and Lawrence V. Durland, Jr.,
Senior Vice President of the Company. The discussion was similar to the first
meeting between Mr. Hubbell and Mr. Hilliard. No follow-up meetings or
discussions were scheduled. Mr. Hubbell informed the Company Board at its April
24, 1997 meeting regarding the March meeting and the interest of ING in further
follow-up meetings, but no action was taken by the Company Board with respect to
ING.

On May 8, 1997, Mr. Hubbell called Mr. Hilliard and another meeting was
arranged. On May 12, the parties executed a confidentiality letter agreeing that
the fact of the meetings and discussions between the parties was to be kept
confidential. On May 13, Mr. Hubbell and Paul E. Larson, Executive Vice
President and Chief Financial Officer of the Company, met in Chicago with Mr.
Hilliard and Mr. Holsboer, at which time Mr. Hilliard and Mr. Holsboer made a
presentation regarding ING's current operations and the possible benefits of
combining the Company with the ING United States operations. Mr. Hilliard
indicated that ING's preliminary valuations indicated a potential price for the
Shares in the low $60's per Share based on publicly available information and
expressed flexibility on the mix of cash and ADSs that could be paid for the
Shares. On May 16, Mr. Hubbell called Mr. Hilliard back and indicated a
willingness to engage in further discussions, but Mr. Hubbell rejected ING's
preliminary indication of value. On May 19, a small group of financial
executives from the Company and ING discussed the Company's financial statements
and other limited financial issues based on publicly available information.

On May 21, 1997, a Special Meeting of the Company Board was held by
telephone conference, at which time the Company Board was updated on recent
developments with respect to ING. A special committee of the Company Board (the
"Special Committee"), consisting of Messrs. Covey, Ingham,

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Rehm, Urban and Hubbell, was appointed to consult with management and to keep
informed regarding discussions with ING between meetings of the full Company
Board.

On May 22, 1997, Mr. Hubbell and Mr. Hilliard spoke by telephone with Mr.
Hilliard indicating that ING would consider paying $65 to $66 per Share based on
publicly available information, but that ING would need to see non-public
information before reconsidering the valuation. While indicating there was not
an agreement on price, Mr. Hubbell expressed a willingness to consider providing
non-public information. On May 23, a meeting of the Special Committee was held
by teleconference, at which time the committee was updated on Mr. Hilliard's
response the previous day and discussed further action to be taken. At this
meeting, the Special Committee authorized the engagement of J.P. Morgan to act
as financial advisor to the Company in connection with any proposed transaction
with ING. On May 30, the Company and ING executed a confidentiality agreement,
including therein a standstill agreement preventing ING from acquiring control
of the Company or purchasing any Shares for two years without the Company's
prior approval. The Company then began providing information to ING which had
been requested by ING regarding the Company.

On June 5, 1997, the Special Committee was again updated by management in a
teleconference call and discussed further action to be taken. During the
following week, a series of meetings was held between management of the Company
and management of ING (including members of the Executive Board of ING) to
discuss various aspects of the Company's operations and financial information
regarding the Company, as well as ING's operations. On June 17, a telephone
Board meeting was held to update the full Company Board on developments and to
discuss further action to be taken. On June 18, Mr. Hubbell and Mr. Hilliard met
in St. Louis to discuss the proposed transaction and Mr. Hubbell provided
additional information regarding the Company.

On June 20, 1997, Mr. Hilliard called Mr. Hubbell and advised him that ING
would consider paying a price of $68 per Share if certain other issues, such as
the mix of cash and ADSs, the exchange ratio for Shares and ADSs and the form of
the Merger Agreement, could be resolved to its satisfaction. No agreement was
reached. On June 21, the Company and ING exchanged drafts of proposed merger
agreements, each for review by the other party in contemplation of meetings the
following week in New York. On June 23, the Company Board held a teleconference
to update the Company Board and to discuss further action to be taken.

On June 24, 1997, representatives of the Company and ING met to identify
issues for discussion based on the initial review of the respective draft merger
agreements and the terms proposed by Mr. Hilliard on June 20. During the next
two days, managements of the Company and ING made presentations to each other
regarding their respective businesses.

From June 24 through July 7, 1997, negotiations and drafting continued with
respect to the terms of an agreement. On June 30, the Company Board held a
teleconference meeting to update the Company Board and to discuss further action
to be taken. During the week of June 30, representatives of ING reviewed records
of the Company in Des Moines and continued meeting with representatives of the
Company. On July 4, a teleconference was held between representatives of the
Company and ING management in the Netherlands regarding the business and
prospects of ING.

On July 7, 1997, the Company Board met in Des Moines to consider the
proposed Merger. A review of a preliminary actuarial appraisal of the Company's
life insurance subsidiaries as of September 30, 1996 dated July 6, 1997 was
presented by Tillinghast-Towers Perrin ("Tillinghast"). Representatives of J.P.
Morgan reviewed with the Company Board the financial terms of the Merger
Agreement and submitted the written opinion of J.P. Morgan that as of July 7,
1997 the consideration to be paid to the Company's shareholders in the Merger
was fair, from a financial point of view, to such shareholders. Legal counsel
for the Company reviewed with the Company Board in detail the terms of the
Merger Agreement. Mr. Hubbell reviewed the terms of the Employment Agreements
that had been finalized the prior day between certain members of management of
the Company and Merger Sub (see "-- Interests of Certain Parties -- Employment
Agreements"). The Company Board, in the absence of the affected members of
management, separately considered these employment arrangements.

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Following discussion, the Company Board determined that the Merger
Agreement was in the best interests of the Company and its shareholders and
approved the Merger Agreement. The Company Board further directed that the
Merger Agreement be submitted to the shareholders of the Company for approval
with the favorable recommendation of the Company Board. The actions by the
Company Board were unanimous by all directors of the Company other than Gayle L.
Greer who was present at earlier meetings and was provided written supporting
materials, but unavailable for the July 7 meeting. Ms. Greer subsequently
requested that her approval of these actions be noted in the minutes of the
August 7, 1997 meeting of the Company Board at which she was present, thereby
making such actions the unanimous actions of the Company Board. The Merger
Agreement was executed on July 7, 1997 following the meeting of the Company
Board. The execution of the Merger Agreement was announced on July 8, 1997.

REASONS FOR THE MERGER; RECOMMENDATION OF THE COMPANY'S BOARD OF DIRECTORS

In reaching its unanimous conclusion that the Merger Agreement is in the
best interests of the Company and its shareholders, the Company Board carefully
considered a number of factors. Among the factors considered were those
described above and the following:

(i) The financial terms of the Merger, including the price and the mix
of cash and ADSs available to shareholders, the tax free treatment for
Federal income tax purposes of the ADSs to be received in the transaction
and the opportunity of shareholders of the Company to become shareholders
of a diversified global financial services organization such as ING.

(ii) The value to be received by the shareholders of the Company in
the Merger in relation to the historical trading prices of the Shares.
(iii) Information concerning the business, financial condition,
results of operations and prospects of the Company and ING.
(iv) The financial advice and opinion rendered by J.P. Morgan as the
Company's financial advisor that, as of the date of such opinion, the
consideration to be paid to the holders of Shares in the proposed Merger
was fair, from a financial point of view, to such holders.

(v) Review by the Company Board of the results of the Preliminary
Actuarial Appraisal (as defined below).

(vi) Review by the Company Board with its legal and financial advisors
and senior executive officers of the Company of all of the terms and
conditions of the Merger Agreement.
(vii) The anticipated benefits to the employees, insurance agents,
suppliers, customers, policyholders and creditors of the Company and the
communities in which the Company operates as a result of the Merger due to
the financial condition, operating history and prospects of ING as a
diversified global financial services organization, and the expressed
intention of ING to maintain the corporate autonomy of the Company.
(viii) The absence of any apparent regulatory or other impediments to
the proposed transaction and an assessment of the likelihood that the
proposed transaction would be consummated.
(ix) The timing of the transaction, including the current insurance
industry consolidation, potential tax and regulatory changes, the process
of global financial services integration, the competitive environment for
the Company's products and general economic and financial market
conditions.
(x) Consideration of strategic alternatives for the Company in the
context of perceived advantages of larger companies related to economies of
scale, availability and cost of capital, diversification and risk
management. Alternatives considered by the Company included remaining
independent with internal growth or growth through acquisitions and
possible alternative partners.

The foregoing discussion of the information and factors considered by the
members of the Company Board is not intended to be exhaustive, but includes all
material factors considered by the Company

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Board. While each member of the Company Board individually considered the
foregoing and other factors, the Company Board did not collectively assign any
specific or relative weights to the factors considered and did not make any
determination with respect to any individual factor. The Company Board
collectively made its unanimous determination, in light of the factors that each
member individually considered appropriate, that the Merger Agreement is in the
best interests of the Company and its shareholders.

ACCORDINGLY, THE COMPANY BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS
OF THE COMPANY VOTE FOR THE APPROVAL OF THE MERGER AGREEMENT.

ING believes that by acquiring the Company, it takes an important step
forward in realizing its strategy to further strengthen its North American life
insurance operations. The acquisition fits in with ING's efforts to maintain
balanced growth in mature and emerging markets. The combined life insurance
operations, in ING's opinion, place ING in a strong position to play a leading
role in the fast growing and changing United States market for wealth
accumulation products.

Management of ING believes that ING's existing life insurance businesses in
the United States and the Company are an excellent fit. In their opinion, the
Company is strongly positioned in the middle income segment of the life
insurance market, whereas ING has a strong presence in the lower and the higher
income segments. Moreover, the Company will supplement ING's existing operations
in the United States in terms of product mix, geographic spread and distribution
channels. The Company gives ING access to new distribution channels such as
securities firms and banks.

OPINION OF FINANCIAL ADVISOR

Pursuant to an engagement letter executed June 25, 1997 and dated April 30,
1997, when preliminary analysis was begun, the Company retained J.P. Morgan as
its financial advisor and to deliver a fairness opinion in connection with the
proposed Merger.

At the meeting of the Company Board on July 7, 1997, J.P. Morgan rendered
its oral and written opinion to the Company Board that, as of such date, the
consideration to be paid to the shareholders of the Company in the proposed
Merger was fair, from a financial point of view, to the shareholders of the
Company. No limitations were imposed by the Company Board upon J.P. Morgan with
respect to the investigations made or procedures followed by it in rendering its
opinions.

THE FULL TEXT OF THE WRITTEN OPINION OF J.P. MORGAN DATED JULY 7, 1997,
WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED, AND LIMITS ON THE
REVIEW UNDERTAKEN, IS ATTACHED AS ANNEX B TO THIS PROSPECTUS/PROXY STATEMENT AND
IS INCORPORATED HEREIN BY REFERENCE. THE SHAREHOLDERS OF THE COMPANY ARE URGED
TO READ THE OPINION IN ITS ENTIRETY. J.P. MORGAN'S WRITTEN OPINION IS ADDRESSED
TO THE COMPANY BOARD, IS DIRECTED ONLY TO THE CONSIDERATION TO BE PAID IN THE
MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY STOCKHOLDER OF THE
COMPANY AS TO HOW SUCH STOCKHOLDER SHOULD VOTE AT THE SPECIAL MEETING. THE
SUMMARY OF THE OPINION OF J.P. MORGAN SET FORTH IN THIS PROSPECTUS/PROXY
STATEMENT DESCRIBES THE MATERIAL ASPECTS OF SUCH OPINION AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION.

In arriving at its opinion, J.P. Morgan reviewed, among other things: the
July 7, 1997 draft of the Merger Agreement; certain publicly available
information concerning the business of the Company and of certain other
companies engaged in businesses comparable to those of the Company, and the
reported market prices for certain other companies' securities deemed
comparable; publicly available terms of certain transactions involving companies
comparable to the Company and the consideration received for such companies;
current and historical market prices of the Shares, ADSs and Bearer Receipts;
the audited financial statements of the Company and ING for the fiscal year
ended December 31, 1996, and the unaudited financial statements of the Company
and ING for the period ended March 31, 1997; certain internal financial analyses
and forecasts prepared by the Company and its management; the terms of other
business combinations that J.P. Morgan deemed relevant; and the preliminary
actuarial appraisal dated July 6, 1997 prepared by Tillinghast ("Preliminary
Actuarial Appraisal"). J.P. Morgan also held

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discussions with certain members of the management of the Company and ING with
respect to certain aspects of the Merger, and the past and current business
operations of the Company and ING, the financial condition and future prospects
and operations of the Company and ING, the effects of the Merger on the
financial condition and future prospects of the Company and ING, and certain
other matters believed necessary or appropriate to J.P. Morgan's inquiry. In
addition, J.P. Morgan visited certain representative facilities of the Company,
and reviewed such other financial studies and analyses and considered such other
information as it deemed appropriate for the purposes of its opinion.

J.P. Morgan relied upon and assumed, without independent verification, the
accuracy and completeness of all information that was publicly available or was
furnished to J.P. Morgan by the Company or otherwise reviewed by J.P. Morgan,
and J.P. Morgan has not assumed any responsibility or liability therefor. J.P.
Morgan did not conduct any valuation or appraisal of any assets or liabilities,
nor were any such valuations or appraisals provided to J.P. Morgan prior to the
delivery of its opinion, other than the Preliminary Actuarial Appraisal. In
relying on financial analyses and forecasts provided to J.P. Morgan, J.P. Morgan
assumed that these analyses and forecasts have been reasonably prepared based on
assumptions reflecting the best currently available estimates and judgments by
management as to the expected future results of operations and financial
condition of the Company. J.P. Morgan has also assumed that the Merger will have
the tax consequences described in this Prospectus/Proxy Statement and in
discussions with, and materials furnished by, representatives of the Company,
and that the other transactions contemplated by the Merger Agreement will be
consummated as described in the Merger Agreement and this Prospectus/Proxy
Statement.

The projections furnished to J.P. Morgan for the Company were prepared by
the management of the Company. The Company does not publicly disclose internal
management projections of the type provided to J.P. Morgan in connection with
J.P. Morgan's analysis of the Merger, and such projections were not prepared
with a view toward public disclosure. These projections were based on numerous
variables and assumptions that are inherently uncertain and may be beyond the
control of management, including, without limitation, factors related to general
economic and competitive conditions and prevailing interest rates. Accordingly,
actual results could vary significantly from those set forth in such
projections.

J.P. Morgan's opinion is based on economic, market and other conditions as
in effect on, and the information made available to J.P. Morgan as of, the date
of such opinion. Subsequent developments may affect the written opinion dated
July 7, 1997, and J.P. Morgan does not have any obligation to update, revise or
reaffirm such opinion. J.P. Morgan expressed no opinion as to the price at which
the Shares, the ADSs, Bearer Receipts or other securities will trade at any
future time.

In accordance with customary investment banking practice, J.P. Morgan
employed generally accepted valuation methods in reaching its opinion. The
following is a summary of the material financial analyses utilized by J.P.
Morgan in connection with providing its opinion.

ACTUARIAL APPRAISAL AND OTHER ADJUSTMENTS

J.P. Morgan reviewed the results of the Preliminary Actuarial Appraisal.
J.P. Morgan made several adjustments to such values at the corresponding
discount rates of 8%, 10% and 12% to reflect the present value of the Company's
life insurance operations as of June 30, 1997. In addition, J.P. Morgan further
adjusted the values to include the Company's non-insurance operations. J.P.
Morgan valued Equitable Investment Services, Inc. ("EISI") based on multiples of
16.0x, 18.0x and 20.0x management's 1997 estimated net income for EISI of $3.8
million. J.P. Morgan valued Locust Street Securities ("LSSI") based on multiples
of 13.1x and 15.0x management's estimated 1997 net income for LSSI of $1.0
million and a multiple of 15.0x LSSI's 1,500 registered representatives. To
these adjusted values J.P. Morgan added the Company's net holding company assets
of $7.3 million and deducted the Company's $341.5 million of debt and preferred
equity as of March 31, 1997. J.P. Morgan used management estimates of the number
of fully diluted Shares of the Company. The final adjusted equity values per
fully diluted Share outstanding ranged from $42.58 to $64.90. J.P. Morgan
subsequently reviewed a final actuarial appraisal dated August 7, 1997 prepared
by Tillinghast (the "Final Actuarial Appraisal") and has informed the Company
that J.P. Morgan has determined that there were no changes

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between the Preliminary Actuarial Appraisal and the Final Actuarial Appraisal
that would materially affect the J.P. Morgan analysis. See "-- Actuarial
Appraisal".

DISCOUNTED CASH FLOW ANALYSIS

J.P. Morgan conducted a discounted cash flow analysis for the purpose of
determining the fully diluted equity value per Share. J.P. Morgan calculated the
net present value of dividends on the Shares that the Company is expected to
generate during fiscal years 1997 through 2001 based upon financial projections
prepared by the management of the Company. J.P. Morgan also calculated a range
of terminal values of the Company at the end of the five-year period ending 2001
by applying multiples of 13.0x to 17.0x net income during the final year of the
five-year period and by applying multiples of 2.2x to 2.6x book value, excluding
the effects of Financial Accounting Statement 115, at the end of the 5-year
period ending 2001. The stockholder dividends and the range of terminal values
were then discounted to present values using a range of discount rates from 8%
to 12%, which were chosen by J.P. Morgan based upon an analysis of the estimated
weighted average cost of capital of the Company. Based on management
projections, terminal net income multiples of 13.0x to 17.0x, and discount rates
of 8% to 12%, the discounted cash flow analysis indicated a range of equity
values of between $48.37 and $62.34 per fully diluted Share on a stand-alone
basis (i.e., without synergies). Based on management projections, terminal book
value (excluding FAS 115) multiples of 2.2x to 2.6x, and discount rates of 8% to
12%, the discounted cash flow analysis indicated a range of equity values of
between $56.15 and $65.81 per fully diluted Share on a stand-alone basis (i.e.,
without synergies).

PUBLIC TRADING MULTIPLES

Using publicly available information, J.P. Morgan compared selected
financial data of the Company with similar data for selected publicly traded
life insurance and annuity companies. The companies selected by J.P. Morgan were
American Annuity Group, American General Corporation, Conseco Inc., Equitable
Companies Incorporated, Hartford Life Insurance Company, Jefferson-Pilot Corp.,
Lincoln National Corporation, Nationwide Financial Services, Inc., ReliaStar
Financial Corp., SunAmerica Inc., Transamerica Corp. and Western National
Corporation. For each comparable company, publicly available financial data as
of March 31, 1997 and I/B/E/S earnings estimates for the years ending December
31, 1997 and 1998 were considered. J.P. Morgan selected the median value for
several multiples: price to U.S. GAAP book value, both including and excluding
the effects of FAS 115, and price to 1997 and 1998 I/B/E/S earnings estimates.
The median multiples derived from this analysis were as follows: (i) U.S. GAAP
book value including FAS 115: 1.96x; (ii) U.S. GAAP book value excluding FAS
115: 2.00x; (iii) 1997 estimated earnings: 14.3x; and (iv) 1998 estimated
earnings: 12.9x. Based on management earnings estimates multiples, equity values
per fully diluted Share outstanding ranged from $49.24 to $55.80. In addition,
J.P. Morgan applied the median values for 1997 and 1998 earnings estimates to
I/B/E/S estimates of the Company's 1997 and 1998 earnings, yielding an equity
value range of $57.55 to $58.60 per fully diluted Share outstanding.

SELECTED TRANSACTION ANALYSIS

Using publicly available information, J.P. Morgan examined the multiples
paid in selected life insurance and annuity company transactions from 1994 to
1997 with respect to equity value to U.S. GAAP book value, excluding the effects
of FAS 115; equity value to U.S. GAAP latest twelve months ("LTM") earnings;
equity value to latest fiscal year statutory capital and surplus; equity value
to latest fiscal year statutory net income; and premium to market value 45
trading days prior to transaction announcement. Specifically, J.P. Morgan
reviewed the following transactions (Acquired Company/Acquiring Company):
Security-Connecticut Corporation/ReliaStar Financial Corp.; USLIFE
Corporation/American General Corporation; Chubb Life Insurance Company of
America/Jefferson-Pilot Corporation; Providian Corporation/AEGON NV; Home
Beneficial Corporation/American General Corporation; Guarantee Reserve Life
Insurance Company/Irish Life Assurance plc; Pioneer Financial Services,
Inc./Conseco Inc.; Washington National Corporation/PennCorp. Financial Group;
the annuity business of John Alden Financial Corporation/SunAmerica Inc.;
Transport Holdings Inc./Conseco Inc.;

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American Travelers Corp./Conseco Inc.; Capitol American Financial Corp./Conseco
Inc.; 9.5% of Bankers Life/Conseco Inc.; First Colony Corp./GE Capital
Corporation; United Companies Financial Corporation/PennCorp Financial Group;
Golden American Life Insurance Company/Equitable of Iowa Companies; Paul Revere
Corporation/Provident Companies Inc.; Life Partners Group Inc./Conseco Inc.;
Life Insurance of Virginia/GE Capital Corporation; Ford Life Insurance
Company/SunAmerica Inc.; Union Fidelity Life Insurance Company/GE Capital
Corporation; Independent Insurance Group, Inc./American General Corporation;
CalFarm Life Insurance Co./SunAmerica Inc.; Financial Benefit Group/AmVestors
Financial Corporation; Alexander Hamilton Life Insurance Co. of
America/Jefferson-Pilot Corporation; Laurentian Capital Corporation/American
Annuity Group; Kemper Corporation/Zurich Insurance Company; 52% of CCP
Insurance, Inc./Conseco Inc.; Lamar Financial Group Inc./Life Partners Group
Inc.; 40% of Western National Corporation/American General Corporation;
Franklin Life Insurance Co./American General Corporation; American Income
Holding, Inc./Torchmark Corporation; USLICO Corp./The NWNL Companies; Harcourt
General Insurance Company/GE Capital Corporation; and The Statesman Group,
Inc./Conseco Capital Partners II, L.P.

The median multiples derived from such analysis of all transactions were as
follows: (i) equity value to U.S. GAAP book value, excluding the effects of FAS
115: 1.28x; (ii) equity value to U.S. GAAP LTM earnings: 15.1x; (iii) equity
value to latest fiscal year statutory capital and surplus: 2.19x; (iv) equity
value to latest fiscal year statutory net income: 14.7x; and (v) multiple to
market value 45 trading days prior to transaction announcement: 1.37x. This
analysis yielded an equity valuation range of $32.47 to $66.97 per fully diluted
Share. J.P. Morgan also calculated the median multiples for transactions from
1996 to 1997. The median multiples derived from these transactions were as
follows: (i) equity value to U.S. GAAP book value excluding the effects of FAS
115: 1.50x; (ii) equity value to U.S. GAAP LTM earnings: 15.1x; (iii) equity
value to latest fiscal year statutory capital and surplus: 2.57x; (iv) equity
value to latest fiscal year statutory net income: 21.7x; and (v) multiple to
market value 45 trading days prior to transaction announcement: 1.46x. Analysis
of transactions announced in 1996 and 1997 yielded an equity valuation range of
$38.05 to $71.36 per fully diluted Share.

The summary set forth above does not purport to be a complete description
of the analyses or data presented by J.P. Morgan. The preparation of a fairness
opinion is a complex process and is not necessarily susceptible to partial
analysis or summary description. J.P. Morgan believes that the summary set forth
above and its analyses must be considered as a whole and that selecting portions
thereof, without considering all of its analyses, could create an incomplete
view of the processes underlying its analyses and opinion. J.P. Morgan based its
analyses on assumptions that it deemed reasonable, including assumptions
concerning general business and economic conditions and industry-specific
factors. The other principal assumptions upon which J.P. Morgan based its
analyses are set forth above under the description of each such analysis. J.P.
Morgan's analyses are not necessarily indicative of actual values or actual
future results that might be achieved, which values may be higher or lower than
those indicated. No company or transaction used in the above analysis as a
comparison is identical to the Company or the Merger. Moreover, J.P. Morgan's
analyses are not and do not purport to be appraisals or otherwise reflective of
the prices at which businesses actually could be bought or sold.

As a part of its investment banking business, J.P. Morgan and its
affiliates are continually engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, investments for passive
and control purposes, negotiated underwritings, secondary distributions of
listed and unlisted securities, private placements, and valuations for estate,
corporate and other purposes. J.P. Morgan was selected to advise the Company
with respect to the Merger and to deliver an opinion to the Company's Board of
Directors with respect to the Merger on the basis of such experience and its
familiarity with the Company.

For services rendered in connection with the Merger, the Company has paid
J.P. Morgan an engagement fee, a fee upon announcement of the Merger and a fee
upon delivery of its opinion and a fee upon the mailing of this Prospectus/Proxy
Statement to stockholders of the Company. In addition, the Company has agreed to
pay J.P. Morgan a transaction fee of approximately $10,035,000, less the amount
of the foregoing fees paid by the Company, upon consummation of the Merger. The
Company has agreed to reimburse J.P. Morgan for its expenses incurred in
connection with its services, including

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the fees and disbursements of counsel, and will indemnify J.P. Morgan against
certain liabilities, including liabilities arising under the federal securities
laws.

J.P. Morgan and its affiliates maintain banking and other business
relationships with the Company and its affiliates. In the past two years J.P.
Morgan and its affiliates have earned aggregate fees of approximately $350,000
from the Company for advisory services, debt underwriting, credit and sales and
trading. In the ordinary course of their businesses, affiliates of J.P. Morgan
may actively trade the debt and equity securities of the Company or ING for
their own accounts or for the accounts of customers and, accordingly, they may
at any time hold long or short positions in such securities.

ACTUARIAL APPRAISAL

In connection with its evaluation of the proposed Merger, the Company
engaged Tillinghast, a nationally recognized firm of actuaries and consultants,
to provide the Company with an actuarial appraisal of the economic value of the
Company's life insurance operations as of September 30, 1996. Tillinghast's
engagement was limited to providing an actuarial valuation of the Company's
insurance businesses.

In developing the actuarial appraisal, Tillinghast prepared estimates or
projections regarding the future experience of the Company. It is anticipated
that the actual experience will vary, and may vary significantly, from
Tillinghast's estimates. In addition, as part of its assignment, Tillinghast,
with the Company's consent, relied on data and other information supplied by the
Company, without any independent verification of the accuracy or completeness of
such data and other information.

An actuarial appraisal of economic value, or actuarial value, does not
represent market value, nor is it an attempt to estimate market value. Rather,
an actuarial value is a projection of statutory earnings (under a series of
assumptions) discounted to present value. The actuarial values vary
significantly, depending upon the assumptions used and the discount rate
applied. Tillinghast calculated present values using an assumed range of
discount rates of 8% to 12% in its preliminary analysis, as summarized in the
Preliminary Actuarial Appraisal, and an assumed range of discount rates of 9% to
13% in the Final Actuarial Appraisal. The discount rates are intended to reflect
risk and the general interest rate environment. Applying these discount rates,
Tillinghast obtained actuarially calculated present values for the Company's
in-force insurance business. To such values, Tillinghast added the values
attributable to the Company's assumed future new insurance business, based on
assumptions provided by the Company's management. Subtracting from the combined
value of in-force and new business the cost of capital required by such business
(assuming a 200% NAIC Risk-based Capital Ratio, the minimum level consistent
with the Company's claims paying ratings), Tillinghast obtained preliminary
actuarial values for the insurance operations ranging, in aggregate, from
approximately $1.5 billion to approximately $2.2 billion, at discount rates of
8% to 12% and final actuarial values for the insurance operations ranging, in
aggregate, from approximately $1.3 billion to $1.9 billion at discount rates of
9% to 13%. These actuarial values do not include adjustments for parent company
debt or value for non-insurance operations. After making several adjustments to
the values set forth in the Preliminary Actuarial Appraisal, J.P. Morgan
utilized these values as one of several components in obtaining implied equity
values for the Company's operations as part of the analysis conducted by J.P.
Morgan in connection with its opinion. See "-- Opinion of Financial
Advisor -- Actuarial Appraisal".

As set forth above and as further described in the Final Actuarial
Appraisal, Tillinghast's work is subject to various assumptions, caveats,
limitations and explanations. In particular, the Preliminary Actuarial Appraisal
represented a "work-in-progress" and was prepared with constraints on time and
information availability which were resolved in the Final Actuarial Appraisal.
Other than these constraints, the Company placed no limitations on Tillinghast.
As such, in order to understand or place any reliance on Tillinghast's work, the
Final Actuarial Appraisal must be read in its entirety. Further, Tillinghast
advises readers of the Preliminary and Final Actuarial Appraisals that if they
are unfamiliar with actuarial estimates and projection techniques, they should
be aided by a professional who is. In the past, Tillinghast has provided
actuarial and other advisory services to the Company and has received fees for
the rendering of

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such services. Except for the Preliminary and Final Actuarial Appraisals,
however, Tillinghast did not provide any significant services to the Company in
1997, 1996 or 1995. The Company expects that it will pay to Tillinghast
approximately $500,000 in fees.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following discussion summarizes the material Federal income tax
consequences of the Merger. The discussion does not address all aspects of
Federal taxation that may be relevant to particular holders of Shares, and it
may not be applicable to shareholders that are securities dealers, tax-exempt
entities, insurance companies or persons who are not citizens or residents of
the United States, or who acquired their Shares pursuant to the exercise of
employee stock options or otherwise as compensation or that hold their Shares as
part of a "straddle" or a "conversion transaction". The discussion does not
address the effect of any applicable state, local or foreign tax laws except as
described herein or any Federal tax laws other than those pertaining to the
income tax. EACH HOLDER OF SHARES SHOULD CONSULT ITS OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO IT OF THE MERGER. See "TAXATION".

This discussion is based on the Code, regulations and rulings now in effect
or proposed thereunder, current administrative rulings and practice, and
judicial precedent, all of which are subject to change. Any such changes, which
may or may not be retroactive, could alter the tax consequences to shareholders
of the Company discussed herein. This discussion is also based on certain
assumptions regarding the factual circumstances that will exist at the Effective
Time, including certain representations to be made by the Company and ING. This
discussion assumes that shareholders of the Company hold their Shares as a
capital asset within the meaning of Section 1221 of the Code.

TAX OPINIONS

As a condition to the Closing, ING will receive an opinion from Sullivan &
Cromwell that, assuming the Merger occurs in accordance with the Merger
Agreement and conditioned on the accuracy of certain representations made by ING
Groep N.V. and the Company, the Merger will be treated as a reorganization
within the meaning of Section 368(a) of the Code and each of ING Groep N.V.,
Merger Sub and the Company will be a party to the reorganization within the
meaning of Section 368(b) of the Code, and the Company will receive an opinion
from Nyemaster, Goode, Voigts, West, Hansell & O'Brien, P.C., that, assuming the
Merger occurs in accordance with the Merger Agreement, and conditioned on the
accuracy of certain representations made by ING and the Company, (i) the Merger
will be treated as a reorganization within the meaning of Section 368(a) of the
Code and each of ING Groep N.V., Merger Sub and the Company will be a party to
the reorganization within the meaning of Section 368(b) of the Code and (ii)
shareholders of the Company will recognize no gain or loss as a result of the
exchange of their Shares solely for ADSs pursuant to the Merger, except with
respect to cash received in lieu of fractional ADSs.

An opinion of counsel, unlike a private letter ruling from the Internal
Revenue Service (the "Service"), has no binding effect on the Service. The
Service could take a position contrary to counsel's opinion and, if the matter
is litigated, a court may reach a decision contrary to the opinion. The Service
is not expected to issue a ruling on the tax effects of the Merger, and no such
ruling has been requested.

TREATMENT OF SHAREHOLDERS

Assuming that the Merger constitutes a "reorganization", the material
Federal income tax consequences expected to result from the Merger, under
currently applicable law, are as follows:

(i) Shareholders of the Company will recognize no gain or loss as a
result of the exchange of their Shares solely for ADSs pursuant to the
Merger, except with respect to cash received in lieu of fractional ADSs, if
any. A holder of Shares who receives cash in the Merger in lieu of a
fractional share interest in ADSs will be treated as if the fractional ADS
were received in the exchange and then redeemed by ING, and such holder
should generally recognize gain (or loss) to the extent that the amount of
cash received exceeds (or is less than) the tax basis of the fractional
ADS. Such gain or

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loss will be capital gain or loss if the Shares were held as capital assets
and will be long-term capital gain or loss if the holding period of the
Shares so exchanged was more than eighteen months.

(ii) The aggregate adjusted tax basis of the ADSs received by a
shareholder of the Company in the Merger, including the tax basis of any
fractional share interest, will be equal to the aggregate adjusted tax
basis of the respective Shares surrendered, reduced by the amount of cash
received by the stockholder, and increased by the amount of gain recognized
by the stockholder on such exchange.

(iii) The holding period of the ADSs received by a shareholder of
Company in the Merger, including the holding period of any fractional share
interest, will include the holding period of the respective Shares
exchanged therefor, provided the Shares were held as capital assets.

(iv) A shareholder of the Company who exchanges Shares for ADSs and
cash will recognize gain to the extent of the lesser of (1) the amount of
cash received or (2) the gain realized (the fair market value of the ADSs
and cash received less the stockholder's basis in the Shares surrendered);
provided that the cash payment does not have the effect of a dividend. Any
such gain will be recognized for Federal income tax purposes and will be
treated as capital gain provided the Shares were held as capital assets and
will be long-term capital gain if the holding period of the Shares so
exchanged was more than eighteen months.

Shareholders of the Company that are individuals will be subject to Federal
income tax upon the taxable disposition of Shares or ADSs at a maximum rate of
20 percent in the case of the Shares or ADSs held as capital assets for more
than 18 months, and at a maximum rate of 28 percent in the case of Shares or
ADSs held as capital assets for more than 12 months but not more than 18 months.

TREATMENT OF CASH RECEIVED AS CAPITAL GAIN OR DIVIDEND

A shareholder of the Company who has solely Cash Election Shares, and who
does not actually or constructively own any other ADSs, will receive capital
gain treatment with respect to any cash received. Shareholders of the Company
with Stock Election Shares and whose election is modified by the Exchange Agent
so that some cash is received, or shareholders of the Company who actually or
constructively own other ADSs, or shareholders of the Company who make different
elections with respect to different portions of their stock, will receive
capital gains or dividend treatment based upon the tests set forth below under
Section 302 of the Code. As more fully described below, the Company expects that
most shareholders will receive capital gain treatment on the cash received.

The determination of whether a cash payment has the effect of the
distribution of a dividend generally will be made in accordance with the
provisions of Section 302 of the Code. A cash payment to a shareholder of the
Company will be considered not to have the effect of the distribution of a
dividend under Section 302 of the Code and such shareholder will recognize
capital gain only if the cash payment (i) results in a "complete redemption" of
such shareholder's actual and constructive stock interest, (ii) results in a
"substantially disproportionate" reduction in such shareholder's actual and
constructive stock interest or (iii) is "not essentially equivalent to a
dividend".

A payment consisting solely of cash will result in a "complete redemption"
of a shareholder's stock interest and such shareholder will recognize capital
gain or loss if such shareholder does not actually or constructively own any
ADSs after the receipt of the cash payment. A reduction in a shareholder's stock
interest will be "substantially disproportionate" and such shareholder will
recognize capital gain if the percentage of outstanding ADSs actually and
constructively owned by such shareholder after the receipt of the cash payment
is less than four-fifths (80%) of the percentage of outstanding ADSs actually
and constructively owned by such shareholder immediately prior to the receipt of
the cash payment, determined as if the shareholder had received solely ADSs in
the Merger. A cash payment will qualify as "not essentially equivalent to a
dividend" and a shareholder will recognize capital gain if it results in a
meaningful reduction in the percentage of outstanding ADSs actually and
constructively owned by such shareholder, determined as if the shareholder had
received solely ADSs in the Merger. No specific tests apply to determine whether
a reduction in a shareholder's ownership interest is meaningful; rather, such

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46

determination will be made based on all the facts and circumstances applicable
to such shareholder of the Company. No general guidelines dictating the
appropriate interpretation of facts and circumstances have been announced by the
courts or issued by the Service. However, the Service has indicated in Revenue
Ruling 76-385 that a minority shareholder (i.e., a holder who exercises no
control over corporate affairs and whose proportionate stock interest is minimal
in relation to the number of shares outstanding) generally is treated as having
had a "meaningful reduction" in interest if a cash payment reduces such holder's
actual and constructive stock ownership to any extent.

Because the determination of whether a payment will be treated as having
the effect of the distribution of a dividend will generally depend upon the
facts and circumstances of each shareholder of the Company, shareholders are
strongly advised to consult their own tax advisors regarding the tax treatment
of cash received in the Merger.

Each shareholder's ability to elect the type of consideration he or she
receives pursuant to the Merger affords each such shareholder the opportunity to
select that type of consideration which will best serve his or her personal tax
and financial planning needs. However, each shareholder of the Company should be
aware that his or her ability to satisfy (or, alternatively, fail to satisfy)
any of the foregoing tests and thereby avoid (or, alternatively, obtain)
dividend treatment may be affected by (i) the type of consideration received by
related parties in respect of Shares that such shareholder is deemed to own
pursuant to Section 318 of the Code and (ii) any redesignation of the
shareholder's election by the Exchange Agent, without regard to whether such
shareholder has Cash Election Shares, Stock Election Shares or Non-Election
Shares.

CONSTRUCTIVE OWNERSHIP

The determination of ownership for purposes of the three foregoing tests
will be made by taking into account both stock owned actually by such
shareholder and stock owned constructively by such shareholder pursuant to
Section 318 of the Code. Under Section 318 of the Code, a shareholder will be
deemed to own stock that is actually or constructively owned by certain members
of his or her family (spouse, children, grandchildren and parents) and other
related parties including, for example, certain entities in which such
shareholder has a direct or indirect interest (including partnerships, estates,
trusts and corporations), as well as stock that such shareholder (or a related
person) has the right to acquire upon exercise of an option or conversion right.
Section 302(c)(2) of the Code provides certain exceptions to the family
attribution rules for the purpose of determining whether a complete redemption
of a shareholder's interest has occurred for purposes of Section 302 of the
Code. These exceptions apply only to shareholders of the Company who receive, in
the Merger, solely cash in return for the Shares they actually own.

THE FOREGOING DISCUSSION DOES NOT TAKE INTO ACCOUNT THE PARTICULAR FACTS
AND CIRCUMSTANCES OF EACH SHAREHOLDER'S TAX STATUS AND ATTRIBUTES. AS A RESULT,
THE FEDERAL INCOME TAX CONSEQUENCES ADDRESSED IN THE FOREGOING DISCUSSION MAY
NOT APPLY TO EACH SHAREHOLDER. IN VIEW OF THE INDIVIDUAL NATURE OF INCOME TAX
CONSEQUENCES, EACH SHAREHOLDER IS URGED TO CONSULT ITS OWN TAX ADVISOR TO
DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO SUCH SHAREHOLDER,
INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND OTHER TAX LAWS
AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL AND OTHER TAX LAWS.

REQUIRED REGULATORY APPROVALS

In addition to the requirement that the shareholders of the Company approve
the Merger Agreement, consummation of the Merger is subject to receipt by the
parties of various regulatory consents and approvals. Among the required
regulatory approvals are the expiration or early termination of the waiting
period under the HSR Act; the declaration (and continuance) of effectiveness by
the Commission of the Registration Statement of which this Prospectus/Proxy
Statement is a part; the approval or consent of various state securities
regulatory agencies; the approval of the change of control of the Company (or
its

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subsidiaries) by the respective insurance regulatory authorities in the states
of Iowa, Delaware, New York, and Oklahoma; and various additional consents of
insurance regulatory authorities which may be required under the insurance laws
of any state in which the Company, ING or any of their respective subsidiaries
are domiciled or doing business. To date, approvals have been received from the
insurance regulatory authorities in the states of Iowa and Delaware.

In addition, certain approvals of holders of contracts and policies which
are funded by investments in separate accounts of the Company Insurance
Companies (as defined in the Merger Agreement), which are registered under the
Investment Company Act of 1940, are required ("Investment Company Approvals"),
and in connection with that process, various proxy solicitation materials have
been reviewed and approved by the Commission.

RESALE OF ADSS

Rule 145(d) under the Securities Act provides that persons deemed to be
affiliates of a company such as the Company prior to a transaction such as the
Merger may be deemed underwriters and therefore be subjected to liability under
Federal securities law unless any resales of ADSs by such affiliates are made
within the following restrictions:

(i) If ADSs are sold within the first year after the receipt thereof,
such sale is made pursuant to certain of the requirements of Rule 144 under
the Securities Act providing limitations on the number of ADSs sold and the
manner in which such sale is made. The limitations generally require that
such affiliates of the Company not sell a number of ADSs equal to more than
1% of the outstanding Ordinary Shares in any three-month period and that,
when ADSs are sold, such sale be in a "brokers' transaction" or directly
with a "market maker" (as those terms are defined in Rule 144).

(ii) After one year, if such person is not an affiliate of ING and if
ING is current with respect to its required public filings, a former
affiliate of the Company may freely resell the stock received in the Merger
without limitation.

(iii) After two years from the issuance of the stock, if such person
is not an affiliate of ING at the time of sale and for at least three
months prior to such sale, such person may freely resell such stock,
without limitation, regardless of the status of ING's required public
filings.

An "affiliate" of the Company, as defined by the rules promulgated pursuant
to the Securities Act, is a person who directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
the Company. The foregoing restrictions are expected to apply to the directors,
executive officers and the holders of 10% or more of the Shares (and to certain
relatives or the spouse of any such person and any trusts, estates,
corporations, or other entities in which any such person has a 10% or greater
beneficial or equity interest). The Company has agreed that it will use its best
efforts to obtain from each of those individuals identified by ING as an
affiliate appropriate agreements that each such individual will not make any
further sales of ADSs received upon consummation of the Merger, except in
compliance with the restrictions described above. The ADSs to be received by
affiliates of the Company in the Merger will be legended as to the restrictions
imposed upon resale of such stock.

MANAGEMENT AND OPERATIONS AFTER THE MERGER

Merger Sub, a wholly-owned subsidiary of ING Groep, N.V., will be the
Surviving Corporation resulting from the Merger. Merger Sub will be governed by
the laws of the State of Delaware and will operate in accordance with the
articles of incorporation and bylaws of Merger Sub as in effect immediately
prior to the Merger, until otherwise amended or repealed after the Closing Date.
The directors of Merger Sub and the officers of the Company at the Closing Date
will be the directors and officers, respectively, of the Surviving Corporation.
The Surviving Corporation will change its name to "Equitable of Iowa Companies".
Effective as of the Effective Time, all members of the Company Board

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will be invited by ING to join the board of directors of its most directly held
United States insurance holding company.

INTERESTS OF CERTAIN PARTIES

In considering the recommendation of the Company Board with respect to the
Merger Agreement, shareholders of the Company should be aware that certain
executive officers and directors of the Company (or their affiliates) and other
employees of the Company have interests in the Merger that are similar to those
of the shareholders generally as a result of the holding of Shares by executive
officers and directors and participation in certain Share-based compensation
plans, but also that such executive officers and directors have interests in the
Merger that are different from and in addition to the interests of shareholders
of the Company generally. The Company Board was aware of these interests and
took these interests into account in approving the Merger Agreement.

EFFECT OF CHANGE OF CONTROL OF COMPANY ON COMPENSATION AND BENEFIT PLANS

Various compensation and benefit programs in place for selected groups of
key employees, members of the Company Board and certain insurance agents under
contract with Equitable Life contain provisions that result in the acceleration
of vesting and/or payouts at predetermined levels in the event of a "Change of
Control" of the Company. A Change of Control of the Company will have occurred
as of the Effective Time for purposes of this discussion.

Under the Restated and Amended Key Employee Incentive Plan approved by the
shareholders of the Company on April 27, 1995 (the "Restated and Amended Key
Employee Incentive Plan"), in the event of a Change of Control, payments will be
made at the target level (ranging from 10% to 70% of compensation, depending
upon the level at which the individual participant is participating). Pursuant
to the Merger Agreement, such payment will be made at the time such awards would
normally have been made in 1998. In addition, under the Restated and Amended Key
Employee Incentive Plan, certain executive officers were granted cash bonus
awards in 1995 to be paid in the event certain levels of cumulative operating
earnings for the three-year period ending December 31, 1997 are met, and only if
the executive exercises non-statutory stock options granted on the same date. In
the event of a Change of Control, payments under this program will be made at
target level. Pursuant to the Merger Agreement, the target level in the program
shall be deemed to have been met as of the Effective Time, and payments shall be
made on the Effective Time.

Under the terms of the Restated and Amended 1992 Stock Incentive Plan, in
the event of a Change of Control, the Compensation Committee can take various
courses of action, including the cashing out of unexercised stock options at the
difference between the Cash Consideration and the exercise price, multiplied by
the number of Shares underlying such options. Pursuant to the terms of the
Merger Agreement, payment under that formula will be made by the Company to all
individuals with outstanding stock options, plus any cash awards associated with
any of those options, less appropriate tax withholding. Pursuant to the terms of
the Merger Agreement, options granted under the 1996 Non-Employee Directors
Stock Option Plan will also be cashed out under such formula.

The individual restricted stock award agreements and the Merger Agreement
also provide that immediately prior to the Effective Time, all restricted stock
awarded under the Restated and Amended 1992 Stock Incentive Plan, and any
predecessor plan that has not vested, shall vest and any other applicable
restrictions shall lapse. Under the 1996 Directors Restricted Stock Program
(adopted pursuant to the terms of the Restated and Amended 1992 Stock Incentive
Plan), members of the Company Board may elect to receive restricted stock in
lieu of directors fees paid in cash, one-third of the restricted stock vests in
the event of a Change of Control occurring in 1997 and the remaining two-thirds
is forfeited.

The following table sets forth information with respect to the acceleration
of vesting and payout of unvested options, and acceleration of vesting of
restricted stock that will occur as of the Effective Time

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for (i) each of the executive officers named in the 1997 Proxy Statement for the
Annual Meeting of Shareholders of the Company, and (ii) all executive officers
and directors of the Company as a group.

OTHER CASH VESTING OF SHARES OF
UNVESTED SHARE PAYMENTS RESTRICTED STOCK(3)
OPTIONS(1) RELATED TO ----------------------
---------------------- UNVESTED SHARE UNVESTED
NAME SHARES PAYMENT OPTIONS(2) SHARES VALUE
- ---- ------- ----------- -------------- -------- ----------

Fred S. Hubbell........................ 165,000 $ 5,318,250 $310,000 25,560 $1,738,080
Chairman, President and Chief
Executive Officer
Paul E. Larson......................... 86,000 2,807,000 124,000 13,301 904,468
Executive Vice President and Chief
Financial Officer
Paul R. Schlaack....................... 84,400 2,749,450 124,000 15,906 1,081,608
President and Chief Executive Officer
EISI
Thomas L. May.......................... 46,200 1,407,550 0 7,064 480,352
Senior Vice President -- Marketing
Equitable Life and USG
Lawrence V. Durland, Jr. .............. 31,300 1,024,900 46,500 10,865 738,820
Senior Vice President
All Executive Officers and Directors as
a group (19)......................... 569,000 17,832,775 697,500 109,826 7,468,168

- ---------------

(1) Unvested Share Options consist of qualified and non-qualified Share options.
The payment amount is based on the difference between the $68.00 per Share
option and the exercise price attributable to each unvested Share option.
The number of unvested Share options set forth above is as of September 30,
1997. Each non-employee director will have options on 2,000 Shares vest,
with a cash payment of $49,375 ($47,500 for Gayle Greer).

(2) Certain performance-based cash awards were awarded with respect to options
granted in 1995 under the Company's Restated and Amended 1992 Stock
Incentive Plan. Cash awards are made only upon exercise of the associated
Share options. Under the terms of the Merger Agreement, these cash payments
will be made as part of the cash-out of the related Share options. No such
cash payments are to be made to non-employee directors.

(3) The value of restricted stock that vests is based on $68.00 per Share. Each
non-employee director will have 641 shares of restricted stock vest (320 for
James Heskett), with a value of $43,588 ($21,760 for James Heskett).

The total number of unvested Share options outstanding for all individuals
(81) as of September 30, 1997, including those listed above, is 1,017,900 and
the total of all cash payments related to those stock options that will be made
as of the Effective Time is $32,344,114. The total number of Shares of
restricted stock that will vest as of the Effective Time with respect to all
individuals (60), including those listed above, is 162,391 Shares, having a
total value of $11,042,588 based on $68.00 per Share.

Under the Restated and Amended "Equishare" Wealth Accumulation Program,
which was originally established on January 1, 1988, certain insurance agents
under contract with Equitable Life who meet established criteria each year are
awarded units tied to the value of Shares, with a separate vesting schedule
applied to that year's award. Under the terms of the program, all units
immediately vest upon a Change of Control. Also, under the Recruiting General
Agent Equity Builder Plan, which was established on January 1, 1995, units are
awarded to recruiting general agents for production above a certain level. The
program calls for a five-year vesting schedule with respect to the units
awarded. Under the terms of the plan, in the event of a Change of Control, all
units immediately vest. Under both of these programs, payment with respect to
all vested and unvested units will be made (including any vested units that an
individual has elected to defer), based upon the Cash Consideration times the
number of units credited to each participant's account.

The Restated Equitable of Iowa Companies Key Employee Severance Pay Plan
adopted by the Compensation Committee of the Board of the Company (most recently
amended and restated on February 12, 1997) provides for two years of pay
(including health and group life benefits) for one group of key employees, and
one year of pay (including health and group life benefits) for a second group of
key employees in the event an individual is terminated from employment within
one year of a Change of

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Control. It does not apply to voluntary termination of employment. As of the
date of this Prospectus/Proxy Statement, it is unknown whether any individual
will be receiving benefits under this plan. See "-- Employment Agreements"
below.

There is a Company-wide performance sharing plan (the "Company Performance
Sharing Plan") in place for 1997 for employees not covered by the 1997 program
adopted under the Restated and Amended Key Employee Incentive Plan. Pursuant to
the terms of the Merger Agreement, if the Effective Time occurs in 1997, all
performance criteria under the Company Performance Sharing Plan for 1997 will be
deemed to have been met at the target level, with payment of awards at the same
time awards under such plan would normally have been paid in 1998.

INDEMNIFICATION

In the Merger Agreement, ING Groep N.V. has agreed that it will indemnify
and hold harmless each present and former director and officer of the Company,
or any of the Company's subsidiaries and each officer or employee of the Company
or any of its subsidiaries that is serving or has served as a director or
trustee of another entity expressly at the Company's request or direction
determined as of the Effective Time (the "Indemnified Parties"), against costs
or expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred by any of the
Indemnified Parties in connection with any claim, action, suit, proceeding or
investigation whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters arising out of any of such Indemnified Parties'
position as, or actions taken as, a director or officer of the Company or any of
its subsidiaries or as a director or trustee of another entity where the
Indemnified Party was serving at the direction of the Company at or prior to the
Effective Time. The indemnification provided is to the fullest extent that the
Company would have otherwise been permitted under Iowa law and its articles of
incorporation or bylaws as in effect on the date of the Merger Agreement to
indemnify any such person.

In addition, ING has agreed that it would indemnify and hold harmless each
present director and officer of the Company against any Costs which might be
incurred by such persons in connection with any and all claims, actions, suits,
proceedings or investigations whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters related to such
individual's position as (or actions taken as) a director or officer of the
Company where such actions were taken in connection with the Merger or the
transactions contemplated under the Merger Agreement at or prior to the
Effective Time. This indemnification is provided whether or not it would have
otherwise been available pursuant to the Company's articles of incorporation and
bylaws. However, ING will not be required to provide indemnification to any
person where a court has, in a final and nonappealable order, determined that
such person has committed fraud in connection with the transactions contemplated
in the Merger Agreement. The Merger Agreement also provides that if the
Surviving Corporation shall subsequently consolidate or merge into any other
corporation or transfer substantially all of its properties or assets to any
third party, then in each such case, provisions will be made so that the
successors and assigns of the Surviving Corporation shall also assume all of the
indemnification obligations otherwise provided in the Merger Agreement.

The Surviving Corporation is required to maintain a policy of officers' and
directors' liability insurance for acts and omissions occurring prior to the
Effective Time with coverage in amount and scope at least as favorable as the
Company's existing directors' and officers' liability insurance coverage.

EMPLOYMENT AGREEMENTS

As of the date of this Prospectus/Proxy Statement, five executive officers
of the Company have entered into employment agreements ("Employment Agreements")
with Merger Sub providing for their employment for a three-year period
commencing on the Effective Time (the "Commencement Date"). The Employment
Agreements will become null and void and of no effect if the Commencement Date
does not occur on or before March 31, 1998. Those executives with Employment
Agreements are Fred S. Hubbell, who will be employed as General Manager of the
United States operations of the ING Financial

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Services International management centre, and Paul E. Larson, Thomas L. May,
Jerry Sychowski and Paul R. Schlaack, each of whom will serve as officers of the
Surviving Corporation or one of its affiliates.

Under the terms of the Employment Agreements, Messrs. Hubbell, Larson, May,
and Schlaack (the executive officers named in the proxy statement for the 1997
Annual Meeting of Shareholders of the Company who have entered into employment
agreements with Merger Sub) will receive a base salary ("Base Salary") of
$675,000, $375,000, $245,000, and $375,000, respectively (their base salaries
are currently $600,000, $323,000, $230,000, and $348,000, respectively) and will
be able to participate in the Surviving Corporation's short-term incentive plan
(the "STIP") and long-term incentive plan ("LTIP") on the same terms and
conditions under which similarly situated senior executives of the Surviving
Corporation participate; provided that the target bonus under the STIP for
Messrs. Hubbell, Larson, May, and Schlaack shall be set at a level no less than
70%, 50%, 40%, and 50% of Base Salary, respectively; and provided, further, that
the target payout under the LTIP for Messrs. Hubbell, Larson, May, and Schlaack
shall be set at a level no less than 80%, 65%, 45%, and 65% of Base Salary,
respectively, and the maximum amount payable under the LTIP for Messrs. Hubbell,
Larson, May, and Schlaack shall be an amount no less than 128%, 104%, 72%, and
104% of Base Salary, respectively; and provided, further, that portions of
amounts otherwise payable under the LTIP may be provided through a stock option
plan for ING employees.

The Employment Agreements provide that each executive will be eligible to
participate in the savings, retirement, welfare, fringe and other similar plans,
policies and programs of the Company to the extent such plans, policies and
programs are continued by the Surviving Corporation, or if not continued, then
in such plans, policies and programs as are applicable to similarly situated
senior executives of the Surviving Corporation. Each executive will also be
entitled to not less than four weeks of vacation per year and the same
perquisites as received from the Company immediately prior to the Commencement
Date.

Each Employment Agreement also provides for certain payments to be made to
the executive upon termination of employment. In the event that an executive's
employment is terminated by reason of death or for Good Reason (as defined in
such Employment Agreement), and such termination occurs on or prior to the first
anniversary of the effective date of the Commencement Date, the executive (or
his beneficiaries or estate) will be entitled to be paid an amount equal to
three times the executive's Base Salary. If such termination of employment
occurs after the first anniversary but on or before the second anniversary of
the Commencement Date, the executive (or his beneficiaries or estate) will be
entitled to receive an amount equal to two times the executive's Base Salary. If
such termination occurs after the second anniversary of the date of the
Commencement Date, the executive (or his beneficiaries or estate) will be
entitled to receive an amount equal to one times the executive's Base Salary. In
addition to such payments, the executive would also be entitled to receive any
Base Salary due through the date of termination to the extent that it is not
paid, plus the excess, if any, of the amounts payable under any qualified
retirement plan in which the executive participates (assuming the limitations
under Section 401(a)(17) and 415 of the Code did not apply) over the amounts
actually payable pursuant to such plan, plus any amounts accrued as of the
Commencement Date under the Company's Excess Benefit Plan and Supplemental
Employee Retirement Plan to the extent those amounts had not been previously
paid ("Additional Amounts"). The amounts payable based on the executive's Base
Salary are to be paid in cash according to the Surviving Corporation's normal
payroll practices in equal installments over a period (the "Payment Period") of
three years if the termination occurs on or prior to the first anniversary of
the Commencement Date; over a period of two years if termination occurs after
the first anniversary but on or before the second anniversary of the
Commencement Date; or over a period of one year if the termination occurs after
the second anniversary of the Commencement Date. The Employment Agreements also
provide that health insurance and group life insurance benefit plans will be
continued during the Payment Period.

In the event the executive's employment is terminated by the Surviving
Corporation, other than for Cause (as defined in such executive's Employment
Agreement), the Surviving Corporation will pay to the executive, if such
termination of employment occurs on or prior to the second anniversary of the
Commencement Date, an amount equal to two times the executive's Base Salary or,
if such termination of employment occurs after the second anniversary of the
Commencement Date, an amount equal to one

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times the executive's Base Salary, payable in equal installments according to
the Surviving Corporation's normal payroll practices over a two-year period if
termination occurs on or prior to the second anniversary of the Commencement
Date or over a period of one year if the termination occurs after the second
anniversary of the Commencement Date. Health insurance and group life insurance
benefits will be continued during such period. In addition, the executive will
also be entitled to receive any Base Salary due through the date of termination
to the extent not theretofore paid, plus any Additional Amounts.

In the event the executive's employment is terminated by the Surviving
Corporation for Cause or terminated by the executive other than for Good Reason,
the Employment Agreement will terminate without any further obligations from the
Surviving Corporation to the executive other than the obligation to pay Base
Salary due, and otherwise unpaid, through the date of termination of employment.

Each executive has agreed that while employed by the Surviving Corporation
and for the Applicable Period (as defined below) following such executive's date
of termination, the executive will not directly or indirectly (i) own, manage,
operate, control, be employed by, advise or in any manner participate in any
business engaged in the development, design, marketing, sales, distribution or
servicing of fixed or variable annuity products, variable life insurance
policies, term insurance or any general account life insurance, or similar
products offered by the Surviving Corporation or its affiliates, any of which
are to be distributed at any location in the United States, and (ii) on behalf
of the executive or any other person, solicit for employment by other than the
Surviving Corporation any person employed by the Surviving Corporation or its
affiliates, or known by the executive to be employed at the time by the
Surviving Corporation or its affiliates. For purposes of the Employment
Agreements, the Applicable Period is (A) in the event of termination of
employment by the Surviving Corporation for Cause or by the Executive without
Good Reason, (i) nine months, if such termination occurs on or before the first
anniversary of the Commencement Date, (ii) six months, if such termination
occurs after the first anniversary but on or before the second anniversary of
the Commencement Date, or (iii) non-existent (i.e., there is no Applicable
Period) if such termination occurs after the second anniversary of the
Commencement Date; (B) in the event of termination of employment by the
Executive for Good Reason, (i) 18 months, if such termination occurs on or
before the first anniversary of the Commencement Date, (ii) 12 months, if such
termination occurs after the first anniversary but on or before the second
anniversary of the Commencement Date, or (iii) non-existent (i.e., there is no
Applicable Period) if such termination occurs after the second anniversary of
the Commencement Date; or (C) in the event of termination of employment by the
Corporation without Cause, (i) 12 months, if such termination occurs on or
before the second anniversary of the Commencement Date, or (ii) non-existent
(i.e., there is no Applicable Period) if such termination occurs after the
second anniversary of the Commencement Date. None of these executives are
currently subject to any non-competition agreements or similar covenants with
the Company.

In consideration for the payments to be received under the Employment
Agreements, each executive has agreed to waive any and all rights to any
payments or benefits, in the nature of severance, otherwise payable to the
executive under any of the Company's plans, programs, contracts or arrangements,
including but not limited to the Company's severance pay plan for key employees,
or under any such plans, programs, contracts or arrangements of the Surviving
Corporation or its affiliates that provide for severance payments or benefits
upon a termination of employment.

Subsequent to July 7, 1997 Terry L. Kendall, President and Chief Executive
Officer of Golden American, entered into an Amended and Restated Severance and
Non-Compete Agreement with the Company effective as of the Effective Time
providing for severance benefits in addition to the benefits provided in his
current Severance and Non-Compete Agreement dated as of May 2, 1996.

CONTINUATION OF EMPLOYEE BENEFIT PLANS

With respect to certain retirement and welfare benefit plans in place for
employees of the Company and its subsidiaries and identified in the Merger
Agreement (generally, all plans currently in place except for certain programs
tied to the value of Shares), the Merger Agreement provides that for a two-year
period following the Effective Time, all such plans or, alternately,
substantially similar benefits will

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continue to be provided to such employees, unless ING integrates or consolidates
the employee benefit plans covering its employees located in the United States.
In such event, the employees of the Company and its subsidiaries will then be
eligible to participate and receive benefits under such integrated or
consolidated benefit plans of ING on substantially the same terms and conditions
applicable to similarly situated employees in the United States.

DISSENTERS' RIGHTS OF SHAREHOLDERS OF THE COMPANY

Each shareholder of the Company has the right to demand to be paid the fair
value of such share-holder's Shares in cash upon consummation of the Merger if
such shareholder follows the dissenters' rights procedures set forth in Division
XIII of the BCA. "Fair value" is defined in the BCA as the value of the subject
Shares immediately prior to the consummation of the Merger, excluding any
appreciation or depreciation in anticipation of the Merger unless such an
exclusion would be inequitable.

Under the BCA, a shareholder of the Company may dissent from the Merger and
obtain the fair value of the Shares owned by such shareholder with such fair
value to be paid in cash if the Merger is consummated. Any shareholder of the
Company who wishes to assert dissenters' rights (a "Dissenting Shareholder")
must do both of the following: (i) deliver to the Company before the vote on the
Merger is taken a written notice of such shareholder's intent to demand payment
of the fair value of such shareholder's Shares if the Merger is effectuated, and
(ii) not vote such Shares in favor of the approval of the Merger at the Special
Meeting. A VOTE AGAINST THE APPROVAL OF THE MERGER WILL NOT, BY ITSELF, BE
REGARDED AS A WRITTEN NOTICE OF A SHAREHOLDER'S INTENT TO ASSERT DISSENTERS'
RIGHTS.

If the Merger is approved at the Special Meeting, the Company shall deliver
a written notice to each person who asserted dissenters' rights and who did not
vote in favor of the approval of the Merger as described above. The notice must
be sent by the Company no later than 10 days after the Special Meeting and must:
(i) state where a demand for payment must be sent by a Dissenting Shareholder
and where and when the Certificates evidencing the Shares owned by such
shareholder must be deposited, (ii) supply a form with which Dissenting
Shareholders may make their demands for payment, which form will include the
date of the first public announcement of the proposed Merger and a requirement
that each Dissenting Shareholder certify as to whether or not it had acquired
beneficial ownership of the Shares subject to the dissenters' rights demand
prior to the date of the first public announcement of the proposed Merger, (iii)
set a date by which the Company must receive the demand for payment from the
Dissenting Shareholder, which date shall not be fewer than 30 nor more than 60
days after the date of the Company's notice to Dissenting Shareholders, and (iv)
a copy of Division XIII of the BCA.

A Dissenting Shareholder must demand payment for such shareholder's Shares,
certify as to whether the acquisition dates of such Shares were prior to or
after the public announcement of the proposed Merger and deposit the
Certificates evidencing such Shares prior to the date set in and in accordance
with the notice sent by the Company to Dissenting Shareholders. A shareholder
who does not demand payment or deposit Certificates by the date or in the manner
set forth in the notice to Dissenting Shareholders sent by the Company will not
be entitled to payment of the fair value of such Shares under Division XIII of
the BCA. The Company (or Merger Sub, as the Surviving Corporation in the Merger)
must make a cash payment to each Dissenting Shareholder who files a demand for
payment as described above equal to the Company's (or Merger Sub's) estimate of
the fair value of the Shares owned by such shareholders, plus accrued interest
on such payment from the Closing Date. Such payment must be made upon the later
of (i) the time the Merger is consummated or (ii) the receipt of the demand for
payment from the Dissenting Shareholder. If the Merger is not consummated within
60 days of the date set by the Company for receipt of the Dissenting
Shareholders' demands for payment and deposits of Certificates, the Company must
return the deposited Certificates and send a new notice to Dissenting
Shareholders if the Merger is actually consummated and repeat the payment demand
procedure. The payment must be accompanied by the following: (i) the Company's
balance sheet as of the end of its most recently completed fiscal year, an
income statement and a statement of changes in shareholders' equity as of the
most recently completed fiscal year and interim financial statements of the
Company as of and for the most recent date or period available; (ii) a statement
of the Company's (or

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Merger Sub's) estimate of the fair value of the Shares; (iii) an explanation as
to how the interest payment was calculated; (iv) a statement of the Dissenting
Shareholder's right to demand a greater payment than the Company's estimate as
described below; and (v) a copy of Division XIII of the BCA.

The Company (or Merger Sub) may elect to withhold payment from those
Dissenting Shareholders unless the Dissenting Shareholder owned the shares
before the date set forth in the Dissenter's Notice as the date of the first
public announcement of the proposed Merger. To the extent that the Company (or
Merger Sub) elects to withhold payment from such Dissenting Shareholders, the
Company (or Merger Sub) shall estimate the fair value of the Shares owned by
such holders and accrued interest thereon and offer to pay the same to each such
Dissenting Shareholder who agrees to accept it in full satisfaction of its
demand. The offer to such shareholders must be accompanied by: (i) a statement
of the Company's (or Merger Sub's) estimate of fair value, (ii) an explanation
as to how the interest payment was calculated and (iii) a statement of the
Dissenting Shareholder's right to demand a greater payment than the Company's
(or Merger Sub's) estimate as described below.

After receipt of the Company's (or Merger Sub's) estimate of fair value in
either of the above cases, a Dissenting Shareholder may deliver notice to the
Company (or Merger Sub) of its own estimate of fair value for such shareholder's
Shares and the amount of interest due and demand payment of the difference in
amount, if any, previously paid by the Company (or Merger Sub) to such
shareholder and the amount of the shareholder's estimate or reject the Company's
offer and demand payment of the fair value of the Dissenter's Shares plus
interest. In order to make such a demand: (i) the Dissenting Shareholder must
believe that the amount paid or offered by the Company (or Merger Sub) is less
than the fair value of the Shares or the interest is incorrectly calculated, or
(ii) the Company (or Merger Sub) has not made payment for the Shares within 60
days after the date set by the Company (or Merger Sub) as the last day that the
Company (or Merger Sub) set for accepting demands for payment, or (iii) the
Merger has not been consummated within the 60-day period after the last date
that the Company (or Merger Sub) set for accepting demands for payment and the
Company has not returned the Certificates deposited by the Dissenting
Shareholder. A Dissenting Shareholder will waive his or her right to seek a
greater payment than the Company's estimate of fair value and accrued interest
unless such shareholder notifies the Company (or Merger Sub) in writing of the
same within 30 days of the receipt of the Company's (or Merger Sub's) payment or
offer of payment for the Shares.

If, within 60 days of receiving the Dissenting Shareholder's notice of a
demand for increased payment, the demand remains unsettled, the Company (or
Merger Sub) must commence proceedings in the district court of the county where
its principal office is located, petitioning the court to determine the fair
value and accrued interest of such Shares. If the Company (or Merger Sub) fails
to start such proceedings within the 60-day period, the Company (or Merger Sub)
must pay each Dissenting Shareholder whose demand remains unsettled the amount
that such shareholder has demanded. All Dissenting Shareholders with claims
remaining unsettled will be made parties to the proceedings and the court may
appoint one or more appraisers to receive evidence and recommend the fair value
of the Shares. The court will find either (i) that the fair value and accrued
interest already paid by the Company (or Merger Sub) equals or exceeds the
amount determined by the court, in which case the shareholder will be entitled
to no additional payment from the Company (or Merger Sub), or (ii) that the
Company (or Merger Sub) must pay an additional amount equal to the difference
between the court's determination of fair value and accrued interest and the
amount already paid by the Company (or Merger Sub) to the shareholder.

The court shall also determine all costs of the proceedings, including the
reasonable compensation and expenses of the appraisers appointed by the Court,
and shall assess such costs against the Company (or Merger Sub) unless the court
finds that such an assessment would be inequitable because Dissenting
Shareholders had acted arbitrarily, vexatiously or not in good faith, in which
case the court may assess costs against all or some of the dissenters. Fees and
expenses of legal counsel and experts will generally be borne by each of the
parties except that the experts' and attorneys' fees and expenses of the
Dissenting Shareholders will be assessed against the Company (or Merger Sub) to
the extent that the court finds the Company did not substantially comply with
the procedures set forth in Division XIII of the BCA or to either party in favor
of the other party to the extent that the court finds that the assessed

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party acted arbitrarily, vexatiously or not in good faith. To the extent that
counsel for one Dissenting Shareholder is found by the court to have provided a
substantial benefit to other Dissenting Shareholders, the court may order that
the fees of such counsel be paid out of the amounts awarded to the Dissenting
Shareholders who have been benefited.

THE PRECEDING DISCUSSION IS A SUMMARY OF THE PROVISIONS REGARDING DISSENTERS'
RIGHTS UNDER THE BCA AND IS QUALIFIED IN ITS ENTIRETY BY THE TEXT OF DIVISION
XIII OF THE BCA, WHICH IS ATTACHED AS ANNEX C TO THIS PROSPECTUS/PROXY
STATEMENT. THE SHAREHOLDERS OF THE COMPANY WHO ARE INTERESTED IN ASSERTING
DISSENTERS' RIGHTS PURSUANT TO THE BCA IN CONNECTION WITH THE MERGER MAY WISH TO
CONSULT WITH THEIR COUNSEL FOR ADVICE AS TO THE PROCEDURES REQUIRED TO BE
FOLLOWED.

ACCOUNTING TREATMENT

The Merger will be accounted for under the purchase method of accounting.
Accordingly, data regarding the financial condition and results of operations of
the Company will be included in ING's consolidated financial statements only on
and after the Closing Date.

THE MERGER AGREEMENT

The following describes certain aspects of the proposed Merger, including
material provisions of the Merger Agreement. The following description of the
Merger does not purport to be complete and is qualified in its entirety by
reference to the Merger Agreement, which is attached as Annex A to this
Prospectus/Proxy Statement and is incorporated herein by reference. Holders of
Shares are urged to read the Merger Agreement carefully.

GENERAL; MERGER CONSIDERATION

The terms of the Merger are set forth in the Merger Agreement that was
approved by the Company Board and signed by the Company, ING Groep N.V. and
Merger Sub on July 7, 1997 and a copy of which is attached hereto as Annex A.
Pursuant to the Merger Agreement, and on the terms and conditions thereof, at
the Effective Time, the Company will be merged with and into Merger Sub, with
Merger Sub as the surviving entity, and Merger Sub will succeed to the business
of the Company and will take the Company's name. Each Share outstanding
immediately prior to the Effective Time, other than Shares held directly by ING
Groep N.V. or Shares that are owned by the Company or any subsidiary of the
Company (other than Shares owned by the Company in connection with certain
pension and similar employee benefit plans) and in each case not held on behalf
of third parties (collectively, "Cancelable Shares") or Shares that are owned by
Dissenting Shareholders ("Dissenting Shares" and, together with the Cancelable
Shares, "Excluded Shares") will be converted into, and become exchangeable for,
at the election of the holder thereof (subject to the limitations and
adjustments described below under "-- Exchange of Share Certificates; Allocation
of Merger Consideration") for either (i) $68 in cash or (ii) a number of ADSs
equal to the number derived by dividing $68 by the Average Closing Price,
provided that if the Average Closing Price is less than $40.2864, the number of
ADSs shall be 1.6879, and if the Average Closing Price is greater than $54.5052,
the number of ADSs shall be 1.2476, subject to, in the former case, the right of
the Company to terminate the Merger Agreement and, in the latter case, the right
of ING Groep N.V. to terminate the Merger Agreement, which rights of termination
shall be nullified if the other party agrees to Stock Consideration with a
value, based on the Average Closing Price, of $68. See "THE MERGER -- Certain
Federal Income Tax Consequences of the Merger" for a discussion of tax
consequences of receiving the Cash Consideration, the Stock Consideration or a
combination thereof.

The Cash Election Number (the maximum number of Shares to be converted into
the right to receive Cash Consideration) is limited to (i) 50 percent of the
number of Shares issued and outstanding

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immediately prior to the Effective Time less the number of Cancelable Shares
less (ii) the number of Dissenting Shares the holders of which have not failed
to perfect or have not lost the right to dissent from the merger under the BCA
and the aggregate number of Shares which entitle the holders thereof to receive
cash in lieu of fractional ADSs. The Stock Election Number (the maximum number
of Shares to be converted into the right to receive ADSs in consideration
therefor) shall be equal to 60 percent of the number of Shares outstanding
immediately prior to the Effective Time less the number of Cancelable Shares. In
connection with the foregoing percentages, any Shares owned directly by ING
Groep N.V. which are canceled pursuant to the Merger Agreement will be
considered Cash Election Shares and, to the extent any Shares beneficially owned
by ING Groep N.V. are not canceled and are Stock Election Shares, the Stock
Election Number shall be so increased. As a result of the foregoing limitations
on the number of Shares which may be converted into the right to receive ADSs or
to receive cash, each shareholder may receive more or less ADSs than such holder
has elected depending on the elections made by all shareholders. See
"-- Exchange of Share Certificates; Allocation of Merger Consideration".

CLOSING; EFFECTIVE TIME

The Closing will take place on the first business day on which the last to
be fulfilled or waived of the conditions to the Merger set forth in the Merger
Agreement as to be fulfilled prior to Closing is satisfied or waived or on such
other day as the Company and ING Groep N.V. may agree. As soon as practicable
following the Closing, Merger Sub will deliver to the Secretary of State of the
State of Iowa the Articles of Merger and will file with the Secretary of State
of the State of Delaware the Delaware Certificate of Merger. The Merger will
become effective on the date on which the later of the following actions shall
have been completed: (i) at the time when the Articles of Merger are effective
and (ii) the Delaware Certificate of Merger has been duly filed with the
Secretary of State of the State of Delaware. See "-- Conditions to Each Party's
Obligations" and "THE MERGER -- Required Regulatory Approvals".

EXCHANGE OF SHARE CERTIFICATES; ALLOCATION OF MERGER CONSIDERATION

No later than 20 days before the anticipated Closing Date, ING Groep N.V.
shall cause the Exchange Agent to mail or make available to each holder of
record of Shares an Election Form permitting the holder to elect to receive the
Cash Consideration with respect to any or all of such holder's Shares, to elect
to receive the Stock Consideration with respect to any or all of such holder's
Shares or to indicate that such holder makes no election. Holders of Shares may
elect to receive the Cash Consideration, the Stock Consideration or a
combination thereof. Any Shares with respect to which the holder shall not have
submitted to the Exchange Agent an effective, properly executed Election Form,
together with the certificates representing the Shares subject thereto (or
customary affidavits and indemnification regarding the loss or destruction of
such certificates or an appropriate guarantee of delivery of such certificates
by a commercial bank or trust company in the United States or a member of a
registered national security exchange or of the National Association of
Securities Dealers, Inc.; provided that such certificates are in fact delivered
to the Exchange Agent within three trading days after the date of execution of
such guarantee of delivery), on or before 5:00 P.M. on the Election Deadline
(which date will be publicly announced by ING Groep N.V. on the Closing Date)
shall be deemed to be Non-Election Shares. The Company shall use its best
efforts to make an Election Form available to all persons who become holders of
record of Shares (other than Excluded Shares) between the date of such mailing
by the Exchange Agent and the Election Deadline.

ING Groep N.V. will determine in its absolute and sole discretion, which
authority it may delegate in whole or in part to the Exchange Agent, whether
Election Forms have been properly completed, signed and submitted or revoked.
The decision of ING Groep N.V. (or the Exchange Agent, as the case may be) in
such matters shall be conclusive and binding. Neither ING Groep N.V. nor the
Exchange Agent will be under any obligation to notify any person of any defect
in a Election Form submitted to the Exchange Agent.

In the event that the aggregate number of Cash Election Shares exceeds the
Cash Election Number, all Non-Election Shares will be deemed Stock Election
Shares and a pro rata share of Cash Election Shares will be deemed converted
into Stock Election Shares, so that the number of Cash Election Shares remaining
after such conversion shall equal as closely as practicable the Cash Election
Number.

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In the event that the aggregate number of Stock Election Shares exceeds the
Stock Election Number, all Non-Election Shares will be deemed Cash Election
Shares and a pro rata share of Stock Election Shares will be deemed converted
into Cash Election Shares so that the number of Stock Election Shares remaining
after such conversion shall equal as closely as practicable the Stock Election
Number.

LOST, DESTROYED OR STOLEN CERTIFICATES

In the event any certificate representing Shares shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate to be lost, stolen or destroyed and, if required by
ING, the posting by such person of a bond in customary amount as indemnity
against any claim that may be made against it with respect to such certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
certificate the applicable merger consideration as provided in the Merger
Agreement.

REVOCATION OF ELECTION FORM

NO FRACTIONAL ADSS

No fractional ADS will be issued and any holder of Shares otherwise
entitled to receive a fractional ADS shall be entitled to receive a cash payment
in lieu thereof, calculated based on the amount of such fractional interest and
the Average Closing Price.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains various representations and warranties
customary for similarly structured mergers of insurance companies relating to,
among other things: (a) each of ING Groep N.V.'s, the Company's and Merger Sub's
capitalization and organization and similar corporate matters; (b)
authorization, execution, delivery, performance and enforceability of the Merger
Agreement and related matters; (c) conflicts under governing documents, required
consents or approvals, and violations of any agreements or law; (d) documents
filed by the Company with the Commission and the accuracy of information
contained therein; (e) absence of certain material adverse events, changes or
effects; (f) undisclosed liabilities; (g) the accuracy of information supplied
by each of ING Groep N.V. and the Company; (h) the opinion of the financial
advisor of the Company; (i) in the case of the Company, retirement and other
employee plans and matters relating to the Employee Retirement Income Security
Act of 1974, as amended; (j) in the case of the Company, ownership of
intellectual property, computer technology and other assets; (k) litigation; (l)
in the case of the Company, compliance with law, including compliance with
insurance, investment company, tax and environmental laws and regulations; and
(m) the absence of reliance on the other party, except for the representations
and warranties contained in the Merger Agreement.

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COMPANY INTERIM OPERATIONS

The Company has covenanted and agreed as to itself and each of its
subsidiaries that after the date of the Merger Agreement and prior to the
Effective Time (unless ING Groep N.V. shall otherwise approve in writing and
except as otherwise expressly contemplated by the Merger Agreement) that the
Company (a) shall conduct its business in the usual course consistent with past
practice and shall use its best efforts to preserve its business organization
intact and maintain its existing relations and goodwill with customers,
suppliers, distributors, agents, regulators, creditors, lessors, employees and
business associates; (b) shall not issue, sell, pledge, dispose of or encumber
any capital stock owned by it in any of its subsidiaries; (c) shall not amend
its articles of incorporation, by-laws or comparable governing instruments; (d)
shall not split, combine or reclassify its outstanding shares of capital stock
or set aside or pay any cash dividends other than (i) dividends from
subsidiaries and (ii) regular quarterly cash dividends not in excess of $0.165
per Share; (e) shall not repurchase, redeem or otherwise acquire (except in
connection with certain employee benefit plans) any shares of the Company's
capital stock or any securities convertible into or exchangeable or exercisable
for any shares of capital stock; (f) shall not issue, sell, pledge, dispose or
encumber any shares of, or any rights or securities with rights to acquire, any
capital stock or debt with voting rights; (g) other than in the ordinary and
usual course of business, shall not transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of or encumber any other property or assets or modify
any material indebtedness or other liability; (h) shall not incur any
indebtedness with a maturity of one year or more or make certain capital
expenditures; (i) shall not alter any employee benefits or compensation; (j)
shall not settle or compromise any material claims or litigation or, except in
the ordinary course of business, modify, amend or release any of its material
contracts or waive, release or assign any material rights or claims; (k) shall
not make any tax election or permit any insurance policy naming it as a
beneficiary or loss-payable payee to be canceled or terminated except in the
ordinary and usual course of business; (l) shall not take any action or omit to
take any action that would cause any representation or warranty of the Company
in the Merger Agreement to become untrue in any material respect; and (m) shall
not authorize any of, or commit or agree to take any of, the foregoing actions.

ING INTERIM OPERATIONS

ING Groep N.V. has covenanted and agreed as to itself and each of its
subsidiaries that after the date of the Merger Agreement and prior to the
Effective Time (unless the Company shall otherwise approve in writing and except
as otherwise expressly contemplated by the Merger Agreement) that ING Groep N.V.
shall not (a) amend its governing instruments in any manner that would have any
adverse impact on the Merger or which would amend or modify the terms or
provisions of ING Groep N.V.'s capital stock; (b) effect any reclassification,
stock split, stock combination, or stock dividend with Ordinary Shares (other
than a stock split, stock dividend or similar transaction and other than regular
interim and final stock dividends); (c) merge or consolidate with any other
person if such merger or consolidation could reasonably be expected to have a
material adverse impact on its ability to consummate the Merger; (d) declare,
set aside or pay any dividend payable in cash, stock or property in respect of
any capital stock other than (i) dividends from subsidiaries, (ii) regular
interim and final cash and stock dividends and (iii) dividends on preferred
stock in accordance with its terms; (e) (i) issue, sell, pledge, dispose of or
encumber any shares of, or rights or securities with rights to, its capital
stock or any voting debt or any other property or assets or (ii) acquire any
business or any corporation, partnership, joint venture, association or other
business organization or division thereof, if any such action could reasonably
be expected to (x) delay materially the date of mailing of this Prospectus/Proxy
Statement such that the Closing would be delayed past March 31, 1998, (y) if it
were to occur after such date of mailing, require an amendment of this
Prospectus/Proxy Statement such that the Closing would be delayed past March 31,
1998 or (z) have a material adverse effect on the ability of ING Groep N.V. to
consummate the transactions contemplated by this Agreement; and (f) authorize
any of, or commit or agree to take any of, the foregoing actions.

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CERTAIN COVENANTS OF THE COMPANY AND ING GROEP N.V.

The Company has agreed that neither it nor any of its subsidiaries nor any
of their respective directors and officers shall, and it shall use its best
efforts to cause its and its subsidiaries' Representatives (as defined in the
Merger Agreement) not to, directly or indirectly, initiate, solicit, encourage
or otherwise facilitate any inquiries or the making of any proposal or offer
with respect to a merger, reorganization, share exchange, consolidation or
similar transaction involving, or any purchase of all or any significant portion
of the assets or any equity securities of, it or any of its subsidiaries (any
such proposal or offer, an "Acquisition Proposal"). The Company has further
agreed that neither it nor any of its subsidiaries nor any of the officers and
directors of either shall, and that it shall direct and use its best efforts to
cause their Representatives not to, directly or indirectly, engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal; provided, however, that nothing contained in the Merger Agreement
shall prevent the Company or its board of directors from (a) complying with Rule
14e-2 promulgated under the Exchange Act with regard to an Acquisition Proposal;
(b) providing, subject to certain confidentiality requirements, information in
response to a request therefor by a person who has made an unsolicited bona fide
written Acquisition Proposal; (c) engaging in any negotiations or discussions
with any Person who has made an unsolicited bona fide written Acquisition
Proposal; or (d) recommending such an Acquisition Proposal to the shareholders
of the Company, if and only to the extent that (i) in each such case referred to
in clause (b), (c) or (d) above, the Company Board determines in good faith
after consultation with, and after receipt of a written opinion from, outside
legal counsel that such action is necessary in order for its directors to comply
with their fiduciary duties under applicable law and (ii) in each case referred
to in clause (c) or (d) above, the Company Board determines in good faith (after
consultation with its financial advisor) that such Acquisition Proposal, if
accepted, is reasonably likely to be consummated, and would, if consummated,
result in a transaction more favorable to the shareholders of the Company from a
financial point of view than the transaction contemplated by this Agreement.

The Company has also agreed that it will notify ING Groep N.V. immediately
if any such inquiries, proposals or offers are received by, any such information
is requested from, or any such discussions or negotiations are sought to be
initiated or continued with, any of its officers, directors or Representatives
indicating, in connection with such notice, the name of such person and the
material terms and conditions of any proposals or offers and thereafter shall
keep ING informed, on a current basis, on the status and terms of any such
proposals or offers and the status of any such negotiations or discussions.

The Company and ING Groep N.V. have agreed that, among other things, each
will supply accurate information in connection with the preparation of this
Prospectus/Proxy Statement and will otherwise cooperate with one another and
will use their respective best efforts to obtain all consents, registrations
approvals, permits and authorizations necessary or advisable to be obtained from
any third party and/or any Governmental Entity in order to consummate the Merger
and to make sure that the exchange of Shares for ADSs will not result in the
double payment of dividends by ING Groep N.V. and the Company and neither ING
Groep N.V. nor the Company will take or cause to be taken any action, whether
before or after the Effective Time, that would disqualify the Merger as a
"reorganization" for tax purposes. See "-- Conditions to Each Party's
Obligations" and "THE MERGER -- Certain Federal Income Tax Consequences of the
Merger".

In connection with certain registered investment companies established by
the Company and for which certain of its subsidiaries serve as investment
advisors registered under the Investment Company Act, the Company has agreed to
use its best efforts to solicit proxies from the holders of contracts issued by
such investment companies approving the transaction ("Investment Company
Approvals"). See "-- Conditions to Each Party's Obligations". The Company has
also agreed not to make any changes to employee benefits and salaries outside of
the ordinary course and to take certain measures in connection with the Merger
to insure that the Company's pension plan complies with laws applicable to its
investment portfolio.

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ING Groep N.V. has agreed to indemnify the Company Board and its officers
from liability arising from their service as such prior to the Merger and for
any liability which they may incur in connection with the Merger. See "THE
MERGER -- Interests of Certain Parties".

CONDITIONS TO EACH PARTY'S OBLIGATIONS

The obligations of the Company and ING Groep N.V. are conditioned on the
following:

(a) the approval of the Merger Agreement by the shareholders of the
Company in accordance with applicable law and the Company's articles of
incorporation and by-laws;

(b) the expiration or early termination of the waiting period
applicable to the consummation of the Merger under the HSR Act and, other
than the filing of the Articles of Merger in Iowa and the Delaware
Certificate of Merger, all notices and filings required to be made prior to
the Effective Time by the Company or ING Groep N.V. or any of their
respective subsidiaries with, and all consents, registrations, approvals,
permits and authorizations required to be obtained prior to the Effective
Time by the Company, ING Groep N.V. or any of their respective subsidiaries
from, any Governmental Entity (collectively, "Governmental Consents") in
connection with the execution and delivery of the Merger Agreement and the
consummation of the Merger and the other transactions contemplated thereby
by the Company, ING Groep N.V. and Merger Sub shall have been made or
obtained (as the case may be), upon terms and conditions that, and except
those that the failure to make or to obtain, are not, individually or in
the aggregate, reasonably likely to have a material adverse effect on the
Company or ING Groep N.V. or the ability of either to consummate the Merger
or to provide a basis to conclude that the parties hereto or any of their
affiliates or respective directors, officers, agents, advisors or other
representatives would be subject to the risk of criminal liability;

(c) no court or Governmental Entity of competent jurisdiction having
issued or enacted an Order, and no Governmental Entity or any other person
having instituted any proceeding or threatened to institute any proceeding
seeking any such Order;

(d) the Registration Statement, of which this Prospectus/Proxy
Statement is a part, having been declared effective, no stop order
suspending the effectiveness of the Registration Statement having been
issued, and no proceedings for that purpose having been initiated or
threatened, by the Commission;

(e) ING Groep N.V. having received all state securities and "blue sky"
permits and approvals necessary to consummate the transactions contemplated
by the Merger Agreement;

(f) the accuracy of the other's representations and warranties,
subject to certain additional materiality limitations, remaining true and
correct on the Closing Date and the receipt of certificates to such effect;

(g) the absence of breaches of the other's obligations under the
Merger Agreement, subject to certain limitations regarding materiality in
the case of breaches which are not knowing and wilful;

(h) the receipt by the other party of all material third party
consents (except for the Investment Company Approvals which the Company
must obtain as a condition to ING Groep N.V.'s obligation to close); and

(i) the receipt by each of certain opinions and accountants' letters,
including the opinion of respective tax counsel regarding the treatment of
the Merger as a "reorganization" under the Code.

In addition, ING Groep N.V.'s obligations under the Merger Agreement are
subject to the receipt of certain letters from persons who are affiliates of the
Company and the Company having amended its shareholder rights plan to terminate
immediately prior to the Effective Time. See "THE MERGER -- Resale of ADSs" and
"COMPARISON OF CERTAIN RIGHTS OF SHAREHOLDERS OF THE COMPANY AND HOLDERS OF
BEARER RECEIPTS OR ORDINARY SHARES OF ING -- Shareholder's Rights Agreement".

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The respective obligations of ING Groep N.V. and the Company to consummate
the Merger are also conditioned on, in the case of the Company, an Average
Closing Price of at least $40.2864 (subject to the right of ING Groep N.V. to
pay Stock Consideration worth $68) and, in the case of ING Groep N.V., an
Average Closing Price no higher than $54.5052 (subject to the Company's right to
accept Stock Consideration worth $68).

TERMINATION OF THE MERGER AGREEMENT

The Merger Agreement may be terminated at any time prior to the Effective
Time, whether before or after approval of the Merger Agreement by holders of
Shares: (i) by mutual consent of the Company and ING Groep N.V.; (ii) by the
Company or ING Groep N.V., if the Merger shall not have been consummated by
March 31, 1998 (provided that the terminating party is not otherwise in material
breach of its obligations under the Merger Agreement in any manner that shall
have proximately contributed to the occurrence of the failure of the Merger to
be consummated); (iii) by the Company or ING Groep N.V. if the Merger Agreement
shall not have been approved at the Special Meeting or any adjournment or
postponement thereof or if any Order shall become final and non-appealable; (iv)
by the Company or ING Groep N.V. if the Company enters into an agreement with
respect to a proposal determined to be more favorable to the Company by the
Company Board in good faith (subject, in the case of the Company, to there being
no breach by the Company of the provisions of the Merger Agreement relating to
competing proposals); (v) by the Company or ING Groep N.V. in the event of a
breach by the other party of any representation, warranty, covenant or agreement
which is not cured as provided in the Merger Agreement; (vi) by the Company if
the Average Closing Price is less than $40.2864 (subject to the right of ING
Groep N.V. to pay Stock Consideration worth $68); and (vii) by ING Groep N.V.,
if the Company Board withdraws or modifies its approval or recommendation of the
Merger Agreement or fails to reconfirm its recommendation within five business
days after a written request by ING Groep N.V. to do so, or if the Average
Closing Price is above $54.5052 (subject to the Company's right to accept the
Stock Consideration worth $68).

TERMINATION FEE

The Merger Agreement also provides that if the Merger Agreement is
terminated under the circumstances described in clause (iv) of the preceding
paragraph, or if the approval of shareholders is not obtained after the
occurrence of certain specified events, including, among other things, the
making of, or the public announcement of an intention to make, an offer to
purchase the Company by a third person, or if the Company breaches any of its
representations and warranties in the Merger Agreement, then the Company shall
pay ING Groep N.V. a fee equal to $65 million.

WAIVER AND AMENDMENT OF THE MERGER AGREEMENT

DESCRIPTION OF ORDINARY SHARES

Set forth below is a summary of certain information concerning ING Groep
N.V.'s Ordinary Shares, including summaries of certain provisions of the ING
Articles and applicable Netherlands law in effect on the date hereof. This
summary contains all material information concerning ING Groep N.V.'s Ordinary
Shares but does not purport to be complete. References to provisions of the ING
Articles are qualified in their entirety by reference to the full ING Articles,
an English translation of which has been incorporated by reference in the
Registration Statement of which this Prospectus/Proxy Statement is a part.

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GENERAL

The authorized share capital of ING Groep N.V. is currently divided into
1,500 million Ordinary Shares, with a nominal value of NLG 1.00 per Ordinary
Share, 100 million "A" Preference Shares with a nominal value of NLG 2.50 per
"A" Preference Share, 200 million "B" Preference Shares with a nominal value of
NLG 2.50 per "B" Preference Share and 900 million Cumulative Preference Shares
with a nominal value of NLG 2.50 per Cumulative Preference Share. The Ordinary
Shares, the "A" Preference Shares, the "B" Preference Shares and the Cumulative
Preference Shares are in registered form (the "A" Preference Shares and "B"
Preference Shares are collectively referred to herein as "Preference Shares").
The outstanding Ordinary Shares and "A" Preference Shares are fully paid and
nonassessable. Ordinary Shares and "A" and "B" Preference Shares (collectively,
"ING Shares") may only be issued or transferred to natural persons, and the
issuance or transfer of Ordinary Shares and Preference Shares is not permitted
if and to the extent that the acquiror or transferee alone or, pursuant to a
mutual cooperation arrangement, together with one or more natural or legal
persons, directly or (other than as a depositary receipt holder) indirectly (i)
holds a nominal amount of Ordinary Shares or Preference Shares equal to or
exceeding 1% of the total issued ordinary share capital or the total issued
preference share capital or (ii) would acquire by such a transfer more than 1%
of the total issued ordinary share capital or the total issued preference share
capital, respectively. The principal exception to this restriction is that the
Trust is not subject to such limitations on ownership of Ordinary Shares and
Preference Shares. In addition, there is no trading market in Ordinary Shares
except in the form of Bearer Receipts or ADSs. As a result, over 99% of the
outstanding Ordinary Shares are currently held by the Trust, which has issued
Bearer Receipts in exchange therefor. See "THE TRUST AND THE BEARER RECEIPTS".
At June 30, 1997, 822.4 million Ordinary Shares were issued and outstanding.

DIVIDENDS

Dividends, whether in cash or shares, may be payable out of the annual
profits of ING Groep N.V, as reflected in the annual accounts adopted by the
Supervisory Board and approved by the General Meeting. At its discretion, but
subject to statutory provisions, the Executive Board may, with the prior
approval of the Supervisory Board, distribute one or more interim dividends,
whether in cash or shares, on one or more classes of shares before the annual
accounts for any financial year have been adopted by the Supervisory Board and
approved by the General Meeting. The Executive Board, with the approval of the
Supervisory Board, may decide that all or part of ING Groep N.V.'s profits after
the distribution of dividends to the holders of Preference Shares should be
retained and not be made available for distribution to holders of Ordinary
Shares. Those profits that are not retained may be distributed to shareholders
pursuant to a resolution of the General Meeting, provided that the distribution
does not reduce shareholders' equity below the issued share capital increased by
the amount of reserves required by Netherlands law. The Executive Board
determines, with the approval of the Supervisory Board, whether the dividends on
Ordinary Shares are payable in cash, in shares, or at the option of the holders
of Ordinary Shares, in cash or in shares. Existing reserves that are
distributable in accordance with Netherlands law may be made available to the
General Meeting for distribution upon proposal by the Executive Board, subject
to prior approval by the Supervisory Board. See "DIVIDENDS" for additional
discussion of the dividend rights of holders of Ordinary Shares. The Executive
Board may also decide, with the approval of the Supervisory Board, to declare
dividends in the currency of a country other than the Netherlands in which the
Bearer Receipts are trading.

VOTING RIGHTS

GENERAL MEETINGS OF SHAREHOLDERS OF ING GROEP N.V.

General meetings of shareholders are held at least once a year, not later
than six months after the end of the fiscal year, in Amsterdam, The Hague,
Haarlemmermeer, Rotterdam or Utrecht, as determined by the Executive Board. The
holders of the Ordinary Shares and Bearer Receipts will be called to a general
meeting of shareholders by the publication of a notice convening a general
meeting in the official publication of the AEX Stock Exchange, in a newspaper
having nationwide circulation in the Netherlands,

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and abroad, in compliance with the applicable laws and regulations of each
country where the Ordinary Shares are admitted for official quotation. In order
to attend, to address and to vote at the general meeting of shareholders,
holders of Ordinary Shares must notify ING Groep N.V. in writing of their
intention to attend the meeting no later than the fourth AEX Stock Exchange day
before the day of the meeting. In order to attend and to address the general
meeting of shareholders, holders of Bearer Receipts must direct the deposit of
their Bearer Receipts no later than the second AEX Stock Exchange day before the
day of the meeting at a location specified by the Supervisory Board. ING Groep
N.V. does not solicit from or nominate proxies for its shareholders and is
exempt from the Commission's proxy rules under the Exchange Act. However,
shareholders and other persons entitled to attend general meetings of
shareholders may be represented by proxies with written authority. See "THE
TRUST AND THE BEARER RECEIPTS -- Voting of the Ordinary Shares".

Resolutions are adopted at general meetings of shareholders by an absolute
majority of the votes cast (except where a larger majority of votes is required
by the ING Articles or Netherlands law) and there are generally no quorum
requirements applicable to such meetings, except as set forth in the following
paragraph. Each Ordinary Share presently carries one vote. Each Preference Share
and each Cumulative Preference Share carries 2.5 votes.

AMENDMENT OF ING ARTICLES AND WINDING UP OF ING GROEP N.V.

Resolutions to amend the ING Articles or to dissolve ING Groep N.V. may
only be adopted upon a proposal by the Executive Board that is approved by the
Supervisory Board. Such resolution must generally be approved by at least
two-thirds of the votes cast at a general meeting of shareholders at which at
least two-thirds of the issued share capital is represented.

ADOPTION OF ANNUAL ACCOUNTS

As provided by Netherlands law and by the ING Articles, the Executive Board
submits ING Groep N.V.'s annual Netherlands statutory accounts, together with a
certificate of the auditor in respect thereof, to the Supervisory Board for
adoption. Upon such adoption, these accounts are submitted to the General
Meeting for approval. As provided by the ING Articles, the approval of ING Groep
N.V.'s annual accounts by the General Meeting discharges members of the
Executive Board and the Supervisory Board from liability for the performance of
their respective duties for the past financial year. Under Netherlands law this
discharge is not absolute and will not be effective as to matters not disclosed
to the shareholders.

LIQUIDATION RIGHTS

In the event of the dissolution and liquidation of ING Groep N.V., the
assets remaining after payment of all debts and liquidation expenses are first
to be distributed to the holders of Cumulative Preference Shares to the extent
of the nominal amount paid up on the Cumulative Preference Shares plus accrued
dividends. Then the "A" Preference shareholders are entitled to receive NLG 7.50
plus accrued dividends per share, and the "B" Preference shareholders are
entitled to receive the amount for which the "B" Preference Shares were
subscribed plus accrued dividends. Any remainder will be distributed to holders
of the Ordinary Shares.

ACQUISITION AND CANCELLATION OF ORDINARY SHARES

ING Groep N.V. and its subsidiaries may acquire Ordinary Shares and/or
Bearer Receipts, subject to compliance with certain Netherlands law requirements
(including that the aggregate nominal value of all ING Shares and/or Bearer
Receipts held by ING Groep N.V. and its subsidiaries at any one time amounts to
no more than 10% of ING Groep N.V.'s issued share capital). ING Shares owned by
ING Groep N.V. and its subsidiaries may not be voted or counted for quorum
purposes. Any such acquisitions are subject to the decision of the Executive
Board, the approval of the Supervisory Board and the authorization of
shareholders at the general meeting of shareholders of ING Groep N.V. Shares
and/or Bearer Receipts held by ING Groep N.V. may be resold.

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The General Meeting has the power to decide to cancel Ordinary Shares
acquired by ING Groep N.V. Any such proposal is subject to general requirements
of Netherlands law with respect to reduction of capital.

In addition, the General Meeting has the power to cancel one or more
classes (or series within those classes) of Preference Shares. Furthermore, the
General Meeting may decide to reduce the nominal amount of any or all classes
(or series within those classes) of ING Shares. Any such proposal is subject to
general requirements of Netherlands law with respect to reduction of capital as
well as the relevant provisions of the ING Articles.

LIMITATIONS ON RIGHT TO HOLD OR VOTE THE ORDINARY SHARES

There are no limitations imposed by Netherlands law or by the ING Articles
on the right of non-resident owners to hold or vote the ING Shares solely by
reason of such non-residence.

DESCRIPTION OF PREFERENCE SHARES

Of the authorized 100 million "A" Preference Shares, 87,080,450 were issued
and outstanding as of June 30, 1997, of which 4,413,203 were held by ING
companies. None of the 200 million authorized "B" Preference Shares has been
issued. The "B" Preference Shares are subdivided into five series of 5 million,
5 million, 40 million, 75 million and 75 million shares. Preference Shares may
be issued only if at least the nominal amount of such Preference Shares is paid.
Each Preference Share carries 2.5 votes.

Preference Shares rank before Ordinary Shares in entitlements to dividends
and distributions upon dissolution and liquidation of ING Groep N.V., but are
subordinated to the Cumulative Preference Shares. See "DESCRIPTION OF CUMULATIVE
PREFERENCE SHARES". Holders of "A" and "B" Preference Shares rank pari passu
among themselves. If the profit or amount available for distribution to the
holders of Preference Shares is not sufficient to make such distribution in
full, such holders will receive a distribution in proportion to the amount they
would have received if such distribution had been made in full. The Preference
Shares are not cumulative and the holders thereof will not be compensated in
subsequent years for a shortfall in a prior year.

The dividend to be paid on the "A" Preference Shares is based on a
percentage, calculated by taking the arithmetic mean of the average effective
yield on the five longest-dated Dutch government bonds outstanding at such time
and multiplying such percentage by NLG 7.50. The Executive Board may decide,
with the approval of the Supervisory Board, to increase or decrease this yield
thus calculated by not more than half a percentage point ( 1/2%) depending on
the then prevailing market conditions. Such dividend percentage will be
readjusted on January 1, 2004, and thereafter every ten years. Until January 1,
2004, the dividend on the "A" Preference Shares is NLG 0.53 per year.

The dividend to be paid on each series of the "B" Preference Shares will be
based on a percentage related to the average effective yield on the government
bonds outstanding at such time with a maturity of six to seven years and
multiplying such percentage by the amount for which the first "B" Preference
Shares of the series were subscribed. The Executive Board may decide with the
approval of the Supervisory Board to increase or decrease the yield thus
calculated by not more than one percentage point (1%) depending on the then
prevailing market conditions. Such percentage will be adjusted every seven years
in such fashion.

"A" Preference Shares may be cancelled only if a distribution of NLG 5.00
can be made on each such share in addition to the repayment of the nominal
amount of NLG 2.50. Upon dissolution and liquidation of ING Groep N.V., a
distribution of NLG 7.50 will, as far as possible, be made on each "A"
Preference Share. "B" Preference Shares may be cancelled only if, in addition to
repayment of the nominal value of NLG 2.50, a distribution is made equal to the
amount (including share premiums) for which the first "B" Preference Shares of
the relevant series were subscribed, less NLG 2.50. Upon dissolution and
liquidation of ING Groep N.V., a distribution in the amount (including share
premium) for which the first "B" Preference Shares were subscribed will, as far
as possible, be made on each "B"

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Preference Share. See "DESCRIPTION OF ORDINARY SHARES -- Liquidation Rights and
Acquisition and Cancellation of Shares".

If the profit or the amount available for distribution to the holders of
Preference Shares upon dissolution and liquidation of ING Groep N.V. is not
sufficient to make this distribution in full, such holders will receive a
distribution in proportion to the amount they would have received if such
distribution could have been made in full.

If Preference Shares have been cancelled by repayment in a financial year
for which profit has been determined, the persons who held the shares prior to
cancellation are entitled to a pro rata share of the distribution for that year.
If Preference Shares are issued in the course of the financial year, the
dividend for that year will be reduced pro rata. See "DESCRIPTION OF ORDINARY
SHARES -- Voting Rights".

DESCRIPTION OF CUMULATIVE PREFERENCE SHARES

ING Groep N.V. has authorized 900 million Cumulative Preference Shares,
nominal value NLG 2.50 per Cumulative Preference Share. Cumulative Preference
Shares may be issued only if at least one-fourth of the nominal amount thereof
is paid up. As of June 30, 1997, no Cumulative Preference Shares had been
issued. The Cumulative Preference Shares rank before the Preference Shares and
the Ordinary Shares in entitlements to dividends and distributions upon
dissolution and liquidation. Each Cumulative Preference Share carries 2.5 votes.

Dividends on Cumulative Preference Shares will be calculated based on a
percentage equal to the average of the special advance rate of the Dutch Central
Bank, weighted on the basis of the number of days for which it applied during
the financial year in which the distribution is made, plus two and a half
percentage points and the average interest surcharge as applied by the three
largest lending institutions in the Netherlands (excluding lending groups that
are part of ING), calculated on the amount compulsorily paid up or yet to be
paid up.

If profits for a financial year are not sufficient to make distributions in
full to holders of Cumulative Preference Shares, the shortfall will be made up
from the Company's reserves, provided that the distribution does not reduce
shareholders' equity below the issued share capital plus the amount of reserves
required by Netherlands law. If the distribution cannot be made from the
reserves, the profits achieved in subsequent years will be used to make up the
shortfall in full before any distribution is made on the Preference Shares or on
the Ordinary Shares.

If Cumulative Preference Shares have been cancelled by repayment in a
financial year for which profit has been determined, the persons who held the
shares prior to cancellation are entitled to a pro rata share of the
distribution. If Cumulative Preference Shares are issued in the course of the
financial year, the dividend for that year will be reduced pro rata. Upon
cancellation of Cumulative Preference Shares and upon dissolution and
liquidation of ING Groep N.V., the amount paid up on the Cumulative Preference
Shares will be repaid together with the dividend shortfall of preceding years,
insofar as this shortfall has not yet been made up.

If Cumulative Preference Shares are to be issued or rights to subscribe for
Cumulative Preference Shares are to be granted other than by resolution of the
General Meeting, prior approval of the General Meeting is required if the
issuance of shares or the granting of rights to subscribe for such shares would
cause the number of outstanding Cumulative Preference Shares to exceed half of
the total issued and outstanding Ordinary and Preference Shares. If Cumulative
Preference Shares are to be issued or rights to subscribe for Cumulative
Preference Shares are to be granted and such prior approval is not required, the
Executive Board must hold a general meeting of shareholders within four weeks
after the issuance of such Cumulative Preference Shares or the grant of rights
to subscribe for such Cumulative Preference Shares to explain the reasons for
the issuance.

Resolutions on actions affecting holders of Cumulative Preference Shares
may be passed at a meeting of holders of Cumulative Preference Shares if the
total number of issued Cumulative Preference

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Shares are represented and the resolutions are passed unanimously, even if the
provisions regarding the calling and holding of such meeting have not been
observed. Resolutions of holders of Cumulative Preference Shares may also be
passed by unanimous written consent. See "DESCRIPTION OF ORDINARY
SHARES -- Voting Rights".

ING Groep N.V. has a call option agreement with the Stichting Cumulatief
Preferente Aandelen ING Groep (the "Cumulative Preference Shares Trust"), which
gives the Cumulative Preference Share Trust the right to acquire up to a maximum
of 900 million Cumulative Preference Shares. This right is subject to the
condition that no more than one-third of the total issued share capital,
including Cumulative Preference Shares, of ING Groep N.V. consists of Cumulative
Preference Shares at any given time. The Cumulative Preference Share Trust has
entered into funding arrangements with third parties to fund the call option.

DESCRIPTION OF WARRANTS

In 1991, ING Groep N.V. authorized the issuance of 261,070,062 Warrants, of
which 107,619,975 were issued and outstanding as of June 30, 1997. A total of
339,180 of these were held by ING companies.

At the exercise price of NLG 27.20 per Bearer Receipt, Warrant holders are
entitled to exchange their Warrants for Bearer Receipts for Ordinary Shares, at
the rate of 5 Bearer Receipts for 14 Warrants.

The exercise price of the Warrants will be adjusted by ING Groep N.V. under
the following circumstances: (i) if ING Groep N.V. issues Ordinary Shares with
pre-emptive rights for existing holders thereof against an issue price which is
below the then applicable exercise price; (ii) if ING Groep N.V. issues Ordinary
Shares to existing holders thereof, such shares being paid from a reserve of the
Company at a price which is below the then applicable exercise price; (iii) if
ING Groep N.V. issues Ordinary Shares to existing holders thereof by way of
dividend at a price which is below the then applicable exercise price; (iv) if
ING Groep N.V. grants existing holders of Ordinary Shares pre-emptive rights to
obtain securities other than Ordinary Shares; (v) if any company grants existing
holders of Ordinary Shares a right to subscribe for securities which may be
converted into or exchanged for Ordinary Shares, provided that the price for
which such Ordinary Shares of ING Groep N.V. may (initially) be obtained is
lower than the then applicable exercise price; or (vi) if ING Groep N.V. makes a
distribution in cash out of its share premium reserve(s) to holders of Ordinary
Shares.

The exercise price will not be adjusted in the event of a merger, the
restructuring of the share capital or the transfer of all or a substantial part
of the assets of ING. Upon such an event, Warrant holders will be entitled to
receive the number and kind of securities to which holders of a corresponding
number of Ordinary Shares equal to that which would have been issued had the
Warrants been previously exercised would have been entitled.

In the event of a split or consolidation of shares, Warrant holders remain
entitled to the number of shares the aggregate nominal value of which is equal
to the aggregate nominal value of the shares to which they were entitled
immediately prior to the split or consolidation.

DESCRIPTION OF OPTION RIGHTS

As from 1994 a number of senior executives (members of the Executive Board,
the Executive Committees, the ING Group Management Council and other key persons
approved by the Executive Board) have been granted option rights to purchase
Bearer Receipts. Each such right lasts for five years, calculated from the date
on which the right is granted and the exercise price is established. Option
rights not exercised during this period will lapse.

As from 1997, the scope of the option plan has been extended to all
employees of ING in the Netherlands and to a substantial number of employees
outside of the Netherlands. Each year the Executive Board will determine whether
and to what extent the option plan will be continued. Option rights granted and
acquired remain valid after the plan's termination (subject to the limit of five
years

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mentioned above). The following table sets forth, by year of issuance, the
number of outstanding and exercisable options and their exercise price.

NUMBER OF OUTSTANDING AND
EXERCISABLE OPTIONS
AS OF APRIL 30, 1997 EXERCISE PRICE IN NLG ISSUE YEAR
------------------------- --------------------- ----------

8,418 25.53 1994
86,529 26.36 1994
188,360 28.27 1995
197,641 29.10 1995
2,450 43.52 1996
880,000 51.80 1996

See Notes 6.2.3 and 8.25 of Notes to the Consolidated Financial Statements.

ING decided in early 1997 to establish option plans for all its employees
(including those outside the Netherlands) and authorized the issue of up to 12
million options, each representing the right to acquire one Ordinary
Share/Bearer Receipt of ING Groep N.V. 1,691,400 options were issued under these
plans on March 14, 1997, to certain employees working for the CIB management
centre outside the Netherlands. These options bear an exercise price of NLG
76.40 and are exercisable during the period between March 14, 2000, and March
14, 2002. The number and exercise price of the options granted to certain of the
Company's other employees was determined on May 28, 1997. These options are
exercisable between May 28, 1997 (for the Netherlands employees)/May 28, 2000
(for the employees outside the Netherlands) and May 28, 2002, and are included
in the total number of authorized options (12 million) mentioned above. These
options bear an exercise price of NLG 85.10 and 3,173,000 options were issued at
May 20, 1997. As of September 1, 1997, 3,080,000 of such options were
outstanding.

THE TRUST AND THE BEARER RECEIPTS

The following is a description of the material provisions of the Trust
Agreement and the applicable provisions of Netherlands law. This description
does not purport to be complete and is qualified in its entirety by reference to
the Trust Agreement and the applicable provisions of Netherlands law referred to
in such description. The Trust Agreement, together with English translations
thereof, are incorporated by reference in the Registration Statement of which
this Prospectus/Proxy Statement forms a part.

Bearer Receipts, which are negotiable instruments under Netherlands law,
are issuable by the Trust pursuant to the terms of the Trust Agreement. Each
Bearer Receipt represents financial interests in one Ordinary Share held by the
Trust, as described herein. As described under "--Voting of the Ordinary
Shares", holders of Bearer Receipts (including those for which ADSs have been
issued) are not entitled to exercise any voting rights with respect to the
Ordinary Shares underlying the Bearer Receipts owned by the Trust. Such rights
are exercisable only by the Trust pursuant to the terms of the Trust Agreement.
Bearer depositary receipts are also issued by the Trust for Preference Shares.

The Bearer Receipts are in the form of bearer "Centrum voor
Fondsenadministratie" certificates ("CF Certificates"), with a dividend sheet
without coupons or talons. The Centrum voor Fondsenadministratie provides
central administration for the dividend sheets of the CF Certificates. The
dividend sheets of CF Certificates, which do not trade separately from the CF
Certificates, must be held by an eligible custodian. Transfer of title in the
Bearer Receipts in the form of CF Certificates together with the dividend sheet
is effected by book-entry through the facilities of NECIGEF--(the Netherlands
Central Institute for Securities Book-Entry Transactions) and its participants
pursuant to the Netherlands Act on book-entry transactions ("Wet giraal
effectenverkeer"). Owners of Bearer Receipts participate in the NECIGEF system
by maintaining accounts with NECIGEF participants. There is no limitation under
Netherlands law on the ability of non-Dutch citizens or residents to maintain
such accounts which are obtainable through Dutch banks.

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DIVIDENDS, OTHER DISTRIBUTIONS AND RIGHTS

Holders of Bearer Receipts are entitled to receive the economic benefits
corresponding to the Ordinary Shares underlying such Bearer Receipts within one
week of the time when the Trust receives the corresponding dividends or other
distributions to shareholders, and to receive the underlying Ordinary Shares at
any time subject to the restrictions on ownership described herein and upon
termination of the Trust Agreement. See "--Termination of the Trust". The Trust
will distribute cash dividends and other cash distributions received by it in
respect of the Ordinary Shares held in the Trust to the holders of the Bearer
Receipts in proportion to their respective holdings, in each case in the same
currency in which they were received. Cash dividends and other cash
distributions in respect of Bearer Receipts for which ADSs have been issued will
be distributed in U.S. dollars in accordance with the Deposit Agreement.

If ING Groep N.V. declares a dividend in, or free distribution of, Ordinary
Shares or Preference Shares, such Ordinary Shares or Preference Shares will be
held by the Trust, and the Trust will distribute to the holders of the
outstanding Bearer Receipts, in proportion to their holdings, additional Bearer
Receipts issued for the Ordinary Shares or Preference Shares received by the
Trust as such dividend or distribution. In the event the Trust receives any
distribution with respect to Ordinary Shares held by the Trust other than in the
form of cash or additional ING Shares, the Trust will adopt such method as it
may deem legal, equitable and practicable to effect such distribution.

If ING Groep N.V. offers or causes to be offered to the holders of Ordinary
Shares any rights to subscribe for additional ING Shares or any rights of any
other nature, the Trust, subject to applicable law, will offer to each holder of
Bearer Receipts the right to instruct the Trust to subscribe for such holder's
proportionate share of such additional ING Shares, subject to such holder
providing the Trust with the funds necessary to subscribe for such additional
ING Shares. If such an offer is made and if a holder of Bearer Receipts provides
the Trust with the necessary funds, the Trust will subscribe for the
corresponding number of ING Shares, which will be placed in the Trust, and
deliver additional Bearer Receipts in respect of such ING Shares, to each such
holder of Bearer Receipts or adopt such method as it may deem equitable and
practicable to permit such subscription. The Trust will offer such rights to a
holder of Bearer Receipts only if such offer is legal and valid under the
provisions of the laws of the country of residence of such holder of Bearer
Receipts.

If the Trust has the option to receive such distribution either in cash or
ING Shares, the Trust will give notice of such option by advertisement and give
holders of Bearer Receipts the opportunity to choose between cash and ING Shares
until the fourth day before the day on which the Trust must have made such
choice. Holders of Bearer Receipts may receive an equal nominal amount in
Ordinary Shares, provided that they are natural persons and they do not hold
more than 1% of the issued share capital of ING Groep N.V. in the form of
Ordinary Shares. See "COMPARISON OF CERTAIN RIGHTS OF SHAREHOLDERS OF THE
COMPANY AND HOLDERS OF BEARER RECEIPTS OR ORDINARY SHARES OF ING GROEP
N.V. -- Transfer Restrictions".

VOTING OF THE ORDINARY SHARES

Holders of Bearer Receipts are not entitled to give binding instructions to
the Trust concerning the Trust's exercise of the voting rights attached to the
Ordinary Shares, although, whenever the Trust deems necessary or desirable, the
Trust may consult holders of Bearer Receipts to the degree and subject to such
terms and conditions it considers appropriate. Holders of Bearer Receipts are
entitled to attend and speak at general meetings of shareholders of ING Groep
N.V. The Trust, however, is required to make use of the voting rights attached
to the Ordinary Shares in such a manner that (i) the interests of ING Groep N.V.
and of the enterprises sustained by ING Groep N.V. and the companies affiliated
as a group with ING Groep N.V. are served; (ii) the interests of ING Groep N.V.
and of those enterprises and all parties concerned are safeguarded as well as
possible; and (iii) influences which could violate the independence, the
continuity or the identity of ING Groep N.V. and those enterprises contrary to
the aforementioned interests are barred to the greatest extent possible. The
Trust reserves the right to decide its vote without consulting the holders of
Bearer Receipts.

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ADMINISTRATION OF THE TRUST

Pursuant to the terms of its Articles of Association, the Trust is
administered by a Management Board (the "Management Board"), which consists of
seven members. Two members of the Management Board (each a "Managing
Director-A") are appointed by the ING Groep N.V.'s Supervisory Board from among
its members. The other five members of the Management Board (each a "Managing
Director-B", and together with Managing Directors-A, the "Managing Directors")
are appointed by the Management Board itself, subject to the approval of the
Executive Board of ING Groep N.V. Managing Directors are appointed for terms of
three years.

Valid resolutions may be passed only if at least one Managing Director-B is
present or represented and all Managing Directors have been duly notified,
except that in a case where there is no such notification valid resolutions may
nevertheless be passed by unanimous consent at a meeting at which all Managing
Directors are present or represented. A Managing Director may be represented
only by a fellow Managing Director who is authorized in writing. All resolutions
of the Management Board shall be passed by an absolute majority of the votes.

The legal relationship between holders of Bearer Receipts and the Trust is
governed entirely by Netherlands law.

TERMINATION OF THE TRUST

Should the Trust be dissolved or wish to terminate its function under the
Trust Agreement, or should ING Groep N.V. wish to have such function terminated,
ING Groep N.V. shall, in consultation with the Trustee and with the approval of
the meeting of holders of Bearer Receipts, appoint a successor to whom the
administration can be transferred. The successor shall have to take over all
commitments under the Trust Agreement. Within two months of the decision to
dissolve or terminate the Trust, the Trust shall have the shares which it holds
for administration transferred into its successor's name. Upon surrender of the
Bearer Receipts, the successor shall issue to holders of Bearer Receipts new or
altered Bearer Receipts which shall be signed by the successor. In no case shall
the administration be terminated without ING Groep N.V.'s approval.

DESCRIPTION OF AMERICAN DEPOSITARY SHARES

The following is a summary of the material provisions of the Amended and
Restated Deposit Agreement, dated as of June 2, 1997, pursuant to which ADSs are
issued (the "Deposit Agreement") among ING Groep N.V., Morgan Guaranty Trust
Company of New York, as depositary (the "Depositary"), and the holders from time
to time of ADSs. Such summary does not purport to be complete and is qualified
in its entirety by reference to the Deposit Agreement, which has been
incorporated by reference in the Registration Statement of which this
Prospectus/Proxy Statement is a part. Additional copies of the Deposit Agreement
are available for inspection at the offices of the Depositary in New York, which
is presently located at 60 Wall Street, New York, New York 10260 and at the
office of the agents of the Depositary (the "Custodians", and each reference
herein to "Custodian" shall be deemed to be a reference to any Custodian, each
Custodian, the applicable Custodian or all Custodians collectively, as the
context requires) currently located at ING Bank N.V., Strawinskylaan 2631, 1077
ZZ Amsterdam, P.O. Box 810, 1000 AV Amsterdam, the Netherlands. The Depositary's
principal executive office is located at 60 Wall Street, New York, New York
10260.

AMERICAN DEPOSITARY RECEIPTS

ADRs evidencing ADSs are issuable by the Depositary pursuant to the Deposit
Agreement. Each ADS will represent one Bearer Receipt for an Ordinary Share or
evidence the right to receive one Bearer Receipt (together with any additional
Bearer Receipts at any time deposited or deemed deposited under the Deposit
Agreement, and any and all other securities, cash and property received by the
Depositary or the Custodian, in respect thereof and at such time held under the
Deposit Agreement, "Deposited Securities"). Only persons in whose names ADRs are
registered on the books of the Depositary will be treated by the Depositary and
ING as holders ("Holders") of ADRs.

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Pursuant to the terms of the Deposit Agreement, Holders, owners and
beneficial owners of ADRs will be subject to any applicable disclosure
requirements regarding acquisition and ownership of Ordinary Shares or Bearer
Receipts as are applicable pursuant to the terms of the Articles of Association
of ING Groep N.V. or Netherlands law, as each may be amended from time to time.
See "EXCHANGE CONTROLS AND OTHER LIMITATIONS ON HOLDERS OF BEARER DEPOSITARY
RECEIPTS -- Obligations of Shareholders to Disclose Holdings" for a description
of such disclosure requirements applicable to Ordinary Shares and the
consequences of non-compliance as of the date of this Prospectus/Proxy
Statement. The Depositary has agreed, subject to the terms and conditions of the
Deposit Agreement, to use its reasonable efforts to comply with all of the
obligations of the Holders set forth in the Deposit Agreement.

DEPOSIT, TRANSFER AND WITHDRAWAL

The Depositary has agreed, subject to the terms and conditions of the
Deposit Agreement, that upon delivery to the Custodian of Bearer Receipts (or
evidence of rights to receive Bearer Receipts) and pursuant to appropriate
instruments of transfer in a form satisfactory to the Custodian, the Depositary
will, upon payment of the fees, charges and taxes provided in the Deposit
Agreement, execute and deliver at its office to, or upon the written order of,
the person or persons named in the notice of the Custodian delivered to the
Depositary or requested by the person or persons who delivered such Bearer
Receipts to the Custodian for deposit with the Depositary, an ADR or ADRs
registered in the name or names of such person or persons and evidencing the
number of ADSs to which such person or persons are entitled.

Upon surrender at the office of the Depositary of an ADR for the purpose of
withdrawal of the Deposited Securities represented by the ADSs evidenced by such
ADR, and upon payment of the fees, governmental charges and taxes provided in
the Deposit Agreement, and subject to the terms and conditions of the Deposit
Agreement, the ING Articles and the Deposited Securities, the Holder of such ADR
will be entitled to delivery without unreasonable delay to such Holder or upon
such Holder's order, as permitted by applicable law, of the amount of Deposited
Securities at the time represented by the ADS evidenced by such ADR. The
Custodian shall ordinarily deliver such Deposited Securities at its office; the
forwarding for delivery at the office of the Depositary or at any other place
specified by the Holder of cash, other property and documents of title for such
delivery will be at the risk and expense of the Holder.

The Depositary may issue ADRs against rights to receive Bearer Receipts
from ING, or any registrar, transfer agent, clearing agency or the entity
recording Bearer Receipt ownership or transactions. The Depositary may issue
ADRs against other rights to receive Bearer Receipts (until such Bearer Receipts
are actually deposited, "pre-released ADRs") only if (x) such pre-released ADRs
are fully collateralized (marked to market daily) with cash or U.S. government
securities held by the Depositary for the benefit of Holders (but such
collateral shall not constitute Deposited Securities), (y) each recipient of
such pre-released ADRs represents and agrees in writing with the Depositary that
such recipient or its customer (i) beneficially owns such Bearer Receipts, (ii)
assigns all beneficial right, title and interest therein to the Depositary for
the benefit of the Holders, (iii) holds such Bearer Receipts for the account of
the Depositary and (iv) will deliver such Bearer Receipts to the Custodian as
soon as practicable and promptly upon demand therefor but in no event more than
five days after demand therefor and (z) all pre-released ADRs evidence not more
than 20% of all ADSs (excluding those evidenced by pre-released ADRs). Such
collateral, but not the earnings thereon, shall be held for the benefit of the
Holders. The Depositary may retain for its own account any compensation for the
issuance of ADRs against such other rights to receive Bearer Receipts,
including, without limitation, earnings on the collateral securing such rights.

DIVIDENDS, OTHER DISTRIBUTIONS AND RIGHTS

Subject to any restrictions imposed by applicable law, regulations or
applicable permits, the Depositary is required to convert or cause to be
converted into U.S. dollars, to the extent it can do so on a reasonable basis,
and can transfer the resulting U.S. dollars to the United States, all cash
dividends and

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other cash distributions denominated in a currency other than U.S. dollars,
including Dutch guilders, that it receives in respect of the Deposited
Securities and to distribute the resulting dollar amount (net of reasonable and
customary expenses incurred by the Depositary in converting such foreign
currency and any amount on account of taxes to be withheld by ING or the
Depositary) to the Holders entitled thereto, in proportion to the number of ADSs
representing such Deposited Securities evidenced by ADRs held by them,
respectively. Such distribution may be made upon an averaged or other
practicable basis without regard to any distinctions among Holders on account of
exchange restrictions or the date of delivery of any ADR or ADRs or otherwise.
See "TAXATION -- Netherlands Taxation". If any foreign currency received by the
Depositary cannot be so converted and transferred, or if any approval or license
of any government or agency thereof which is required for such conversion is
denied or in the opinion of the Depositary cannot be obtained at a reasonable
cost or within a reasonable time, the Depositary shall in its discretion either
distribute such foreign currency to each Holder or hold such foreign currency
not so distributed uninvested and without liability for interest thereon for the
respective accounts of the Holders entitled to receive the same. If any such
conversion of foreign currency, in whole or in part, can be effected for
distribution to some of the Holders entitled thereto, the Depositary may in its
discretion make such conversion and distribution in U.S. dollars to the extent
permissible to the Holders entitled thereto, distribute foreign currency
received by it to each Holder requesting such distribution entitled thereto or
hold the balance uninvested for the respective accounts of the Holders entitled
thereto.

If ING Groep N.V. declares a dividend in, or free distribution of, Ordinary
Shares which are evidenced by Bearer Receipts, the Depositary may with ING Groep
N.V.'s approval, which approval shall not be unreasonably withheld, and shall if
ING so requests, distribute to the Holders of outstanding ADRs entitled thereto,
in proportion to the number of ADSs representing such Deposited Securities held
by them, respectively, additional ADRs evidencing an aggregate number of ADSs
that represents the amount of Ordinary Shares evidenced by Bearer Receipts
received as such dividend or free distribution, subject to the terms and
conditions of the Deposit Agreement with respect to the deposit of Bearer
Receipts and the issuance of ADSs evidenced by ADRs, including the withholding
of any tax or other governmental charge and the payment of fees of the
Depositary. In lieu of delivering ADRs for fractional ADSs in the event of any
such dividend or free distribution, the Depositary shall sell the amount of
Bearer Receipts represented by the aggregate of such fractions and distribute
the net proceeds as in the case of a distribution received in cash. If
additional ADRs are not so distributed, each ADS shall thenceforth also
represent its proportionate interest in the additional Bearer Receipts
distributed upon the Deposited Securities represented thereby.

If ING Groep N.V. offers or causes to be offered to the Holders of any
Deposited Securities any rights to subscribe for additional Bearer Receipts or
any rights of any other nature, the Depositary will have discretion as to the
procedure to be followed in making such rights available to any Holders of ADRs
or in disposing of such rights for the benefit of any Holders and making the net
proceeds available to such Holders in accordance with the Deposit Agreement or,
if by the terms of such rights offering or for any other reason, the Depositary
may not either make such rights available to any Holders or dispose of such
rights and make the net proceeds available to such Holders, then the Depositary
shall allow the rights to lapse; provided, however, that if at the time of the
offering of any rights the Depositary determines that it is lawful and feasible
to make such rights available to all Holders or to certain Holders but not to
other Holders, the Depositary may, and at the request of ING Groep N.V. will,
distribute to any Holder to whom it determines the distribution to be lawful and
feasible, in proportion to the number of ADSs held by such Holder, warrants or
other instruments therefor in such form as it deems appropriate. If the
Depositary determines that it is neither lawful nor feasible to make such rights
available to all or certain Holders, or if the rights represented by such
warrants or other instruments are not exercised and appear to be about to lapse,
it may, and at the request of ING Groep N.V. will, sell the rights, warrants or
other instruments in proportion to the number of ADSs held by the Holders to
whom it has determined it may not lawfully or feasibly make such rights
available, allocate the proceeds of such sales for the accounts of, and
distribute the net proceeds so allocated to, any Holders otherwise entitled to
such rights, warrants or other instruments, upon an averaged or other
practicable basis without regard to any distinctions among such Holders because
of exchange restrictions or the date of delivery of any ADR or ADRs, or
otherwise.

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The Depositary will not offer rights to Holders having an address in the
United States unless both the rights and the securities to which such rights
relate are either exempt from registration under the Securities Act with respect
to a distribution to all Holders or are registered under the provisions of such
Act. Notwithstanding any terms of the Deposit Agreement to the contrary, ING
Groep N.V. shall have no obligation to prepare and file a registration statement
in respect of any such rights.

Whenever the Depositary shall receive any distribution other than cash,
Bearer Receipts or rights in respect of the Deposited Securities, the Depositary
shall, with the consent of ING Groep N.V. (which consent shall not be
unreasonably withheld), cause the securities or property received by it to be
distributed to the Holders entitled thereto in proportion to their holdings,
respectively, in any manner that the Depositary may reasonably deem equitable
and practicable for accomplishing such distribution; provided, however, that if
in the opinion of the Depositary such distribution cannot be made
proportionately among the Holders entitled thereto, or if for any other reason
(including any requirement that ING Groep N.V. or the Depositary withhold an
amount on account of taxes or other governmental charges or that such securities
must be registered under the Securities Act in order to be distributed) the
Depositary deems such distribution not to be feasible, the Depositary may adopt
such method as it may deem equitable and practicable for the purpose of
effecting such distribution, including the sale (at public or private sale) of
the securities or property thus received, or any part thereof, and the net
proceeds of any such sale will be distributed by the Depositary to the Holders
entitled thereto as provided for in the Deposit Agreement in the case of a
distribution received in cash. The Holders alone shall be responsible for the
payment of any taxes or other governmental charges due as a result of such sales
or transfers.

If the Depositary determines that any distribution of property other than
cash (including Bearer Receipts and rights to subscribe therefor) is subject to
any tax which the Depositary is obligated to withhold, the Depositary may
dispose of all or a portion of such property in such amounts and in such manner
as the Depositary deems necessary and practicable to pay such taxes or charges,
by public or private sale, and the Depositary will distribute the net proceeds
of any such sale after deduction of such taxes to the Holders entitled thereto
in proportion to the number of ADRs held by them, respectively.

Upon any change in nominal or par value, split-up, consolidation,
cancellation or any other reclassification of Deposited Securities, or upon any
recapitalization, reorganization, merger or consolidation or sale of assets
affecting ING Groep N.V. or to which it is a party, any securities that shall be
received by the Depositary replacement or otherwise, in exchange for, in
conversion or replacement of, or otherwise in respect of, Deposited Securities
will be treated as new Deposited Securities under the Deposit Agreement, and the
ADRs shall thenceforth represent, in addition to the existing Deposited
Securities, the right to receive the new Deposited Securities so received in
exchange, conversion, replacement or otherwise, unless additional ADRs are
delivered pursuant to the following sentence. In any such case the Depositary
may with ING Groep N.V.'s approval, and will if ING Groep N.V. so requests,
execute and deliver additional ADRs as in the case of a distribution in Bearer
Receipts, or call for the surrender of outstanding ADRs to be exchanged for new
ADRs specifically describing such new Deposited Securities.

RECORD DATES

Whenever any cash dividend or other cash distribution becomes payable or
any distribution other than cash is made on or whenever rights shall be issued
with respect to any Deposited Securities, or whenever there is any meeting of
Holders of Bearer Receipts or other Deposited Securities, or whenever the
Depositary shall find it necessary or convenient, the Depositary will fix a
record date (which shall be as near as practicable to any corresponding record
date set by ING Groep N.V. with respect to the Bearer Receipts), for the
determination of the Holders who shall be entitled to (i) receive such dividend,
distribution or rights, or the net proceeds of the sale thereof, or (ii) give
instructions for the exercise of voting rights at any such meeting, all subject
to the provisions of the Deposit Agreement.

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VOTING OF DEPOSITED SECURITIES

The Bearer Receipts have no direct voting rights. See "THE TRUST AND THE
BEARER RECEIPTS -- Voting of the Ordinary Shares". The Trust is the holder of
all Ordinary Shares underlying the Bearer Receipts and has sole power to vote
such Ordinary Shares. The Trust, as it deems necessary or desirable, may call a
meeting to consult Holders of the Bearer Receipts (subject to such stipulations
as the Trust shall consider appropriate). If the Trustee shall call a meeting of
holders of Bearer Receipts for the purpose of such consultation, ING Groep N.V.
shall cause to be given to the Depositary any required published announcement of
such meeting, along with any documents which such announcement provides are
available free of charge to holders of the Bearer Receipts, in English. As soon
as practicable after receipt of such announcement and documents, or of any
notice of any meeting or solicitation of consents or proxies of holders of other
Deposited Securities, the Depositary shall mail to Holders of ADRs a notice
containing (a) such information as is contained in such announcement, together
with a statement that such documents are available free of charge to such
Holders of ADRs, or in such notice and in the solicitation materials, if any,
(b) a statement that each Holder of ADRs at the close of business on a specified
record date will be entitled, subject to the provisions of or governing
Deposited Securities, to instruct the Depositary as to the exercise of the
voting rights, if any, pertaining to the Deposited Securities represented by the
ADSs evidenced by such Holders' ADRs and exercisable at such meeting, and (c) a
statement as to the manner in which such instructions may be given, including an
express indication that instructions may be given (or be deemed given in
accordance with the last sentence of this paragraph if no instruction is
received) to the Depositary to give a discretionary proxy to a person designated
by ING Groep N.V. Upon the written request of a Holder of ADRs on such record
date, received on or before the date established by the Depositary for such
purposes, the Depositary shall endeavor insofar as practicable and permitted
under the provisions of or governing Deposited Securities to vote or cause to be
voted (or to grant a discretionary proxy to a person designated by ING Groep
N.V. to vote) the Deposited Securities represented by the ADSs evidenced by such
Holder's ADRs in accordance with any instructions set forth in such request. The
Depositary shall not itself exercise any voting discretion over any Deposited
Securities. If no instructions are received by the Depositary from any Holder
with respect to any of the Deposited Securities represented by the ADSs
evidenced by such Holder's ADR's on or before the date established by the
Depositary for such purpose, the Depositary shall deem such Holder to have
instructed the Depositary to give a discretionary proxy to a person designated
by ING Groep N.V. to vote such Deposited Securities and the Depositary shall
give a discretionary proxy to a person designated by ING Groep N.V. to vote such
Deposited Securities, provided that no such instruction shall be deemed given
and no such discretionary proxy shall be given with respect to any matter as to
which ING Groep N.V. informs the Depositary (and ING agrees to provide such
information promptly in writing) that (x) ING Groep N.V. does not wish such
proxy given, (y) substantial opposition exists or (z) the rights of holders of
ING Shares are materially affected.

REPORTS AND OTHER COMMUNICATIONS

The Depositary will promptly send to the Holders, at the expense of ING
Groep N.V., copies of any reports, notices and communications furnished by ING
Groep N.V. pursuant to the Deposit Agreement, including English-language
versions of ING Groep N.V.'s annual reports.

AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT

The ADRs and the Deposit Agreement may at any time be amended by agreement
between ING and the Depositary without the consent of the Holders of ADRs;
provided, however, that any amendment that imposes or increases any fees or
charges (other than taxes, other governmental charges, delivery and other such
expenses), or which otherwise prejudices any substantial existing right of ADR
Holders, will not take effect as to outstanding ADRs until the expiration of 30
days after notice of any such amendment has been given to the Holders of
outstanding ADRs. Every Holder at the expiration of 30 days after such notice
will be deemed by continuing to hold such ADRs to consent and agree to such
amendment and to be bound by the Deposit Agreement as amended thereby. In no
event may any amendment impair the

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right of any Holder of an ADR to surrender such ADR and receive therefor the
Bearer Receipts and any property represented thereby (including Deposited
Securities), except in accordance with mandatory provisions of applicable law.
In the event that the Depositary resigns, is removed or is otherwise substituted
and ING enters into a new deposit agreement, Holders will be promptly notified
by the successor depositary.

The Depositary shall at any time at the direction of ING terminate the
Deposit Agreement by mailing notice of such termination to the Holders of the
ADRs then outstanding at least 30 days prior to the date fixed in such notice
for such termination. The Depositary may likewise terminate the Deposit
Agreement by mailing notice of such termination to ING Groep N.V. and the
Holders of all ADRs then outstanding if, at any time after 90 days have expired
after the Depositary shall have delivered to ING a written notice of its
election to resign, a successor depositary shall not have been appointed and
accepted its appointment, in accordance with the terms of the Deposit Agreement.
After the date so fixed for termination, the Depositary thereafter will perform
no further acts under the Deposit Agreement, except to advise Holders of such
termination and the collection of dividends and other distributions pertaining
to the Deposited Securities, the sale of rights and other property and the
delivery of underlying Receipts, together with any dividends or other
distributions received with respect thereto and the net proceeds of the sale of
any rights or other property, in exchange for surrendered ADRs (after deducting
the fees of the Depositary and other expenses set forth in the Deposit
Agreement). As soon as practicable after the expiration of six months from the
date of termination, the Depositary may sell the Deposited Securities then held
thereunder and may thereafter hold the net proceeds of such sale together with
any other cash, in a segregated account and without liability for interest, for
the pro rata benefit of the Holders that have not theretofore surrendered their
ADRs, such Holders thereupon becoming general creditors of the Depositary with
respect to such net proceeds. After making such sale, the Depositary will be
discharged from all obligations under the Deposit Agreement, except to account
for net proceeds and other cash (after deducting the fees of the Depositary and
other expenses set forth in the Deposit Agreement and any applicable taxes or
other governmental charges).

CHARGES OF DEPOSITARY

The Depositary will charge any party depositing or withdrawing Bearer
Receipts or any party surrendering ADRs or to whom ADRs are issued where
applicable: (1) stock transfer and other taxes and other governmental charges
(2) such registration fees as may from time to time be in effect for the
registration of transfers of Bearer Receipts generally on the share register of
ING Groep N.V. (or the appointed agent of ING for transfer and registration of
Bearer Receipts) and applicable to transfers of Bearer Receipts to the name of
the Depositary or its nominee or the Custodian or its nominee on the making of
deposits or withdrawals (3) such cable, telex and facsimile transmission
expenses as are expressly provided in the Deposit Agreement to be at the expense
of persons depositing Bearer Receipts or Holders; (4) such expenses as are
incurred by the Depositary in the conversion of foreign currency pursuant to the
Deposit Agreement; (5) a fee not in excess of $5.00 per 100 ADSs (or portion
thereof) for the execution and delivery and for the surrender of ADRs pursuant
to the Deposit Agreement; and (6) an issuance fee.

LIABILITY OF HOLDER FOR TAXES

If any tax or other governmental charge shall become payable by the
Custodian or the Depositary with respect to any ADR or any Deposited Securities
represented by the ADSs evidenced by such ADRs, such tax or other governmental
charge will be payable by the Holder of such ADR to the Depositary. The
Depositary may refuse to effect registration of any transfer of such ADR or any
withdrawal of Deposited Securities underlying such ADR until such payment is
made and may withhold any dividends or other distributions or may sell for the
account of the Holder thereof any part or all of the Deposited Securities
underlying such ADR and may apply such dividends, distributions or the proceeds
of any such sale to pay any such tax or other governmental charges and the
Holder of such ADR shall remain liable for any deficiency.

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TRANSFER OF AMERICAN DEPOSITARY RECEIPTS

The ADRs are transferable on the books of the Depositary, provided that the
Depositary may close the transfer books at any time or from time to time when
deemed expedient by it in connection with the performance of its duties or at
the written request of ING Groep N.V. As a condition precedent to the execution
and delivery, registration, registration of transfer, split-up, combination or
surrender of any ADR, the delivery of any distribution thereon, or withdrawal of
any Deposited Securities, the Depositary or the Custodian may require payment
from the person presenting the ADR or the depositor of the Bearer Receipts of a
sum sufficient to reimburse it for any tax or other governmental charge and any
stock transfer, registration or conversion fee with respect thereto (including
any such tax or charge and fee with respect to Bearer Receipts being deposited
or withdrawn) and payment of any applicable fees payable by the holders of ADRs.
The Depositary may refuse to deliver ADRs, to register the transfer of any ADR
or to make any distribution on, or related to, Bearer Receipts or Ordinary
Shares until it has received such proof of citizenship or residence, exchange
control approval or other information as it may deem necessary or proper. The
delivery, transfer, combination or split-up of ADRs may be suspended during any
period when the transfer books of the Depositary, ING Groep N.V. or its agent
for the registration and transfer of Bearer Receipts are closed or if any such
action is deemed necessary or advisable by the Depositary or ING Groep N.V., at
any time or from time to time subject to the provisions of the Deposit
Agreement. Notwithstanding anything in the Deposit Agreement to the contrary,
the surrender of outstanding ADRs and the withdrawal of Deposited Securities may
not be suspended subject only to (i) the payment of fees, taxes and similar
charges and (ii) compliance with any U.S. or foreign laws or governmental
regulations relating to the ADRs or to the withdrawal of the Deposited
Securities.

ACQUISITION OF ADSS

All notifications and approvals required pursuant to the ING Articles or
under Netherlands law in connection with the acquisition of Bearer Receipts are
applicable in all respects, pursuant to the terms of the Deposit Agreement, to
the acquisition of ADSs. See "OBLIGATIONS OF SHAREHOLDERS TO DISCLOSE HOLDINGS".

GENERAL

Neither the Depositary nor ING Groep N.V. nor any of their respective
directors, employees, agents or affiliates will be liable to any Holder of ADRs
if by reason of any provision of any present or future law or regulation of the
United States, the Netherlands or any other country, or of any other
governmental or regulatory authority or stock exchange or by reason of any
provision, present or future, of the ING Articles, or by reason of any act of
God or war or other circumstance beyond its control, the Depositary or ING or
any of their directors, employees, agents or affiliates shall be prevented,
delayed or forbidden from, or be subject to any civil or criminal penalty on
account of, doing or performing any act or thing which by the terms of the
Deposit Agreement or the Deposited Securities it is provided shall be done or
performed; nor will the Depositary or ING Groep N.V. incur any liability to any
Holder by reason of any nonperformance or delay, caused as stated in the
preceding clause, in the performance of any act or thing which by the terms of
the Deposit Agreement it is provided shall or may be done or performed, or by
reason of any exercise of, or failure to exercise, any discretion provided for
under the Deposit Agreement, or the ING Articles or the Trust Agreement.

ING Groep N.V. and the Depositary assume no obligation nor shall either be
subject to any liability under the Deposit Agreement, except that each shall
agree to perform its respective obligations specifically set forth therein
without negligence or bad faith.

The Depositary will keep books, at its transfer office in the Borough of
Manhattan, The City of New York, for the registration of transfers of ADRs,
which at all reasonable times will be open for inspection by the Holders,
provided that such inspection shall not be for the purpose of communicating with
Holders in

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the interest of a business or object other than the business of ING Groep N.V.
or a matter related to the Deposit Agreement or the ADRs.

The Depositary may, after consultation with ING Groep N.V., appoint one or
more co-transfer agents for the purpose of effecting transfers, combinations and
split-ups of ADRs at designated transfer offices on behalf of the Depositary. In
carrying out its functions, a co-transfer agent may require evidence of
authority and compliance with applicable laws and other requirements by holders
of ADRs or owners or persons entitled thereto and will be entitled to protection
and indemnity to the same extent as the Depositary.

GOVERNING LAW

The Deposit Agreement is governed by the laws of the State of New York.

COMPARISON OF CERTAIN RIGHTS OF SHAREHOLDERS OF THE COMPANY AND HOLDERS
OF BEARER RECEIPTS OR ORDINARY SHARES OF ING GROEP N.V.

As a result of the Merger, shareholders of the Company electing the Stock
Consideration will become holders of ADSs representing Bearer Receipts. The
rights of holders of Bearer Receipts are governed by the ING Articles, the Trust
Agreement and Netherlands law which differ in material respects from the
Restated Articles of Incorporation of the Company (the "Articles"), the
Company's by-laws (the "By-laws") and Iowa law. The following is a summary of
certain material differences between the rights of holders of Shares and holders
of Bearer Receipts. Bearer Receipts, which are negotiable instruments under
Netherlands law, are issuable by the Trust pursuant to the terms of the Trust
Agreement. Each Bearer Receipt represents financial interests in one Ordinary
Share held by the Trust, as described herein. As described below, holders of
Bearer Receipts (including those for which ADSs have been issued) are not
entitled to exercise any voting rights with respect to the Ordinary Shares which
underlie the Bearer Receipts and are owned by the Trust. Such rights are
exercisable only by the Trust pursuant to the terms of the Trust Agreement. In
addition, because the Bearer Receipts may at any time, subject to the
restrictions noted in "DESCRIPTION OF ORDINARY SHARES -- General", be exchanged
for Ordinary Shares, the following also summarizes certain material differences
between the rights of holders of Shares and of Ordinary Shares. More than 99% of
the Ordinary Shares are represented by Bearer Receipts. There are no limitations
under Netherlands law on the rights of non-residents or non-citizens to hold or
vote the Bearer Receipts or Ordinary Shares, other than the general limitations
described below. See "DESCRIPTION OF ORDINARY SHARES" and "THE TRUST AND THE
BEARER RECEIPTS". Because holders of ADSs have substantially the same rights as
holders of Bearer Receipts, this section does not separately discuss the rights
of ADS holders as such. For a description of the documents governing the ADSs,
see "DESCRIPTION OF AMERICAN DEPOSITARY SHARES".

The following description of certain provisions of the ING Articles, the
Trust Agreement and the applicable provisions of Netherlands law does not
purport to be complete and is qualified in its entirety by reference to the ING
Articles, the Trust Agreement and the applicable provisions of Netherlands law
referred to in such description. The ING Articles and the Trust Agreement,
together with English translations thereof, are incorporated by reference in the
Registration Statement of which this Prospectus/Proxy Statement forms a part.

AMENDMENT OF CONSTITUENT DOCUMENTS

Under the BCA, amendments to a corporation's articles of incorporation
require a recommendation of the board of directors, unless the board determines
because of conflict of interest or other special circumstances it should make no
recommendation, followed by the approval of a majority of the votes entitled to
be cast on any amendment with respect to which the amendment would create
dissenters' rights (e.g., an amendment that would materially and adversely
affect rights in respect of a dissenter's shares) and, if there are no
dissenters' rights, by a vote in which the votes cast in favor exceed the votes

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cast in opposition if a quorum, consisting of a majority of the votes entitled
to be cast, exists, unless in either case the articles of incorporation, the
Company Board or the BCA requires a greater vote.

The Articles require the affirmative vote of two-thirds of the votes
entitled to be cast to amend, alter, change or repeal Article V of the Articles
which relates to the board of directors.

Only the Management Board of the Trust may amend the Trust's articles of
association. A resolution of the Trust's Management Board to amend the Trust's
articles of association must be adopted in a meeting of the Management Board in
which all members of the Management Board are present or represented. In
addition, the prior approval of the Executive Board of ING Groep N.V. and the
AEX Stock Exchange is required. The Trust's Management Board may only adopt such
a resolution if there are no vacancies in the Management Board.

Resolutions to amend the ING Articles may only be adopted upon a proposal
by the Executive Board that is approved by the Supervisory Board. Such
resolution must generally be approved by at least two-thirds of the votes cast
at a general meeting of shareholders at which at least two-thirds of the issued
share capital is represented.

VOTING RIGHTS

Under the BCA and the By-laws, each holder of Shares is entitled to one
vote per Share.

Holders of Bearer Receipts are not entitled to give binding instructions to
the Trust concerning the Trust's exercise of the voting rights attached to the
Ordinary Shares, although, whenever the Trust deems necessary or desirable, the
Trust may consult holders of Bearer Receipts to the degree and subject to such
terms it considers appropriate. Holders of Bearer Receipts are entitled to
attend and speak at general meetings of shareholders of ING Groep N.V. The
Trust, however, is required to make use of the voting rights attached to the
Ordinary Shares in such a manner that (i) the interests of ING Groep N.V. and of
the enterprises sustained by ING Groep N.V. and the companies affiliated as a
group with ING Groep N.V. are served; (ii) the interests of ING Groep N.V. and
of those enterprises and all parties concerned are safeguarded as well as
possible; and (iii) influences which could violate the independence, the
continuity or the identity of ING Groep N.V. and those enterprises contrary to
the aforementioned interests are barred to the greatest extent possible. The
Trust reserves the right to decide its vote without consulting the holders of
Bearer Receipts.

In order to vote at the general meeting of shareholders, holders of
Ordinary Shares must notify ING Groep N.V. in writing of their intention to
attend the meeting no later than the fourth AEX Stock Exchange day before the
day of the meeting. Ordinary Shares have one vote per share.

ING Groep N.V. has outstanding preference shares which are entitled to 2.5
votes per share. See "DESCRIPTION OF PREFERENCE SHARES".

SHAREHOLDERS' MEETINGS

Under the BCA, an annual meeting of shareholders must be held at a time
stated in or fixed in accordance with the by-laws and may be ordered by a court
upon application of any shareholder if an annual meeting is not held within the
earlier of six months after the end of the corporation's fiscal year or fifteen
months after its last annual meeting. The By-laws provide that the annual
meeting shall be held on or about April 30 or such other date as the Board may
designate. Under the By-laws, holders of 10 percent of all votes entitled to be
cast on any issue proposed to be considered at a special meeting may call a
special meeting.

Under Netherlands law, a public company with limited liability must hold at
least one annual general meeting of shareholders, to be held not later than six
months after the end of the fiscal year unless the articles of association
provide for a shorter term (which is not done by the ING Articles). Pursuant to
the ING Articles, general meetings of shareholders may also be held as often as
the Executive Board or the Supervisory Board deems desirable. In addition,
shareholders or holders of Bearer Receipts representing

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at least one-tenth of the issued share capital may request the Executive Board
in writing to convene a general meeting of shareholders. If the Executive Board
or the Supervisory Board has not taken measures so that the meeting can be held
within six weeks after such request has been made, the persons who have made the
request are authorized to convene such a meeting in accordance with requirements
of Netherlands law. The ING Articles specify the places where general meetings
of shareholders may be held, all of which are located in the Netherlands.

ACTION BY WRITTEN CONSENT OF SHAREHOLDERS

The BCA provides that, unless otherwise provided in a corporation's
articles of incorporation, any action required or permitted to be taken at a
meeting of shareholders may be taken without a meeting or vote, if the holders
of outstanding stock have not less than the ninety percent of the votes entitled
to be cast. The Articles have no provisions concerning action by written
consent.

Under Netherlands law, resolutions may be adopted by shareholders in
writing without holding a meeting of shareholders, provided the articles of
association expressly so allow and provided no bearer shares or, with the
cooperation of the company, depositary receipts for shares, are issued. As the
ING Articles do not contain such express provision, ING Groep N.V. has issued
bearer shares and depositary receipts for shares that have been issued with ING
Groep N.V.'s cooperation, shareholders of ING Groep N.V. may not adopt
resolutions without a meeting of shareholders.

SHAREHOLDER NOMINATIONS

The By-laws provide that shareholders may nominate individuals for election
to the board of directors at a meeting of the Company's shareholders entitled to
vote for the election of directors. In order to nominate an individual, a
shareholder must deliver written notice to the Secretary of the Company (i) with
respect to an annual meeting not later than 120 days in advance of the date of
the Company's proxy statement released to shareholders in connection with the
preceding year's annual meeting, or if no previous annual meeting was held or
the date of the annual meeting has been changed by more than 30 days, a proposal
shall be received within a reasonable time and (ii) with respect to a special
meeting held for the election of directors not later than the close of business
on the tenth day following the day on which such notice of the date of the
meeting was given to the shareholders. The written notice must set forth certain
information as to the shareholder making the proposal and the nominees. The
presiding officer at the meeting may refuse to acknowledge the nomination of any
person not made in compliance with such provisions.

The ING Articles provide that the members of the Executive Board are
appointed to the Executive Board by the Supervisory Board. The Supervisory
Board's authority to appoint members of the Executive Board may not be limited
by a binding nomination.

ELECTION AND REMOVAL OF DIRECTORS; FILLING OF VACANCIES

The Articles provide that the Board of Directors shall consist of not less
than nine nor more than 15 persons, as determined by a majority vote of the
Board. The Board is classified into three classes, each elected for three-year
terms. Directors are removable only for cause by a vote of two-thirds of the
votes then entitled to vote for directors. Shareholders are entitled to cumulate
their votes in the election of directors. The By-laws provide that vacancies,
including as a result of removals, are filled by the majority vote of the
remaining directors but that a director so elected to fill a vacancy may
continue in office only until the next election of directors by shareholders.

Pursuant to the terms of its articles of association, the Trust is
administered by a Management Board, which consists of seven members. Two members
of the Management Board (each a "Managing Director - A") are appointed by ING
Groep N.V.'s Supervisory Board from among its members. The other five members of
the Management Board (each a "Managing Director - B", and together with Managing
Directors - A, the "Managing Directors") are appointed by the Management Board
itself, subject to the approval of the Executive Board of ING Groep N.V.
Managing Directors are appointed for terms of three

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years. Valid resolutions may be passed only if at least one Managing
Director - B is present or represented and all Managing Directors have been duly
notified, except that in a case where there is no such notification, valid
resolutions may nevertheless be passed by unanimous consent at a meeting at
which all Managing Directors are present or represented. A Managing Director may
only be represented by a fellow Managing Director who is authorized in writing.
All resolutions of the Management Board require a favorable vote of a majority
of the Managing Directors.

The ING Articles provide that each of ING Groep N.V.'s Supervisory Board
and Executive Board consists of at least three members, with the number to be
determined by the Supervisory Board. Under the ING Articles, the Supervisory
Board appoints the members of the Executive Board and determines the terms of
employment of such members. The Executive Board is responsible for the
management of ING Groep N.V. and as such has responsibility for the policy and
central management of ING Groep N.V., under the supervision of the Supervisory
Board. The Supervisory Board advises the Executive Board and is responsible for
supervising the policy of the Executive Board and the general course of business
within ING. In addition, certain resolutions by the Executive Board are subject
to approval by the Supervisory Board. In the performance of their duties, the
members of the Supervisory Board must serve the interests of ING. The members of
the Executive Board are employees of ING.

The Supervisory Board, subject to certain limitations, appoints its own
members. The Executive Board, the General Meeting, and the GENERAL WORKS COUNCIL
may recommend candidates for membership on the Supervisory Board. The General
Meeting and the General Works Council have certain limited rights to object to
candidates for membership on the Supervisory Board. The latter two also have a
right to object to candidates proposed for appointment by the Supervisory Board.
No employee of ING is eligible for appointment to the Supervisory Board. Members
of the Supervisory Board are appointed for a maximum term of four years and may
be reappointed. However, members are required to retire at the end of the annual
general meeting of shareholders in the year in which they reach the age of 70,
unless an exemption is granted by the Supervisory Board, in which case, the
Supervisory Director concerned must resign at the end of the annual general
meeting of shareholders in the year in which he or she reaches the age of 72.

Under Netherlands law and the ING Articles, the Supervisory Board has the
authority to suspend or remove members of the Executive Board. A member of the
Executive Board can be removed by the Supervisory Board only after having
consulted with the General Meeting on the intended dismissal. Removal without
cause is possible but may be contrary to the principles of reasonableness and
fairness which are imposed under Netherlands law. Any removal without cause
therefore could be declared null and void. Members of the Supervisory Board may
be removed by the court upon petition by ING Groep N.V. for such purpose
represented by the Supervisory Board or the General Meeting.

DISSENTERS' RIGHTS

The BCA provides for dissenters' rights in connection with certain mergers,
plans of exchange, sales of substantially all the property of the corporation,
amendments of the articles of incorporation that materially and adversely affect
the rights of the shareholder and, to the extent the articles of incorporation,
the by-laws or a board resolution so provide. The Articles and By-laws have no
provisions relating to dissenters' rights.

None of the ING Articles, the Trust Agreement and Netherlands law recognize
the concept of dissenters' rights and, accordingly, holders of Ordinary Shares,
as well as holders of Bearer Receipts, have no dissenters' rights.

PREEMPTIVE RIGHTS

Under the Articles, shareholders of the Company have no preemptive rights
to subscribe for or purchase any additional shares or securities convertible
into or exchangeable for or carrying warrants or rights to purchase shares.

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Under Netherlands law, holders of shares in a public company with limited
liability have preemptive rights with respect to newly issued shares in
proportion to the aggregate nominal value of their shareholdings (with the
exception of shares to be issued to employees of the company or any other
company that is a member of the same group under Netherlands law). Such
preemptive rights in respect of newly issued ordinary shares (the ADSs being
paid as Stock Consideration are being issued in respect of Ordinary Shares held
in treasury) may be limited or excluded by the General Meeting or another
corporate body designated for this purpose by the general meeting of
shareholders or the articles of association for a maximum term of five years.
Unless the articles of association state otherwise (which the ING Articles do
not), holders of preference shares have no preemptive rights and shareholders
have no preemptive rights with respect to newly issued preference shares or
shares issued for a contribution other than cash.

The ING Articles provide that upon the issue of Ordinary Shares holders of
Ordinary Shares have a preemptive right subject to the exceptions provided by
Netherlands law. A resolution of the General Meeting to limit or exclude the
preemptive right or to designate another corporate body requires a simple
majority of the votes cast if more than half, or a majority of at least
two-thirds of the votes cast if less than half, of the issued share capital of
ING Groep N.V. is represented at the relevant general meeting of shareholders.
At the annual general meeting of shareholders on May 6, 1997, the General
Meeting designated the Executive Board as being authorized for a period ending
on May 2000 to limit or exclude preemptive rights for the issuance of
652,000,000 Ordinary Shares.

If ING Groep N.V. offers or causes to be offered to the holders of Ordinary
Shares the right to subscribe for additional ING Shares, the Trust, subject to
applicable law, will offer to each holder of Bearer Receipts the right to
instruct the Trust to subscribe for such holder's proportionate share of such
additional shares, subject to such holder providing the Trust with the funds
necessary to subscribe for such additional ING Shares. If such an offer is made
and if a holder of Bearer Receipts provides the Trust with the necessary funds,
the Trust will subscribe for the corresponding number of ING Shares, which will
be placed in the Trust, and deliver additional Bearer Receipts in respect of
such shares, to each such holder of Bearer Receipts or adopt such method as it
may deem equitable and practicable to permit such subscription. The Trust will
offer such rights to a holder of Bearer Receipts only if such offer is legal and
valid under the provisions of the laws of the country of residence of such
holder of Bearer Receipts.

DIVIDENDS

Under the BCA, an Iowa corporation may make a distribution subject to
restrictions in the articles of incorporation and unless after giving effect to
the distribution (i) the corporation would not be able to pay its debts as they
become due in the ordinary course or (ii) the corporation's total assets would
be less than the sum of its total liabilities plus, unless the articles of
incorporation permit otherwise, the amount that would be needed, if the
corporation were dissolved at the time of the distribution, to satisfy the
preferential rights of shareholders whose preferential rights are superior to
those receiving the distribution. The Articles have no provisions concerning
distributions.

Holders of Bearer Receipts are entitled to receive the economic benefits
corresponding to the Ordinary Shares underlying such Bearer Receipts within one
week of the time when the Trust receives the corresponding dividends or other
distributions to shareholders. The Trust will distribute cash dividends and
other cash distributions received by it in respect of the Ordinary Shares held
in the Trust to the holders of the Bearer Receipts in proportion to their
respective holdings, in each case in the same currency in which they were
received. Cash dividends and other cash distributions in respect of Bearer
Receipts for which ADSs have been issued will be distributed in U.S. dollars in
accordance with the Deposit Agreement.

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distribution. In the event the Trust receives any distribution with respect to
Ordinary Shares held by the Trust other than in the form of cash or additional
ING Shares, the Trust will adopt such method as it may deem legal, equitable and
practicable to effect such distribution.

Dividends, whether in cash or shares, may be payable out of the annual
profits of ING Groep N.V., as reflected in the annual accounts adopted by the
Supervisory Board and approved by the General Meeting. At its discretion, but
subject to statutory provisions, the Executive Board may, with the prior
approval of the Supervisory Board, distribute one or more interim dividends,
whether in cash, or shares, on one or more classes of shares before the annual
accounts for any financial year have been adopted by the Supervisory Board and
approved by the General Meeting. The Executive Board, with the approval of the
Supervisory Board, may decide that all or part of ING Groep N.V.'s profits after
the distribution of dividends to the holders of Preference Shares should be
retained and not be made available for distribution to holders of Ordinary
Shares. Those profits that are not retained may be distributed to shareholders
pursuant to a resolution of the General Meeting, provided that the distribution
does not reduce shareholders' equity below the issued share capital increased by
the amount of reserves required by Netherlands law. The Executive Board
determines, with the approval of the Supervisory Board, whether the dividends on
Ordinary Shares are payable in cash, in shares, or at the option of the holders
of Ordinary Shares, in cash or in shares. Existing reserves that are
distributable in accordance with Netherlands law may be made available to the
General Meeting for distribution upon proposal by the Executive Board, subject
to prior approval by the Supervisory Board. See "DIVIDENDS" for additional
discussion of the dividend rights of holders of Ordinary Shares. The Executive
Board may also decide, with the approval of the Supervisory Board, to declare
dividends in the currency of the country other than the Netherlands in which the
Bearer Receipts are trading.

RIGHTS OF PURCHASE AND ACQUISITION

Under the BCA, a corporation may redeem or repurchase its own shares.

Under Netherlands law, a public company with limited liability may not
subscribe for newly issued shares in its own capital. Such company may, subject
to certain restrictions of Netherlands law and its articles of association,
acquire shares and/or depositary receipts for shares in its own capital. ING
Groep N.V. may acquire its own shares and/or Bearer Receipts for consideration
if (i) shareholders' equity less the payment required to make the acquisition is
not less than the sum of called and paid-up capital and any reserve required by
Netherlands law and the ING Articles and (ii) ING Groep N.V. and its
subsidiaries would not thereafter hold or hold as a pledgee shares and/or Bearer
Receipts with an aggregate nominal value exceeding one-tenth of the nominal
value of ING Groep N.V.'s issued share capital. Shares in its own capital held
by ING Groep N.V. or by a subsidiary of ING Groep N.V. and shares in its own
capital for which ING Groep N.V. or a subsidiary of ING Groep N.V. holds Bearer
Receipts may not be voted or counted for quorum purposes. For any such
acquisitions the Executive Board requires authorization of the General Meeting,
which authorization may apply for a maximum period of eighteen months and
approval of the Supervisory Board.

SHAREHOLDER VOTES ON CERTAIN REORGANIZATIONS

Under the BCA, the vote of a majority of the outstanding shares of capital
stock entitled to vote thereon generally is necessary to approve a merger, such
as the Merger, or consolidation.

Under the BCA, no vote of the shareholders of a surviving corporation to a
merger is needed, however, if (i) the plan of merger does not amend the articles
of incorporation of the surviving

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corporation (other than those amendments which can otherwise be made without
shareholder approval), (ii) the shares of stock of the surviving corporation are
not changed in the merger and (iii) the number of shares of common stock of the
surviving corporation into which any other shares, securities or obligations to
be issued in the merger may be converted does not exceed 20% of the surviving
corporation's common shares outstanding immediately prior to the effective date
of the merger. In addition, stockholders may not be entitled to vote in certain
mergers with other corporations that own 90% or more of the outstanding shares
of each class of stock of such corporation.

The ING Articles do not expressly require the approval of the General
Meeting for reorganizations or mergers in which ING Groep N.V. would not be the
surviving entity, but by virtue of the application of Netherlands statutory law,
a legal merger involving ING Groep N.V. and in which ING Groep N.V. would not be
the surviving entity is subject to the approval of the General Meeting. A
resolution to effect a legal merger in which ING Groep N.V. would not be the
surviving entity may be passed upon the motion of the Executive Board approved
by the Supervisory Board and approved by at least two-thirds of the votes cast
at a general meeting of shareholders at which at least two-thirds of the issued
share capital is represented.

RIGHTS OF INSPECTION

Under the BCA, any shareholder may inspect for any proper purpose the
corporation's stock ledger, a list of its shareholders and its other books and
records during the corporation's usual hours for business.

Under Netherlands law, the shareholders' register is available for
inspection by the shareholders. Holders of the Bearer Receipts, however, will
have no such rights. Members of the Supervisory Board are authorized to inspect
the books and records of ING Groep N.V. and are permitted access to the
buildings and premises of ING Groep N.V.

LIMITATION OF DIRECTORS' LIABILITY/INDEMNIFICATION OF OFFICERS AND DIRECTORS

The BCA permits a corporation to include in its articles of incorporation a
provision eliminating or limiting a director's personal liability to the
corporation or its shareholders for monetary damages for breaches of fiduciary
duty. However, the BCA expressly provides that the liability of a director may
not be eliminated or limited for (i) breaches of the director's duty of loyalty
to the corporation or its shareholders, (ii) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii) any
transaction from which the director derived an improper personal benefit or (iv)
the unlawful purchase or redemption of stock or unlawful payment of dividends.
The BCA further provides that no such provision shall eliminate or limit the
liability of a director for any act or omission occurring prior to the date when
such provision becomes effective. The Articles contain a provision eliminating
director liability to the fullest extent permitted by the BCA.

Generally, the BCA permits a corporation to indemnify certain persons made
a party to any action, suit or proceeding by reason of the fact that such person
is or was a director, officer, employee or agent of the corporation, provided
that such person acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation. To the extent
that person has been successful in any such matter, that person shall be
indemnified against expenses actually and reasonably incurred by him. In the
case of an action by or in the right of the corporation, no indemnification may
be made in respect of any matter as to which that person was adjudged liable to
the corporation unless and only to the extent that the court in which the action
was brought determines that despite the adjudication of liability that person is
fairly and reasonably entitled to indemnity for proper expenses.

The concept of indemnification of directors of a company for liabilities
arising from their actions as members of the executive or supervisory boards is,
in principle, accepted in the Netherlands, provided such directors have duly
performed their duties, and sometimes is provided for in a company's articles of
association. Although neither the laws of the Netherlands nor the ING Articles
contain any specific provisions in this respect, ING Groep N.V. has
contractually agreed to indemnify members of the ING

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Groep N.V. Executive and Supervisory Boards and officers of ING Groep N.V. to
the extent permitted under Netherlands law.

CERTAIN PROVISIONS RELATING TO BUSINESS COMBINATIONS

The BCA generally prevents a corporation from entering into certain
business combinations with an "interested stockholder" (defined generally to
include any person or entity that is the beneficial owner of at least 15% of a
corporation's outstanding voting stock or certain of its affiliates) within a
three-year period immediately following the time that such stockholder became an
"interested stockholder", unless (i) the business combination or the transaction
which resulted in the stockholder becoming an "interested stockholder" is
approved by the board of directors of the corporation, prior to such time as the
stockholder became an "interested stockholder", (ii) the interested stockholder
acquired at least 85% of the corporation's voting stock in the same transaction
in which it became an "interested stockholder" or (iii) at or subsequent to such
time in which the stockholder became an "interested stockholder", the business
combination is approved by the board of directors and authorized at an annual or
special meeting of stockholders, and not by written consent, by a vote of
66 2/3% of the outstanding voting stock not owned by the interested stockholder.

Neither Netherlands law nor the ING Articles specifically prevent business
combinations with interested shareholders.

SHAREHOLDER SUITS

Under the BCA, a stockholder may bring a derivative action on behalf of the
corporation to enforce the rights of the corporation. A person may institute and
maintain such a suit only if such person was a shareholder at the time of the
transaction (or became a shareholder through transfer of operation of law from
one who was a shareholder at that time) which is the subject of the suit, and
also through the duration of the derivative suit. Iowa law also requires that
the derivative plaintiff make a demand on the directors of the corporation to
assert the corporate claim before the suit may be prosecuted by the derivative
plaintiff, unless such demand would be futile.

Netherlands law does not provide for derivative suits or class actions.

CONFLICT-OF-INTEREST TRANSACTIONS

The BCA generally permits transactions involving an Iowa corporation and an
interested director of that corporation if (a) the material facts as to his
relationship or interest are disclosed and a majority of disinterested directors
consents, (b) the material facts are disclosed as to his relationship or
interest and a majority of shares entitled to vote thereon consents, or (c) the
transaction is fair to the corporation at the time it is authorized by the board
of directors, a committee or the stockholders.

Under Netherlands law, unless the articles of association of a company
provide otherwise, the company will be represented by its supervisory board in
case of a conflict of interest between such company and one or more of its
executive board members. The ING Articles provide that if any member of the
Executive Board has an interest which conflicts with that of ING Groep N.V.,
such member shall be entitled, like every other member of the Executive Board,
to represent ING Groep N.V., unless he has a conflicting interest in a personal
capacity, in which case the chairman of the Supervisory Board or another
supervisory director designated by the Supervisory Board shall be authorized to
represent ING Groep N.V.

TRANSFER RESTRICTIONS

There are no transfer restrictions applicable to the Shares. See
"-- Shareholder Rights Agreement".

Under the ING Articles, only natural persons may hold Ordinary Shares and
Preference Shares, and the issuance or transfer of Ordinary Shares and
Preference Shares is not permitted if and to the extent that the acquiror or
transferee alone or, pursuant to a mutual cooperation arrangement, together with
one

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or more natural or legal persons, directly or (other than as a depositary
receipt holder) indirectly (i) holds a nominal amount of Ordinary Shares or
Preference Shares equal to or exceeding 1% of the total issued ordinary share
capital or the total issued preference share capital or (ii) would acquire by
such a transfer more than 1% of the total issued ordinary share capital or the
total issued preference share capital, respectively.

SHAREHOLDER RIGHTS AGREEMENT

The Company Board adopted a Shareholder Rights Agreement, as amended (the
"Rights Agreement"), effective as of April 30, 1992. In connection with the
effectiveness of the Rights Agreement, the Company Board declared a dividend
distribution of one right (a "Right") for each outstanding Share. Each Right,
when exercisable, entitles the registered holder to purchase from the Company
one or more Shares (or in some instances an equivalent security equal in value
to a Share) at an exercise price of $100.00 per Right, subject to adjustment.

Currently the Rights are not exercisable. They trade with, and cannot be
separated from, the outstanding Shares. The Rights become exercisable (i) ten
days following a public announcement that a person or group of affiliated or
associated persons, with the exception of certain Company related entities (an
"Acquiring Person"), has acquired, or obtained the right to acquire, beneficial
ownership of 25% or more of the Shares or (ii) ten days following the
commencement of (or a public announcement of an intention to make) a tender
offer or exchange offer which would result in any person or group of related
persons acquiring beneficial ownership of 25% or more of the Shares (the earlier
of such dates being called the "Distribution Date"). If the Company is involved
in a merger or business combination at any time after the Distribution Date, the
Rights will entitle a holder to buy a number of shares of common stock of the
acquiring company having a market value of twice the exercise price of each
Right. If any person or group acquires 25% or more of the Shares, the Rights
will entitle a holder (other than such person or any member of such group) to
buy a number of additional Shares (or in some instances an equivalent security
of the Company) having a market value of twice the exercise price of each Right.

The Rights expire on the earlier of April 30, 2002 or redemption of the
Rights by the Company. The Rights are redeemable at a price of one-quarter of
one cent ($.0025) per Right at any time before a person becomes an Acquiring
Person or at any time before the Distribution Date.

As required by the Merger Agreement, the Rights Agreement has been amended
so as to terminate immediately prior to the Effective Time and further to
provide that the Merger will not entitle any person to acquire securities of any
person at a discount, regardless of whether there is an Acquiring Person.

There is no comparable right attached to either Ordinary Shares or Bearer
Receipts. Ownership of Ordinary Shares, however, is subject to the limitation
described above under "-- Transfer Restrictions".

EXCHANGE CONTROLS

Cash distributions, if any, payable in guilders on Ordinary Shares, Bearer
Receipts and ADSs may be officially transferred from the Netherlands and
converted into any other currency without violating Netherlands law, except that
for statistical purposes such payments and transactions must be reported by ING
Groep N.V. to the Dutch Central Bank and, further, no payments, including
dividend payments, may be made into jurisdictions subject to certain sanctions,
adopted by the government of the Netherlands, implementing resolutions of the
Security Council of the United Nations. See "DIVIDENDS".

OBLIGATIONS OF SHAREHOLDERS TO DISCLOSE HOLDINGS

The Netherlands' 1996 Act on Disclosure of Holdings in Listed Companies
(the "1996 Major Holdings Act") applies to any person who, directly or
indirectly, acquires or disposes of an interest in the voting rights and/or the
capital of a public limited company incorporated under the laws of the
Netherlands with an official listing on a stock exchange within the European
Economic Area, as a result of

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which acquisition or disposal the percentage of voting rights or capital
interest acquired or disposed of falls within another percentage range as
compared to the percentage range held by such person prior to such acquisition
or proposal. The percentage ranges referred to in the 1996 Major Holdings Act
are 0-5, 5-10, 10-25, 25-50, 50-66 2/3 and over 66 2/3. With respect to ING
Groep N.V., the 1996 Major Holdings Act would require any person whose interest
in the voting rights and/or capital of ING Groep N.V. falls within such other
percentage range whether through ownership of Bearer Receipts, Ordinary Shares,
ADSs, Preference Shares, Options or Warrants, to notify in writing both ING
Groep N.V. and the Securities Board of the Netherlands (Stichting Toezicht
Effectenverkeer) immediately after the acquisition or disposal of the triggering
interest in ING Groep N.V.'s share capital.

The Securities Board will disclose the information as notified to the
public. Noncompliance with the obligations of the 1996 Major Holdings Act can
lead to criminal prosecution. In addition, a civil court can issue orders
against any person who fails to notify or incorrectly notifies the Securities
Board or ING Groep N.V., in accordance with the 1996 Major Holdings Act,
including suspension of the voting right in respect of such person's shares.

INFORMATION REGARDING ING

GENERAL

ING operates in 58 countries worldwide, and is one of the world's largest
integrated financial service providers, offering a comprehensive range of life
and non-life insurance, commercial and investment banking, asset management and
related products and services. ING has extensive operations in Europe, North
America, South America, Africa, Asia and Australia. In 1996, ING had gross
written premiums of NLG 24,322 million making it the largest insurer in the
Netherlands. Management believes that at December 31, 1995, ING was the 11th
largest insurer in Europe and the 32nd largest insurer in the world, based on
gross written premiums. At the end of 1996, ING Bank had total assets of NLG
311.4 billion making it the third largest bank in the Netherlands. Management
believes that at December 31, 1995, ING Bank was the 32nd largest bank in Europe
and the 51st largest bank in the world based on total assets. Management also
believes that, based on consolidated total assets at December 31, 1995, ING was
the 33rd largest financial institution in the world. ING's products and services
are marketed under a variety of well-recognized and strong brand names,
including Nationale-Nederlanden, ING Bank and ING Barings worldwide; Postbank in
the Netherlands; Mercantile Mutual in Australia; NN Financial, Commerce Group,
Belair, Halifax and Western Union in Canada; and Life of Georgia, Southland
Life, Security Life, Indiana Insurance, Peerless Insurance and Excelsior
Insurance in the United States. For the year ended December 31, 1996, ING's
total income was NLG 47,551 million and its net profit was NLG 3,321 million.
ING had consolidated total assets of NLG 483.9 billion at the end of 1996.

ING was formed in March 1991 when Nationale-Nederlanden N.V., the largest
Dutch insurance group, and NMB Postbank Groep N.V., the third largest bank in
the Netherlands, merged. As part of the merger, a newly formed holding company,
Internationale Nederlanden Groep N.V. (which changed its name to ING Groep N.V.
on December 1, 1995) exchanged its shares for the shares of Nationale-
Nederlanden N.V. and NMB Postbank Groep N.V. ING's principal subholdings, since
renamed ING Verzekeringen N.V. and ING Bank N.V., respectively, remained legally
distinct entities following the merger. These subholdings are subject to
separate regulatory supervision with respect to their respective insurance and
banking activities. However, ING's operational management structure was
reorganized in 1994 to seek to maximize the possibilities for cooperation
between ING's insurance and banking activities, strategically as well as
commercially, through the creation of four "management centres", which operate
across legal entities and combine various aspects of ING's products and
services. The four management centres are ING Nederland, ING Financial Services
International, ING Corporate & Investment Banking and ING Asset Management. See
"ING BUSINESS OPERATIONS -- General -- Management Structure".

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In the Netherlands, ING is the largest life and pension insurer and the
second largest non-life insurer, in each case based on gross premiums written in
1995. ING Bank is the third largest bank in the Netherlands based on total
banking assets in 1996 and has the leading position in the Dutch payments
transfer system. ING, through its banking and insurance operations, has a
financial relationship with approximately 75% of households in the Netherlands.

Outside the Netherlands, ING's international insurance operations
concentrate primarily on servicing individuals and small and medium-sized
enterprises in regional and national markets. ING occupies a leading position in
life insurance in several countries, and has utilized the establishment of new
"GREENFIELD" INSURANCE OPERATIONS as a key to its strategy for international
expansion in emerging markets outside the Netherlands. ING currently has
insurance activities in 25 countries outside the Netherlands. The international
banking operations of ING have gained a reputation for being leaders in emerging
markets, CORPORATE and INVESTMENT BANKING and also have a significant presence
in international trade and commodity finance. ING offers international corporate
and investment banking services through a network of 125 offices in 51
countries. In recent years ING has rapidly expanded its asset management and
investment banking activities, most notably as a result of the acquisition of
the principal assets and liabilities of the United Kingdom merchant bank,
Barings PLC ("Barings"), in March 1995.

The following table shows the relative contributions of ING's insurance and
banking operations to the consolidated result before taxation and dividends on
its own shares in 1996 compared to 1992.

YEAR ENDED DECEMBER 31,
--------------------------------------
1996 1992
---------------- ----------------
(NLG MILLIONS) (NLG MILLIONS)

Insurance.................................................. 2,498 54% 1,375 57%
Banking(1)................................................. 2,133 46 1,051 43
----- --- ----- ---
Total................................................. 4,631 100% 2,426 100%

- ---------------

(1) Includes the effect of value adjustments to receivables of the banking
operations which consist of a charge to ING's profit and loss account in
respect of the estimated risk inherent in ING's banking operations and which
include additions to the PROVISION FOR LOAN LOSSES and to the PROVISION FOR
GENERAL BANKING RISKS. See "ING MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION -- Recent Developments" and
"-- Liquidity and Capital Resources -- Capital Adequacy" and Notes 3.2.4 and
7.1(r) of Notes to the Consolidated Financial Statements.

BUSINESS

Although the Netherlands continues to be the core market of ING, 31% of
ING's consolidated results before taxation in 1996 came from outside the
Netherlands. The following table shows the relative contributions of ING's
consolidated operations by geographic area and by business segment to the
consolidated result before taxation for 1996 compared to 1992.

YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1992
----------------- ----------------
(NLG MILLIONS) (NLG MILLIONS)

The Netherlands
Insurance Operations.................................... 1,620 28% 873 26%
Banking Operations...................................... 2,334 41 1,191 36
Rest of Europe
Insurance Operations.................................... 164 3 (41) (1)
Banking Operations...................................... 309 5 151 5

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YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1992
------ -----
(NLG MILLIONS) (NLG MILLIONS)

North America
Insurance Operations.................................... 491 8 368 11
Banking Operations...................................... 162 3 302 9
South America
Insurance Operations.................................... 20 0 16 0
Banking Operations...................................... 286 5 183 6
Asia
Insurance Operations.................................... 92 2 23 1
Banking Operations...................................... 173 3 107 3
Australia
Insurance Operations.................................... 92 2 101 3
Banking Operations...................................... 5 0 0
Other..................................................... 13 0 35 1
------ --- ----- ---
Total (before value adjustments to receivables of the
banking operations).................................. 5,761 100% 3,309 100%
Value adjustments to receivables of the banking
operations........................................... (1,130) (883)
------ -----
Result before taxation and dividends on own share....... 4,631 2,426
====== =====

INSURANCE OPERATIONS

ING offers a comprehensive range of LIFE and NON-LIFE INSURANCE PRODUCTS in
the Netherlands, the United States, Canada, Australia and Belgium. ING's Dutch
insurance companies, the principal one of which is Nationale-Nederlanden, are
the largest group of insurance companies in the Netherlands based on 1995 gross
premiums written. ING also offers primarily a range of life insurance products
through greenfield operations in Europe, including a number of Central and
Eastern European countries, Asia and Latin America. Life insurance products
include RETIREMENT PRODUCTS and life products for individuals and groups. In
ING's mature markets, ING offers a broad range of such products with an
increasing emphasis on savings products. In ING's insurance greenfield
operations, the product range is generally more limited with an orientation
towards individual life coverages. All such products are tailored to the local
markets. In the non-life sector ING insurance products principally include fire,
automobile, accident and health as well as workmen's compensation, transport and
aviation and third-party liability. Total income in 1996 from insurance
operations was NLG 35,867 million (NLG 24,322 million in gross premiums written
and NLG 11,545 million in investment and other income) with life insurance
accounting for NLG 17,135 million of gross premiums written (70.5% of total
gross premiums written) and non-life insurance accounting for NLG 7,187 million
of gross premiums written (29.5% of total gross premiums written). In 1996, the
result before taxation from insurance operations of NLG 2,498 million
represented 54% of the result before taxation for ING.

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LIFE INSURANCE

The following table summarizes by geographic area ING's gross written
premiums and the result before taxation of ING's life operations for the year
ended December 31, 1996.

LIFE INSURANCE
LIFE INSURANCE RESULT BEFORE
GROSS PREMIUMS(1) TAXATION
----------------- -----------------
(NLG MILLIONS)

The Netherlands........................... 7,860 919
Rest of Europe............................ 1,748 35
North America............................. 4,586 178
South America............................. 52 2
Asia...................................... 1,446 52
Australia................................. 1,442 22
Other..................................... 5 (1)
Premiums between geographic areas(2)...... (4) --
------ -----
Total................................ 17,135 1,207
====== =====

- ---------------

(1) Including reinsurance assumed.

(2) Represents reinsurance premiums ceded between Group companies in different
geographic areas.

Life insurance products sold in the Netherlands consist of participating
(with profit) and non-participating (without profit) policies written for both
individual and group customers. Participating policies share in either the
results of the issuing company or investment returns on specified assets. In
recent years, an increasing number of policies participate in the investment
return of a specified investment fund, consistent with the trends in the Dutch
market. Gross premiums from the Dutch life insurance operations represented 46%
of all gross written life premiums of ING in 1996. In both the individual and
group business, ING is the largest provider of life insurance in the
Netherlands, with market shares of 22.9% and 30.2%, respectively, in 1995, the
last year for which Dutch industry data is available. In 1996, gross written
life premiums for individual products was NLG 4,843 million and for group
products was NLG 2,904 million.

Outside the Netherlands, ING sells life insurance products in its mature
markets of the United States (INTEREST-SENSITIVE PRODUCTS, GUARANTEED INVESTMENT
CONTRACTS ("GICS") and traditional products), Australia (life insurance, managed
funds, investment products and superannuation funds), Belgium (individual,
pension and group life) and Canada (primarily individual life and INVESTMENT
PRODUCTS). In addition to ING's life operations in the United States, Australia,
Belgium, and Canada where life companies have been acquired over time, ING's
other life insurance operations have been developed through its greenfield life
strategy. Since 1978, ING has established start-up life insurance operations in
14 countries. The following table lists the country and year in which ING began
(or intends to begin) selling life products.

GREENFIELD EXPANSION

1978.......... Spain
1980.......... Greece
1986.......... Japan
1989.......... Taiwan
1989.......... South Korea
1991.......... Hungary
1992.......... Czech Republic
1993.......... Italy
1995.......... Poland
1996.......... Mexico
1996.......... Slovak Republic
1996.......... Argentina
1997.......... Philippines
1997.......... Romania

The establishment of greenfield operations has been an important part of
ING's international expansion strategy. See "-- Strategy". Since 1992, gross
written life premium income from greenfield

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operations (including EX-GREENFIELDS) has increased from NLG 1,050 million to
NLG 2,579 million in 1996. The 1996 gross written life premiums from such
greenfield operations represented 15% of total gross written life premiums for
ING compared with 9.4% in 1992. In general, in greenfield operations the life
products offered are traditional, annual premium products although as the
companies and markets mature the product line is expanded. Japan, in which
operations commenced in 1986, had NLG 1,281 million in life gross premium income
in 1996, representing 49.7% of gross written life premium income from greenfield
operations.

NON-LIFE INSURANCE

ING is the second largest provider of non-life insurance in the
Netherlands, with a market share of 10.0% in 1995, the last year for which Dutch
industry data is available. Gross written premiums from the Dutch non-life
operations of NLG 2,845 million represented 38.4% of all non-life gross premiums
written by ING in 1996. Such gross premium income consisted of NLG 765 million
from fire, NLG 649 million from automobile, NLG 976 million from accident and
health and NLG 455 million from other products (including reinsurance assumed).
In 1996, ING's Dutch non-life operations had an aggregate loss ratio of 66.4%
and a combined ratio of 102.8%.

Outside the Netherlands, ING's principal markets for non-life insurance are
the United States and Canada. Gross premium income from these non-life
operations in 1996 represented 41.5% of ING's total non-life gross premium
income. In Canada, ING ranked second in the non-life sector with a market share
of more than 6% based on gross premiums written in 1995. Remaining non-life
insurance is written in Australia, Belgium, Spain, Greece, the Caribbean and
certain countries in Asia. The aggregate premiums written by such operations
represented 20.1% of ING's total non-life gross premium income in 1996.

BANKING OPERATIONS

ING's banking operations principally include the COMMERCIAL BANKING
operations conducted in the Netherlands through the branch network of ING Bank
Nederland ("IBN") and Postbank (direct marketing distribution and distribution
through the post office), the international corporate and investment banking
operations of ING Bank International ("IBI") and ING Barings and other
commercial banking operations in a number of the countries where ING conducts
insurance operations, including emerging markets, as part of ING's strategy to
offer a full range of integrated financial services in appropriate markets. In
1996, total income from banking operations was NLG 11,716 million and the result
before taxation of NLG 2,133 million represented 46% of the result before
taxation for ING.

DOMESTIC BANKING OPERATIONS

ING's domestic banking operations provide a wide array of banking products
and services to individual and corporate customers in the Netherlands.
Individual products include consumer loans, mortgage loans, funds transfer,
electronic banking, personal financial services, credit and debit cards, and
savings and other deposit accounts. Products and services provided to corporate
customers include corporate loans, cash management, funds transfer and payment
systems, foreign exchange and leasing.

The following sets forth certain data with respect to the Dutch banking
operations of ING for the year ended December 31, 1996.

(NLG BILLIONS,
EXCEPT STATISTICAL DATA)
------------------------

Total loans............................. 143
Mortgage loans.......................... 79
Customer deposits....................... 141
Number of domestic branches............. 414
Number of ATMs.......................... 1,500

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ING is the largest provider of payments transfer services in the Dutch
market, with a market share of 48% in 1995 based on transaction volume. ING is
the second largest provider of residential mortgage loans in the Dutch retail
market, with a market share of 23% based on total outstanding mortgage loans,
and is the third largest provider of loans in the Dutch corporate market, with a
market share of 17.1% in 1995 based on total outstanding corporate loans in
guilders.

ING provides its banking services in the Netherlands principally through
two branded entities, Postbank, which reaches its 6.3 million private customers
via home banking, telephone, mailing, electronic banking and through a
nationwide network of approximately 2,300 post offices, and IBN, which conducts
its business through approximately 390 branch offices. ING also provides banking
services through three smaller wholly-owned banking subsidiaries,
Westland/Utrecht Hypotheekbank, ING Lease and Crediet en Effectenbank N.V.,
which provide more specialized services and products. Using direct marketing
methods, Postbank has utilized its position as a leading provider of current
account services and payment systems as the basis for supplying other financial
services, such as savings accounts, mortgage loans, consumer loans, credit card
services, insurance products and security orders. As approximately 60% of Dutch
households have a financial relationship with Postbank and Postbank has a market
share of approximately 43% in Dutch payment transfers, based on transaction
volume, ING believes that Postbank's large client database and market presence
provide it with significant opportunities for marketing additional financial
products and services. At the end of 1996, Postbank had NLG 37.5 billion in
savings accounts, NLG 24.5 billion in residential mortgage loans outstanding,
NLG 15 billion in payment account balances and NLG 3 billion in outstanding
consumer credits. In 1996, gross premium income from insurance products sold
through the direct marketing channel of Postbank represented 4.6% of ING's total
life premiums written in the Netherlands.

IBN offers a complete package of financial services to large, medium and
small-sized companies and institutions, as well as self-employed and other
individuals. IBN primarily targets customers that require personal advice and
service. IBN has a staff of 8,500 and its commercial activities are divided into
six customer groups: corporate banking, private banking, SME-market (small and
medium-sized enterprises), large enterprises, personal market and payments
transfer. IBN provides a full range of commercial banking activities and also
life and non-life insurance products. IBN's total domestic portfolio of loans
amounted to NLG 85 billion at the end of 1996, NLG 32 billion of which
represented the residential mortgage portfolio. In 1996, individual periodic
life insurance premiums sold through IBN represented 9% of the new individual
periodic life premiums written by Nationale-Nederlanden.

INTERNATIONAL BANKING

ING's international corporate banking activities are centralized at IBI,
which had a network of 77 branches in 48 countries outside the Netherlands at
the end of 1996. IBI's activities are organized into Emerging Markets Banking,
International Corporate Banking and Financial Institutions Banking. Emerging
Markets Banking, conducted through local branch offices, includes payments and
transfers handling, treasury products, capital market transactions, local
corporate finance activities, import/export finance, cross border finance, LDC
debt trading, debt conversion and debt reduction transactions as well as
advisory services. In International Corporate Banking, IBI focuses on trade and
commodity finance, natural resources finance, export finance, power plant
finance, telecommunications finance, media finance, international loan
syndications, asset-backed finance and structured finance. In the area of
Financial Institutions Banking, IBI is engaged in commercial activities for
financial institutions in emerging markets (relationship management) and OECD
markets, interbank trade finance, loan and letter of credit syndications with
financial institutions, lending to financial institutions and interbank payment
and clearing services. At December 31, 1996, the total international loan
portfolio was NLG 51.2 billion.

Investment banking activities are principally conducted by ING Barings,
which consists of the investment banking activities previously conducted by ING
Bank and Barings. Acquired in March 1995, Barings is now fully integrated into
the ING organization. Barings' research and investment banking activities are
included within ING's corporate and investment banking activities as ING
Barings. ING Barings is organized along five product lines worldwide, with
strong local and regional management. The

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five product lines include Equity and Research (principally emerging markets),
which encompasses research, brokerage, trading and sales coordination; Corporate
Finance (emerging markets), which encompasses equity and debt underwriting as
well as advisory services, in particular related to cross-border mergers and
acquisitions; Corporate Finance (developed markets), which encompasses
acquisitions, dispositions, mergers and equity issues as well as advisory
services, in particular related to companies' capital structures and strategy
issues; Debt and Derivatives Trading and Sales, which principally encompasses a
broad range of trading and sales in emerging market debt securities, equity and
debt derivatives and other financial products; and Banking, Structured Finance
and Advisory, which encompasses debt advisory services, securitization and
private placements.

ING also conducts RETAIL BANKING operations in Australia, Belgium, Canada,
Greece, Hungary, Italy and Poland. ING's most recent acquisitions of retail
banks in Poland (1994) and Hungary (1996) are part of ING's strategy to provide
integrated financial services in these markets and utilize BANCASSURANCE for
distribution of insurance products.

ASSET MANAGEMENT

At December 31, 1996, ING had over NLG 246 billion in assets under
management. ING Asset Management manages the assets of the insurance operations
within ING, as well as the assets comprising ING's own-label and third party
investment funds and third party institutional and individual assets. ING Asset
Management also manages the investments representing a portion of shareholders'
equity of ING Insurance.

The following table sets forth information with respect to the assets under
management for the years indicated.

AS OF DECEMBER 31,
------------------------
1996 1995 1994
---- ---- ----
(NLG BILLIONS)

Own Funds(1)......................................... 118 96 83
Third Party Funds(2)................................. 128 113 42
--- --- ---
Total...................................... 246 209 125

- ---------------

(1) See "ING RISK MANAGEMENT -- Investments".

(2) Growth in Third Party Funds in 1995 due principally to the acquisition of
Baring Asset Management.

ING Asset Management consists of seven business units of which ING
Investment Management and Baring Asset Management account for over 90% of total
assets under management.

Assets under management by ING Investment Management amounted to NLG 158.4
billion at December 31, 1996. Assets under management on behalf of the insurance
operations amounted to NLG 104.4 billion at December 31, 1996. Assets under
management on behalf of private and institutional clients amounted to NLG 32.7
billion and own-label investment funds amounted to NLG 21.3 billion at December
31, 1996.

Baring Asset Management provides a diversified spectrum of investment
management services to a variety of institutional and private clients, directly
and through the management of its own-label investment funds. It manages equity,
fixed-interest and balanced portfolios for pension funds, government agencies,
charitable bodies, companies and private individuals. As of December 31, 1996,
nearly 75% of its clients were in the United Kingdom and North America. Total
assets under management by Baring Asset Management amounted to NLG 70 billion at
December 31, 1996.

In addition to its asset management activities, ING also operates an
international private banking business, a real estate business which invests in
and develops real estate in the Netherlands and internationally and businesses
which specialize in private equity investments.

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STRATEGY

GENERAL

ING has a number of characteristics which set it apart from its competitors
in the Netherlands and internationally and which contribute generally to the
strength of ING. Its strong domestic market position in insurance and banking
has provided it with stable earnings and cash flow enabling it to finance its
international expansion. As a result of the merger and the integration of the
Dutch insurance and banking operations and resulting access to multiple
distribution channels, ING has been able to maintain and, in some cases, grow
its market share in the Netherlands despite intense competition. In addition to
the strength of its core domestic markets, over the last 20 years ING has
successfully developed its greenfield life strategy in which it has elected to
expand internationally through the start-up of life operations in 14 countries
through 1997. Besides its strength in its core Dutch markets and its greenfield
strategy, ING is also distinguished by its acknowledged position as an emerging
market specialist, with ING's strength in emerging markets being enhanced by its
acquisition of the principal assets and liabilities of Barings in 1995.

At the time ING was formed in 1991, ING's stated strategic objectives were:
to become the market leader in providing integrated financial services in its
home market of the Netherlands, including maintaining its leading position in
the life and non-life insurance markets and expanding its banking operations; to
expand its presence in Europe; to expand its international banking operations
and strengthen its position as one of the leading providers of financial
services in emerging markets; and to enhance ING's performance in its other
existing mature markets of North America and Australia and its existing
greenfield operations. These stated strategic objectives were to be achieved
within the overall context of enhancing shareholder value through the
establishment of stated objectives relating to annual earnings growth and
returns on equity with an increasing emphasis on cost control.

ING's objectives include growth in net profit at the ING level of at least
10% per annum and return on equity targets (measured as 4% above the 10 year
interest rate on Dutch government bonds). ING has met or exceeded its net profit
and return on equity objectives in each year since 1993. Net profit grew at
annual rates of 10.9%, 13.5%, 15.1%, and 25.4%, in 1993, 1994, 1995 and 1996,
respectively. Return on equity (consolidated net profit, as a percentage of
average consolidated shareholders' equity, on a Dutch GAAP basis) in each of
1993, 1994, 1995 and 1996 was 10.9%, 10.6%, 11.6% and 11.5%, respectively. In
interpreting the return on equity ratios, it should be noted that in the
Consolidated Financial Statements prepared in accordance with Dutch GAAP,
certain material changes in shareholders' equity are not reflected in the profit
and loss account. See Note 7 of Notes to the Consolidated Financial Statements.
There can be no assurance that ING will continue to exceed its financial
objectives. In addition to measuring ING's financial performance on the basis of
the objectives described above, ING utilizes its net profit and return on equity
targets when considering investments such as acquisitions and the establishment
of greenfield operations. Although management believes that such criteria should
be applied when considering such investments, management also believes that
competitive considerations and long term goals, including long term
profitability, are also important considerations.

In furtherance of its strategic objectives to maintain its competitive
position and continue to achieve such earnings growth and return on equity
objectives, particularly in less favorable market conditions than have existed
in recent years, ING's strategic priorities are to:

- Maintain its position in its core market of the Netherlands and continue
to extend its leadership in integrated financial services
(bancassurance) in the Netherlands, and, where possible and profitable,
outside the Netherlands.

- Maintain its leading position in the emerging markets of South America,
Asia and Central and Eastern Europe by further developing life insurance
greenfields and continuing its investments in commercial and investment
banking and asset management.

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- In ING's mature markets outside the Netherlands, reinforce its position
in insurance and banking, including actively reviewing potential
insurance acquisition opportunities in the U.S. to strengthen such
operations.

- Give greater priority to Western Europe now that EMU and the
introduction of the single currency are scheduled for 1999 with the goal
of ensuring that ING will be an important player in the European
financial services market, including by way of acquisitions or through
strategic alliances.

- Continue development of its asset management businesses, including
growth in assets under management on behalf of third parties.

- Further integrate its international corporate and investment banking
operations to enhance their effectiveness and the delivery of financial
services and products, particularly in emerging markets, and selective
expansion of investment banking activities, particularly in Europe.

MAINTAIN ITS POSITION IN THE NETHERLANDS AND EXTEND LEADERSHIP IN INTEGRATED
FINANCIAL SERVICES

Operations in the Netherlands

ING is the largest life insurer, second largest non-life insurer and third
largest bank in the Netherlands with leading market share positions in many of
the products and services it provides. It is ING's intention to defend its
market share positions in the Netherlands while maintaining profitability. It
will seek to do this through expansion of its product lines, offering better
service and continuing to exploit its multiple distribution channels.

ING has combined its broad expertise in insurance, banking and asset
management to offer a full range of financial services through its distribution
channels in the Netherlands and is the leading provider of integrated financial
services in the Dutch market. As a result of the merger, ING obtained access to
broader distribution channels for its insurance products beyond its traditional,
principal distribution channels of independent and tied agents, and is currently
able to utilize the bancassurance channel via ING Bank and is also able to
distribute its products through the Postbank direct marketing channel. In 1996,
individual periodic life insurance premiums sold through IBN represented 9% of
the new individual periodic life premiums written by Nationale-Nederlanden and
life gross premiums written for life products sold through the direct marketing
channel of Postbank represented 4.6% of ING's gross life premiums written in the
Netherlands.

IBN, while continuing to focus on its traditional corporate (small and
medium-sized (SME) enterprises) and retail clients, is also now targeting all
segments of the corporate and retail population, including in particular those
that seek and require personal advice on more complex products, by offering a
broader range of financial products besides its traditional banking products. In
implementing this strategy in the Netherlands, IBN is taking steps which are
intended to: (i) increase its domestic market share, particularly by focusing on
the corporate market where IBN has historically been behind its principal
competitors; (ii) lower its cost of distribution and therefore lower ING Bank's
cost to income ratio by utilizing direct marketing programs in addition to the
traditional branch network; (iii) increase non-interest revenues by cross
selling to existing clients non-lending products; and (iv) grow ING Bank's
private banking business. ING believes that IBN's ability to offer a complete
financial planning service and products (including insurance and asset
management) enhances its position with its targeted clientele. Furthermore,
ING's expanded presence throughout the world and higher profile since the
acquisition of Barings has given it broader access to a large corporate client
base which had not previously been available to it.

Postbank's strategy, in contrast to that of IBN, is to offer relatively
simple savings products together with mortgage and personal lending, as well as
insurance and investment products, principally to a clientele which does not
seek or require personal advice. Its low cost distribution network which relies
primarily on direct marketing and the more than 2,300 branches of the post
office for providing its

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services and its large client base allows it to target its various services,
including non-banking services such as brokerage, insurance and asset management
through cross selling to existing clients. At December 31, 1995, Postbank Life
Insurance had risen to become the 18th largest life insurer in the Netherlands
based on gross premiums written, compared to the 41st largest at December 31,
1994.

Outside the Netherlands

Outside the Netherlands, it is ING's strategy to provide integrated
financial services and utilize bancassurance in those markets where ING believes
such operations can be profitable. ING has insurance operations in 25 countries
around the world, 14 of which were started as greenfield life operations. In
many of its emerging market countries, ING has established links with, or
acquired interests in, a local commercial bank as an alternative means of
distributing its insurance products and to provide a source for distribution of
bank products. ING has recently acquired interests in banks in Hungary and
Poland consistent with this strategy. In addition to commercial banking, ING
also intends to establish local asset management companies where appropriate. In
Poland, since acquiring a minority stake in Bank Slaski in 1994 (in 1996 ING
acquired a majority stake in Bank Slaski) and establishing a greenfield life
insurance operation in 1995, ING is now offering products and services which
include insurance, banking, leasing, investment and real estate. ING is
following a similar strategy in Hungary. In addition to emerging markets,
bancassurance and alternative channels for distributing financial services will
be used where possible. These have been utilized in Australia, Belgium and
Greece, and ING will shortly be marketing banking products through a direct
marketing channel in Canada.

Information Technology

ING believes that the use of information technology has become an
increasingly important factor in maintaining and enhancing its market positions
in the Netherlands and abroad and providing integrated financial services. In
recent years ING has made significant investments in upgrading and enhancing its
information systems. ING has developed an overall plan to develop new (or
updated) products using modern information technology, including (where
permitted) access across its various business entities to information about its
clients, increasing operational efficiency (e.g., utilizing information systems
to approve insurance applications and reduce paperwork), upgrading accounting
and financial systems, and preparing systems to cope with the potentially
adverse effects on computer systems of reaching the year 2000 and the
introduction of the euro. In the last three years, ING has spent in excess of
NLG 5 billion in the information technology area. Management believes that
enhanced information technology systems will reduce the costs of distribution of
its various products and enable it to provide better service to its clients.

MAINTAIN LEADERSHIP POSITION IN EMERGING MARKETS

ING's strengths in emerging markets are based mainly on its life insurance
operations and its commercial and investment banking operations. ING's strategy
in this area is to strengthen its acknowledged position as an emerging markets
specialist by further developing its life insurance greenfields and investing in
commercial and investment banking and asset management, and maintaining its
extensive investment research on emerging markets. ING intends to advance its
position in the life insurance market by undertaking two to three greenfield
projects per year and broadening the product range of greenfields and
ex-greenfields which have been operating successfully for a number of years.
Management believes that these operations represent significant areas for
potential growth with targets for a market share of at least 5% in emerging
markets, where life premiums per capita are significantly lower than in ING's
more developed markets. In a number of its recent greenfield operations, ING is
already exceeding this target, with notable recent successes in Hungary and
Poland. It expects to commence operations in the Philippines and Romania during
1997.

With an international network outside the Netherlands of 77 branches in 48
countries, including 32 in the emerging markets of South America, Asia and
Central and Eastern Europe, IBI provides a broad range of WHOLESALE BANKING
PRODUCTS to customers worldwide. Together with ING Barings, which is organized

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along product lines, ING provides a full range of services and products to local
clients and multinational clients doing business in emerging markets. Despite
their strong position in these markets, as a result of increased competition,
ING intends to take a number of steps to further improve profitability. First it
intends to further integrate the operations of IBI and ING Barings to obtain
further efficiencies. In that regard, ING intends to reorganize its Corporate &
Investment Banking management centre along product lines to streamline reporting
and responsibility and eliminate existing overlap within the various businesses
and to offer its products and services under the single brand name "ING
Barings". In addition, ING plans to restructure its research activities to place
greater emphasis on sector analysis and on improving the profitability of equity
brokerage and trading and corporate finance in emerging markets to bring it into
line with Group-wide objectives.

REINFORCE AND STRENGTHEN POSITION IN EXISTING MATURE MARKETS OUTSIDE THE
NETHERLANDS

ING has substantial insurance operations in the United States, Canada,
Australia, Japan and Belgium and also generates significant income from the
provision of investment banking services and trading and sales in the United
Kingdom and the United States. It is ING's intention to maintain its current
positions and, where necessary, reinforce them by acquisition, through the
formation of strategic alliances and expansion of product lines and existing
distribution channels.

In the United States, ING recognizes that the life operations are working
in markets with only modest growth prospects and that its product range and
distribution channels are limited. As a result, ING is actively reviewing
potential acquisition opportunities in the United States market to broaden its
product ranges, expand its distribution channels and operate in markets with
stronger growth prospects. In Canada, ING intends to continue to pursue
opportunities to strengthen its non-life insurance business which currently has
a market share in excess of 6%, making it the second largest non-life insurance
company in Canada. In addition, ING has obtained a license to establish a
federal trust company which will enable it to market savings and consumer
lending products using direct response marketing.

In Australia, ING has followed its strategy of providing integrated
financial services through multiple distribution channels, including offering
banking products through the intermediary distribution networks of its main
insurance companies. Through acquisitions made in 1995 and 1996, the Australian
operations expanded their product lines and distribution capabilities as well as
increasing business. As an ex-greenfield, the Japanese life business generated
premium income of NLG 1,281 million in 1996. Although representing only a small
percentage of the overall life market which is the largest in the world, ING
intends to further penetrate this market by expanding its distribution
capabilities. During 1996, the Japanese operations began developing a tied
agency distribution network to supplement its existing independent agent network
and to expand its product line to include more risk products with longer terms.

As a result of the implementation of EMU and the adoption of the euro,
which is expected to be introduced in 1999, ING has determined that the EU must
now be given a higher priority in ING's overall strategy with the goal of
becoming an important player in the European financial services market. Although
ING is still refining its strategy, ING will seek to target specific areas which
it considers offer the greatest growth potential and in which ING has expertise
such as direct marketing, employee benefits, corporate finance and clearing and
asset management for development Europe-wide. ING will seek to implement its
strategy by way of acquisitions or through strategic alliances.

DEVELOPMENT OF ASSET MANAGEMENT

ING believes that asset management, particularly third party asset
management activities, presents attractive growth opportunities and ING has
established a goal of becoming one of the world's leading providers of asset
management services for institutional, private and retail clients. As a result
of its insurance activities in the Netherlands and the acquisition of Barings
(which included Baring Asset Management) in 1995, ING is strongly positioned in
the Netherlands and well positioned in the U.K. At the end of 1996, ING Asset
Management had NLG 246 billion of assets under management consisting of

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NLG 128 billion for third parties. ING's strategy is to better utilize the
investment expertise it has developed in the Netherlands to increase assets
under management for third parties and to expand asset management
geographically. As more fully described under "ING BUSINESS
OPERATIONS -- Management Structure", all asset management activities are
coordinated through ING Asset Management. It is the current intention to have
investment activities for the insurance companies and in emerging markets
managed from the Netherlands with Baring Asset Management remain separate.
Baring Asset Management will be the principal vehicle for developing third party
asset management particularly in its existing markets of the United Kingdom, the
United States and Japan. Management believes that Japan offers growth
opportunities with deregulation of management of pension funds offering
prospects for obtaining international and specialist mandates.

DEVELOPMENT OF INVESTMENT BANKING

Since the acquisition of Barings in 1995, ING has integrated the former
investment banking activities of ING Bank with Barings and capitalized on the
strong positions IBI and Barings have in emerging markets. At the time of the
acquisition ING recognized that Barings would provide it with strong equity
capabilities and research in emerging markets which would fit well with IBI's
existing strong international debt and foreign exchange business in these
markets. In addition, the Barings acquisition enhanced ING's investment banking
capabilities in Europe, particularly its capability of providing advisory
services.

ING's strategy for its corporate and investment banking activities is to:

- Strengthen its position in the emerging markets of South America,
Central and Eastern Europe and Asia where it is recognized as a leader;

- Capitalize on Barings' strength in the United Kingdom mergers and
acquisitions market and export this expertise selectively throughout
Europe and particularly in the Netherlands;

- Selectively expand in Europe with a principal focus on fixed interest
securities, including augmenting sales and distribution capabilities,
while targeting specific market areas for equity origination;

- Increase its focus on relationship banking, particularly for
multinational clients; and

- Generally enhance its distribution capabilities in the United Kingdom
and United States.

As described above, ING's strategy in this area will be implemented in part
through its planned reorganization which will decentralize management and
reorganize the organization along product lines to enhance responsibility and
controls. See "ING BUSINESS OPERATIONS -- ING Corporate & Investment Banking".

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CAPITALIZATION OF ING

Set forth below is the short-term debt and historical consolidated
capitalization of ING as of December 31, 1996.

DECEMBER 31, 1996
------------------
NLG USD(1)
------- -------
(IN MILLIONS)

Short-term debt......................................................... 248,432 126,557
======= =======
Long-term debt.......................................................... 43,606 22,214
Subordinated loans...................................................... 1,068 544
Minority interests...................................................... 470 239
Shareholders' equity
Preferred Shares...................................................... 218 111
Ordinary Shares....................................................... 786 400
Other surplus reserves................................................ 33,120 16,872
Total shareholders' equity......................................... 34,124 17,384
------- -------
Total Capitalization.......................................... 79,268 40,381
======= =======

- ---------------

(1) Dutch guilder amounts have been translated into dollars, solely for
convenience of the reader, at the Noon Buying Rate on June 30, 1997 of NLG
1.9630 to $1.00 (50.94 U.S. cents per guilder).

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SELECTED CONSOLIDATED FINANCIAL DATA OF ING

The selected consolidated financial data set forth below are derived from
ING's Consolidated Financial Statements and the Notes thereto. Such Consolidated
Financial Statements have been audited by Moret Ernst & Young Accountants, ING's
independent accountants, except for the financial statements of ING Bank N.V., a
direct wholly-owned subsidiary, which statements (based on ING accounting
principles and after ING eliminations and adjustments) reflect total assets
constituting 63% in 1996, 61% in 1995, 61% in 1994, and 60% in 1993, and total
income constituting 24% in 1996, 23% in 1995, 21% in 1994, and 20% in 1993 of
the related consolidated totals, which were audited by KPMG Accountants N.V. The
financial data for the six-month periods ended June 30, 1997 and 1996 are
derived from unaudited financial statements. The unaudited financial statements
include all adjustments, consisting of normal recurring accruals, which ING
considers necessary for a fair presentation of its financial position and
results of operation for these periods. Operating results for the six months
ended June 30, 1997 are not necessarily indicative of the results that may be
expected for the entire year ending December 31, 1997.

ING's consolidated financial statements are prepared in accordance with
Dutch GAAP, which differs in certain significant respects from U.S. GAAP.
Reference is made to Note 7 of Notes to the Consolidated Financial Statements
for a description of the significant differences between Dutch GAAP and U.S.
GAAP and a reconciliation of certain income statement and balance sheet items to
U.S. GAAP.

The information below should be read in conjunction with, and is qualified
by reference to ING's Consolidated Financial Statements, related Notes, and
other financial information included elsewhere herein.

SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------------- --------------------------
1996 1996 1995 1994 1993 1992 1997 1997 1996
------ ------ ------ ------ ------ ------ ------ ------ ------
USD NLG NLG NLG NLG NLG USD NLG NLG
(IN MILLIONS, EXCEPT AMOUNTS PER SHARE AND RATIOS)

DUTCH GAAP CONSOLIDATED INCOME
STATEMENT DATA
Income from insurance operations:
Gross premiums written:
Life.............................. 8,729 17,135 14,844 13,974 13,569 11,215 5,445 10,689 7,867
Non-life.......................... 3,661 7,187 6,667 6,403 6,202 6,287 2,130 4,182 3,777
Reinsurance(1).................... -- -- -- -- 561 2,538 -- -- --
------ ------ ------ ------ ------ ------ ----- ------ ------
Total............................... 12,390 24,322 21,511 20,377 20,332 20,040 7,576 14,871 11,644
Investment income................... 5,641 11,073 9,605 8,202 8,923 8,347 3,446 6,765 5,241
Commission and other income......... 240 472 364 345 327 321 144 283 239
------ ------ ------ ------ ------ ------ ----- ------ ------
Total income from insurance
operations........................ 18,272 35,867 31,480 28,924 29,582 28,708 11,166 21,919 17,124
Income from banking operations:
Interest income..................... 10,318 20,255 18,371 17,788 17,767 18,488 5,721 11,230 9,448
Interest expense.................... 6,625 13,004 12,113 11,500 12,319 13,397 3,710 7,283 6,055
------ ------ ------ ------ ------ ------ ----- ------ ------
Net interest result................. 3,694 7,251 6,258 6,288 5,448 5,091 2,011 3,947 3,393
Commission.......................... 1,348 2,647 1,980 1,368 1,258 1,023 837 1,644 1,288
Other Income........................ 926 1,818 1,519 511 1,071 784 626 1,229 828
------ ------ ------ ------ ------ ------ ----- ------ ------
Total income from banking
operations........................ 5,968 11,716 9,757 8,167 7,777 6,898 3,474 6,820 5,509
Total income(2)....................... 24,224 47,551 41,203 37,048 37,359 35,606 14,632 28,722 22,624
====== ====== ====== ====== ====== ====== ===== ====== ======

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Expenditure from insurance operations:
Life................................ 12,382 24,306 20,832 18,814 18,967 16,058
Non-life............................ 3,793 7,445 6,972 6,728 6,667 6,775
Reinsurance(1)...................... -- -- -- -- 702 2,974
Insurance operations--general(3).... 824 1,618 1,570 1,548 1,720 1,526
------ ------ ------ ------ ------ ------ ------ ------ ------
Total expenditure from insurance
operations.......................... 16,999 33,369 29,374 27,090 28,056 27,333 10,457 20,527 15,962
Total expenditure from banking
operations(4)....................... 4,882 9,583 8,005 6,658 6,439 5,847 2,764 5,426 4,490
Total expenditure(2).................. 21,864 42,920 37,345 33,705 34,495 33,180 13,212 25,936 20,443
====== ====== ====== ====== ====== ====== ====== ====== ======
Result before taxation from insurance
operations:
Life................................ 615 1,207 1,097 953 829 736 338 663 587
Non-life............................ 223 437 339 295 191 151 135 266 187
Reinsurance(1)...................... -- -- -- -- (32) (37) -- -- --
Insurance operations--general(3).... 435 854 670 586 538 525 236 463 388
------ ------ ------ ------ ------ ------ ------ ------ ------
Total................................. 1,273 2,498 2,106 1,834 1,526 1,375 709 1,392 1,162
====== ====== ====== ====== ====== ====== ====== ====== ======
Result before taxation from banking
operations.......................... 1,087 2,133 1,752 1,509 1,338 1,051 710 1,394 1,019
------ ------ ------ ------ ------ ------ ------ ------ ------
Result before taxation and dividend on
own shares.......................... 2,359 4,631 3,858 3,343 2,864 2,426 1,419 2,786 2,181
Dividend on own shares................ (37) (72) (58) (51) (43) (40) (25) (49) (32)
------ ------ ------ ------ ------ ------ ------ ------ ------
Result before taxation................ 2,322 4,559 3,800 3,292 2,821 2,386 1,394 2,737 2,149
Taxation.............................. 613 1,203 1,138 994 778 561 391 768 629
Third-party interests................. 18 35 13 (4) 14 (4) 14 27 6
------ ------ ------ ------ ------ ------ ------ ------ ------
Net profit............................ 1,692 3,321 2,649 2,302 2,029 1,829 989 1,942 1,514
Dividend on Preference Shares......... 23 46 46 46 28 -- 12 23 23
------ ------ ------ ------ ------ ------ ------ ------ ------
Net profit after deducting dividend on
Preference Shares................... 1,668 3,275 2,603 2,256 2,001 1,829 977 1,919 1,491
Dividend on Ordinary Shares........... 795 1,561 1,203 1,036 920 820
Addition to shareholders' equity...... 873 1,714 1,400 1,220 1,081 1,009
Net profit per Ordinary Share(5)...... 2.32 4.56 3.84 3.48 3.20 3.02 1.30 2.55 2.12
Net profit per Ordinary Share and
Ordinary Share equivalent........... 2.21 4.34 3.67 3.40 3.09 n.a. 1.25 2.46 2.03
Dividend per Ordinary Share........... 1.02 2.00 1.66 1.49 1.39 1.27
Dividend pay-out ratio................ 43.9% 43.9% 43.2% 43.0% 43.4% 41.9%
U.S. GAAP CONSOLIDATED INCOME
STATEMENT DATA
Net profit............................ 2,381 4,673 3,207 1,244 2,442
Net profit per Ordinary Share and
Ordinary Share equivalent........... 3.13 6.14 4.46 1.58 3.10

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SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------------- ---------------------------
1996 1996 1995 1994 1993 1992 1997 1997 1996
------ ------ ------ ------ ------ ------ ------- ------ ------
USD NLG NLG NLG NLG NLG USD NLG NLG
(IN BILLIONS, EXCEPT AMOUNTS PER SHARE AND RATIOS)

DUTCH GAAP CONSOLIDATED BALANCE SHEET
DATA
Total assets......................... 246.5 483.9 396.3 353.7 339.4 322.9 288.9 567.1 439.3
Investments:
Insurance.......................... 77.4 152.0 129.1 112.5 109.6 103.3
Banking............................ 21.1 41.5 28.3 25.8 22.5 24.4
Eliminations(6).................... (2.5) (5.0) (3.6)
------ ------ ------ ------ ------ ------ ----- ------ ------
Total investments.................... 96.0 188.5 153.8 138.3 132.1 127.7 108.0 212.0 168.5
Bank lending......................... 102.8 201.8 166.5 150.1 144.9 138.1 122.6 240.7 184.6
Insurance provisions:
Life............................... 56.4 110.7 97.1 88.5 81.8 74.0
Non-life........................... 5.4 10.7 9.7 8.9 8.4 7.7
Reinsurance(1)..................... -- -- -- -- -- 5.7
------ ------ ------ ------ ------ ------ ----- ------ ------
Total insurance provisions......... 61.8 121.4 106.8 97.4 90.2 87.4 67.7 132.8 114.2
Funds entrusted to and debt
securities of the banking
operations:
Savings accounts of the banking
operations....................... 34.0 66.7 57.8 51.2 48.9 46.3
Other deposits and bank funds...... 56.1 110.2 96.5 91.7 88.8 85.9
Debt securities of the banking
operations....................... 14.3 28.0 22.1 17.1 17.1 15.6
------ ------ ------ ------ ------ ------
Total.............................. 104.4 204.9 176.4 160.0 154.8 147.8 123.5 242.4 193.0
Due to banks......................... 36.9 72.4 52.0 41.2 40.4 42.6 42.0 82.4 57.9
Shareholders' equity(7).............. 17.4 34.1 23.8 21.8 21.5 15.6 23.1 45.4 28.9
Shareholders' equity per Ordinary
Share(5)........................... 23.00 45.15 33.32 31.84 32.88 25.10 29.39 57.69 39.05
Shareholders' equity per Ordinary
Share and Ordinary Share
equivalent(5)...................... 21.95 43.08 31.92 31.15 31.70 n.a. 28.36 55.68 37.42
U.S. GAAP CONSOLIDATED BALANCE SHEET
DATA
Total assets......................... 258.6 507.7 413.1
Shareholders' equity................. 21.2 41.7 28.6 26.5 52.1
Shareholders' equity per Ordinary
Share and Ordinary Share
equivalent......................... 26.94 52.88 38.34 32.58 63.95

- ---------------

(1) In view of the relatively minor importance of ING's assumed reinsurance
activities, such activities have been included in the results of life and
non-life insurance as from the second quarter of 1993.

(4) Includes all non-interest expenditures, including value adjustments to
receivables of the banking operations. SEE "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION -- Recent
Developments" and "-- Liquidity and Capital Resources".

(5) Net profit per share amounts have been calculated based on the weighted
average number of Ordinary Shares outstanding and shareholder's equity per
share amounts have been calculated based on the number of Ordinary Shares
outstanding at the end of the respective periods. For purposes of this
calculation, ING Groep N.V. shares held by Group companies have been
deducted from the applicable number of outstanding Ordinary Shares. All
amounts are presented after giving effect to all stock dividends and
retroactive application of ING's 2.5 for 1 stock split, which was effective
June 3, 1996.

(6) Consisting of investments in banking operations held by Group insurance
companies, investments in insurance operations held by Group banking
companies, and ING Groep N.V. shares held by Group insurance companies.

(7) Shareholders' equity as at December 31, 1995 after a charge, net of tax, of
NLG 1,025 million resulting from the implementation of the change in Dutch
accounting policies relating to the valuation principles for the provision
for life policy liabilities concerning longevity risk. This amount has been
charged to shareholders' equity as at January 1, 1995. Goodwill of NLG 1,400
million arising in connection with the acquisition of the principal assets
and liabilities of Barings was charged in full to shareholders' equity in
1995.

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ING MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION

The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and the related Notes thereto included
elsewhere herein. The Consolidated Financial Statements have been prepared in
accordance with Dutch GAAP, which differs in certain significant respects from
U.S. GAAP. Reference is made to Note 7 of Notes to the Consolidated Financial
Statements for a description of the significant differences between Dutch GAAP
and U.S. GAAP and a reconciliation of shareholders' equity and net profit to
U.S. GAAP. Unless otherwise indicated, financial information for ING included
herein is presented on a consolidated basis under Dutch GAAP.

INTRODUCTION

Since 1991, when it was created as a result of the merger between
Nationale-Nederlanden N.V. and NMB Postbank Groep N.V., ING has diversified the
mix of its businesses and has grown geographically through acquisitions, joint
ventures, direct investments and internal growth, including through the
development of insurance greenfield operations and the expansion of the bank
branch network in markets outside the Netherlands. Since 1992, ING has grown its
banking business and there has been an increasing emphasis on life insurance,
with total life income representing 70% of total insurance income in 1996
compared with 56% in 1992. In addition, funds under management by ING have grown
to NLG 246 billion in 1996, from NLG 101 billion in 1992. ING has continued to
diversify in recent years, investing NLG 1.7 billion in connection with the
acquisition of the principal assets and liabilities of Barings in March 1995 and
NLG 156 million in connection with the acquisition of Wellington Insurance
Company, a Canadian non-life insurance company ("Wellington"), in January 1995.
Geographically, ING has continued its policy of establishing new greenfield life
insurance operations in emerging markets. At the end of July 1996, ING also
obtained a majority interest of 54.1% in Bank Slaski S.A., located in Katowice,
Poland ("Bank Slaski").

The following table shows the relative contributions of ING's two business
segments to consolidated result before taxation and dividends on own shares in
1996 compared to 1992.

YEAR ENDED DECEMBER 31,
---------------------------------------
1996 1992
----------------- -----------------
(NLG MILLIONS) (NLG MILLIONS)

Insurance.......................................... 2,498 54% 1,375 57%
Banking(1)......................................... 2,133 46 1,051 43
----- --- ----- ---
Total......................................... 4,631 100% 2,426 100%

- ---------------

(1) Includes the effect of value adjustments to receivables of the banking
operations which consist of a charge to ING's profit and loss account in
respect of the estimated risk inherent in ING's banking operations and which
include additions to the provision for loan losses and to the provision for
general banking risks. See "-- Recent Developments" and "-- Liquidity and
Capital Resources -- Capital Adequacy" and Notes 3.2.4 and 7.1(r) of Notes
to the Consolidated Financial Statements.

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The following table shows the relative contributions of ING's insurance and
banking operations in the Netherlands, the Rest of Europe, North America, South
America, Asia, Australia, and Other geographic areas to ING's consolidated
result before taxation in 1996 compared to 1992.

YEAR ENDED DECEMBER 31,
----------------------------------------
1996 1992
----------------- -----------------
(NLG MILLIONS) (NLG MILLIONS)

The Netherlands
Insurance Operations.................................. 1,620 28% 873 26%
Banking Operations.................................... 2,334 41 1191 36
Rest of Europe
Insurance Operations.................................. 164 3 (41) (1)
Banking Operations.................................... 309 5 151 5
North America
Insurance Operations.................................. 491 8 368 11
Banking Operations.................................... 162 3 302 9
South America
Insurance Operations.................................. 20 0 16 0
Banking Operations.................................... 286 5 183 6
Asia
Insurance Operations.................................. 92 2 23 1
Banking Operations.................................... 173 3 107 3
Australia
Insurance Operations.................................. 92 2 101 3
Banking Operations.................................... 5 0 0
Other................................................... 13 0 35 1
------- ---- ----- ----
Total (before value adjustments to receivables of
banking operations)................................... 5,761 100% 3,309 100%
Value adjustments to receivables of the banking
operations............................................ (1,130) (883)
------- -----
Result before taxation and dividends on own shares...... 4,631 2,426
======= =====

FACTORS AFFECTING RESULT FROM OPERATIONS

ING's result from operations are affected by demographics (particularly
with respect to life insurance) and by a variety of market conditions, including
economic cycles, insurance industry cycles (particularly with respect to
non-life insurance), banking industry cycles and fluctuations in interest and
foreign exchange rates. Although management expects these factors will continue
to affect ING's result from operations, management believes that the impact of
any one of these factors, other than fluctuations in exchange rates, has been
and continues to be reduced by ING's expansion into different geographic
markets. Management further believes that the impact of economic cycles and
insurance and banking industry cycles will increasingly be diminished by the
increased proportion of ING's revenues derived from fee generating investment
banking and asset management activities. ING's geographic expansion, however,
has increased the effect of fluctuations in exchange rates on ING's reported
results.

GENERAL MARKET CONDITIONS

Demographic studies suggest that over the next decade there will be growth
in ING's principal life insurance markets of the Netherlands, the Rest of
Europe, the United States and Australia, in the number of individuals who enter
the age group which management believes is most likely to purchase retirement-
oriented life insurance products. In addition, in a number of its European
markets, including the Netherlands, retirement, medical and other social
benefits previously provided by the government have

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been or are expected to be curtailed in the coming years, which management
believes will increase opportunities for private sector providers of life
insurance, health, pension and other social benefits-related insurance products.
Management believes that ING Insurance's distribution networks, the quality and
diversity of its products and its investment management expertise in each of
these markets positions ING Insurance to benefit from such developments. In
addition, the emerging markets in Central and Eastern Europe, Asia and Latin
America in which ING Insurance has insurance operations generally have lower
gross domestic products per capita and gross insurance premiums per capita than
the countries in Western Europe and North America in which ING Insurance has
insurance operations. Management believes that ING Insurance's development of
insurance greenfield operations in such emerging markets provides ING Insurance
with the market presence in Asia, Central and Eastern Europe and Latin America
that will allow it to take advantage of anticipated growth in such regions.
Conditions in the non-life insurance markets in which ING Insurance operates are
also cyclical, and characterized by periods of price competition, fluctuations
in UNDERWRITING RESULTS and the occurrence of unpredictable weather-related and
other losses.

Results and income from ING's investment banking, securities trading and
brokerage activities have fluctuated and may vary significantly from year to
year. In contrast, results and income from third-party asset management
activities, which have increased following the acquisition of Barings, have been
more stable. Conditions in the financial services markets in which ING operates
have been mixed in recent years. In 1993, investment banking, securities
trading, brokerage and asset management activities were stimulated by favorable
market conditions, including low, stable and predictable interest rates and
higher valuations for equities in both the United States and Europe. In 1994,
conditions in the investment banking and trading markets were less favorable,
due to a sharp increase in interest rates in late 1994 in many of ING's
principal markets, including the United States, the United Kingdom and the
Netherlands. Financial services activities benefitted strongly in 1995 and 1996
from improved capital markets in the United States and the United Kingdom, due
in part to a gradual and more predictable decline in interest rates in those
markets, although ING's capital markets and securities trading activities in
emerging markets were adversely affected by the Mexican peso crisis of December
1994 and subsequent general disruption of capital markets activities in various
emerging markets. In March 1995, ING acquired the principal assets and
liabilities of Barings, further strengthening its position in investment banking
and asset management, particularly in the area of emerging markets.

INTEREST RATES

Changes in prevailing interest rates (including changes in the difference
between the levels of prevailing short-term and long-term rates) can affect
ING's banking, insurance and financial services results. However, the future
profitability of ING will be affected by a variety of factors, and management
believes that recurring cyclical changes in prevailing interest rates and
changes in the difference between such levels are not likely to be a predominant
factor in the long-term profitability of ING.

Over the past several years, movements in both short- and long-term
interest rates have affected the level and timing of recognition of gains and
losses on securities held in ING's various investment portfolios. Generally, a
sustained period of lower interest rates will reduce the investment income yield
of the investment portfolios of ING's insurance and banking companies over time
as higher-yielding investments are called or mature and proceeds are reinvested
at lower rates. However, declining interest rates will increase realized and
unrealized gains on significant portions of pre-existing insurance investment
portfolios, and can lead to higher returns from ING's banking operations if
interest-earning assets reprice more slowly than interest-bearing liabilities or
the volume of average interest-earning assets grows as a result of higher
amounts of credit demand, assuming a positive interest rate spread. Conversely,
rising interest rates should over time increase investment income but may reduce
the market value of pre-existing investments in ING's portfolios. This can also
lead to higher returns from ING's banking operations if interest-earning assets
reprice faster than interest-bearing liabilities or the interest rate spread
widens, assuming these effects are not offset by lower volumes of average
interest-earning assets or a deterioration in the quality of ING's loan
portfolio or an increase in provisions for possible

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credit risks. Management believes that the diversity of ING's investment
portfolio and the geographic spread of its businesses tend to moderate the
effect of movements in interest rates in any one market.

The impact of interest rate fluctuations on ING's life insurance business
is reduced in part by product design which operates to partly or entirely
transfer the exposure to interest rate movements from ING to the policyholder.
Examples of such products include unit-linked individual policies and segregated
fund pension plans in group business. At December 31, 1996, approximately 15% of
ING Insurance's investment portfolio consisted of investments relating to
insurance policies where gains or losses arising from interest rate fluctuations
are largely for the risk of policyholders. In addition, in many markets ING
Insurance sells profit sharing life insurance policies, where profit sharing may
be based either on total profits or on excess interest margins. In both cases,
profit sharing may serve to moderate the impact of interest rate fluctuations on
ING's profit, by transferring a portion of total profits or excess interest
margins to policyholders. While product design reduces the interest rate
sensitivity of ING Insurance, changes in interest rates will impact such
business to the extent they result in changes to interest income and to the
extent they affect the levels of new product sales or surrenders and withdrawals
of business in force.

ING's investment banking, securities trading and brokerage activities are
significantly affected by the levels of activity in the securities markets,
which in turn may be affected by, among other factors, the level and trend of
interest rates. Results of ING's asset management activities may also be
affected by interest rates, since management fees are generally based on the
value of assets under management, which fluctuate with changes in the level of
interest rates.

EXCHANGE RATE FLUCTUATIONS

ING publishes its Consolidated Financial Statements in Dutch guilders.
Because a substantial portion of ING's income and expenses are denominated in
currencies other than guilders, ING has a financial reporting translation
exposure attributable to fluctuations in the values of these currencies against
the guilder. Fluctuations in the exchange rates used to translate these
currencies may have a significant impact on ING's reported result from
operations from year to year. The impact of these fluctuations in exchange rates
is mitigated to some extent by the fact that the revenues and related expenses,
as well as assets and liabilities, of each of ING's non-Dutch subsidiaries are
generally denominated in the same currencies. ING partially hedges against
fluctuations in the values of these foreign currencies against the guilder as a
means to reduce this impact. Net profit for 1996 was favorably affected by NLG
33 million as a result of higher exchange rates in 1996 relative to the exchange
rates in 1995. However, the net profit for 1995 had been reduced by NLG 115
million due to lower exchange rates in 1995 relative to the exchange rates in
1994. See "ING BUSINESS OPERATIONS -- Global Risk Management" for a discussion
of ING's management of foreign exchange rate-related risks.

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For each of the years 1996, 1995 and 1994, the year-end exchange rates
(which are the rates ING uses in the preparation of the Consolidated Financial
Statements for balance sheet items not denominated in guilders) and the average
annual exchange rates (which are the rates ING uses in the preparation of the
Consolidated Financial Statements for income statement items not denominated in
guilders) were as follows.

AVERAGE
------------------------------
1996 1995 1994
------ ------ ------

U.S. dollar.................................................. 1.6826 1.6024 1.8218
Australian dollar............................................ 1.3164 1.1909 1.3289
Belgian franc................................................ 0.0545 0.0545 0.0545
Canadian dollar.............................................. 1.2331 1.1678 1.3341
German mark.................................................. 1.1208 1.1202 1.1213
Pound sterling............................................... 2.6420 2.5335 2.7853
French franc................................................. 0.3298 0.3221 0.3281
Japanese yen................................................. 0.0155 0.0171 0.0178

YEAR-END
------------------------------
1996 1995 1994
------ ------ ------

U.S. dollar.................................................. 1.7410 1.6025 1.7350
Australian dollar............................................ 1.3865 1.1935 1.3465
Belgian franc................................................ 0.0545 0.0545 0.0545
Canadian dollar.............................................. 1.2715 1.1760 1.2360
German mark.................................................. 1.1224 1.1194 1.1202
Pound sterling............................................... 2.9580 2.4770 2.7125
French franc................................................. 0.3329 0.3273 0.3247
Japanese yen................................................. 0.0150 0.0156 0.0174

CHANGES IN THE COMPOSITION OF ING

In accordance with Dutch GAAP, Barings has been consolidated into ING's
Consolidated Financial Statements since March 1995. In 1995, Barings accounted
for NLG 852 million of ING's consolidated total income and NLG 4 million of its
consolidated results before taxation. In accordance with Dutch GAAP, Wellington
was consolidated into ING's Consolidated Financial Statements beginning January
1, 1995. During 1996, Wellington was integrated with other members of ING's
Canadian non-life operations. In 1995, Wellington contributed NLG 438 million to
ING's consolidated total income and NLG 14 million to its consolidated results
before taxation. A majority interest in Bank Slaski was obtained at the end of
July 1996. The results of Bank Slaski are included in ING's Consolidated
Financial Statements with effect from August 1, 1996.

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RECENT DEVELOPMENTS

OVERVIEW

Consolidated Results of Operations

The following table sets forth the consolidated results of operations of
ING for the six months ended June 30, 1997 and 1996.

SIX MONTHS
ENDED JUNE 30,
---------------
1997 1996
----- -----
(NLG MILLIONS)

Results before taxation:
Insurance operations...................................... 1,392 1,162
Banking operations........................................ 1,394 1,019
Dividend on own shares...................................... (49) (32)
----- ------
Results before taxation..................................... 2,737 2,149
Taxation.................................................... 768 629
Third-party interests....................................... 27 6
----- ------
Net profit.................................................. 1,942 1,514
Dividend on Preference Shares............................... 23 23
----- ------
Net profit after dividend on Preference Shares.............. 1,919 1,491

The following table sets forth the results before taxation of ING's
consolidated operations by geographical region for the six months ended June 30,
1997 and 1996.

SIX MONTHS
ENDED JUNE 30,
---------------
1997 1996
----- -----
(NLG MILLIONS)

The Netherlands............................................. 1,962 1,632
Rest of Europe.............................................. 217 28
North America............................................... 271 305
South America............................................... 156 92
Asia........................................................ 110 86
Australia................................................... 72 46
Other....................................................... (2) (8)
----- -----
2,786 2,181
Dividend on own shares...................................... (49) (32)
----- -----
Result before taxation...................................... 2,737 2,149

Total income of ING for the six months ended June 30, 1997 increased by NLG
6,098 million, or 27.0%, to NLG 28,722 million, from NLG 22,624 million for the
six months ended June 30, 1996. This increase reflected the increases in income
from the insurance and the banking operations of 28.0% and 23.8%, respectively.
Total expenditure for the six months ended June 30, 1997 increased by NLG 5,493
million, or 26.9%, to NLG 25,936 million, from NLG 20,443 million for the six
months ended June 30, 1996. This increase reflected increases in expenditure for
ING's insurance and banking operations of 28.6% and 20.8%, respectively.
Geographically, the increase in ING's results before taxation was mainly due to
increased results in the Netherlands and Rest of Europe.

Consolidated results before taxation for the six months ended June 30, 1997
increased by NLG 605 million, or 27.7% to NLG 2,786 million, from NLG 2,181
million for the six months ended June 30, 1996, reflecting increases of 19.8%
and 36.8%, respectively, in results from ING's insurance and banking operations.
ING's result before taxation after payment of dividend on own shares for the six
months ended June 30, 1997 increased by NLG 588 million, or 27.4%, to NLG 2,737
million, from NLG 2,149 million for the six months ended June 30, 1996.

ING's consolidated taxes of NLG 768 million for the six months ended June
30, 1997 and NLG 629 million for the six months ended June 30, 1996 represented
a decrease in the overall effective tax rate of 28.1% for the six months ended
June 30, 1997, from 29.3% for the six months ended June 30,

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1996. The statutory rates for ING's primary Dutch and other non-domestic
operating subsidiaries ranged from 16.5% to 47%. The difference between
statutory and effective rates was mainly due to a reduction in the taxes paid by
ING's Dutch insurance subsidiaries, for which the statutory rate was 35% and the
effective rate was 21.5% for the six months ended June 30, 1997.

The net profit before dividends on Preference Shares for the six months
ended June 30, 1997 increased by NLG 428 million, or 28.3%, to NLG 1,942
million, from NLG 1,514 million for the six months ended June 30, 1996. The
effect of exchange rate movements between the Dutch guilder and certain of ING's
primary operating currencies increased net profit by NLG 61 million for the six
months ended June 30, 1997.

The net profit after deducting dividends on Preference Shares for the six
months ended June 30, 1997 increased by NLG 428 million, or 28.7%, to NLG 1,919
million, from NLG 1,491 million for the six months ended June 30, 1996.

Consolidated Assets and Liabilities

The following table sets forth ING's consolidated assets and liabilities at
December 31, 1996 and June 30, 1997.

JUNE 30, DEC. 31,
1997 1996
-------- --------
(NLG BILLIONS, EXCEPT
PER SHARE AMOUNTS)

Investments........................................... 212.0 188.5
Bank lending.......................................... 240.7 204.4
Total assets.......................................... 567.1 486.4
Insurance provisions.................................. 132.8 121.4
Funds entrusted to and debt securities of the banking
operations.......................................... 242.4 204.9
Due to banks.......................................... 82.4 72.4
Total liabilities..................................... 521.7 451.0
Shareholders' equity............................. 45.4 35.4
Shareholders' equity per Ordinary Share.......... 57.69 46.83

Total assets increased by NLG 80.7 billion in the first six months, 1997,
or 16.6%, to NLG 567.1 billion, from NLG 486.4 billion at December 31, 1996. In
the same period, investments increased by NLG 23.5 billion, or 12.5%, of which
amount NLG 21.0 billion related to growth in insurance investments and NLG 2.5
billion related to the growth in banking investments.

Bank lending recorded growth of NLG 36.3 billion, or 17.8%, to NLG 240.7
billion at June 30, 1997. Of this amount NLG 169.6 billion related to lending in
the Netherlands and NLG 71.1 billion to international lending.

ING shareholders' equity increased by NLG 10,071 million, or 28.5%, to NLG
45,445 million at June 30, 1997 compared to NLG 35,374 million at December 31,
1996. This increase was mainly due to the increase in the value of the
investment representing shareholders' equity of ING's insurance subsidiaries of
NLG 6,153 million, retained profits of NLG 1,097 million, exchange rate
movements of NLG 979 million, the portion of the 1996 final dividend paid in
stock and private placements of NLG 935 million and the exercise of warrants and
options of NLG 664 million and revaluation of participations of NLG 649 million.

Acquisition

ING's strategy includes reinforcing its position in ING's mature markets
outside the Netherlands, and in connection therewith ING is currently evaluating
potential acquisitions in the United States market and elsewhere. On August 28,
1997, ING announced that it had agreed to buy Furman Selz L.L.C., a privately
held New York securities firm, for $600 million in cash.

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RESULTS OF OPERATIONS BY BUSINESS SEGMENTS

Insurance Operations

On a consolidated basis, ING's insurance operations contributed NLG 1,392
million and NLG 1,162 million to ING's results before taxation for the six
months ended June 30, 1997 and 1996, respectively, and NLG 1,030 million and NLG
860 million to ING's net profits in such periods.

The following table sets forth selected financial information for ING's
consolidated insurance operations for the six months ended June 30, 1997 and
1996.

SIX MONTHS ENDED
JUNE 30,
------------------
1997 1996
------ ------
(NLG MILLIONS)

Income from insurance operations
Gross premiums written:
Life................................................... 10,689 7,867
Non-Life............................................... 4,182 3,777
------ ------
Total.......................................... 14,871 11,644
Investment income........................................ 6,765 5,241
Commissions and other income............................. 283 239
------ ------
Total income................................... 21,919 17,124
Net premiums written:
Life................................................... 10,413 7,618
Non-Life............................................... 3,862 3,484
------ ------
Total.......................................... 14,275 11,102
Result before taxation from insurance operations:
Life................................................... 663 587
Non-Life............................................... 266 187
Insurance operations-general........................... 463 388
------ ------
Total.......................................... 1,392 1,162
Taxation................................................. 361 301
Third-party interests.................................... 1 1
------ ------
Net profit............................................... 1,030 860

The following table sets forth the breakdown of gross premiums written and
results before taxation by geographic area for ING's consolidated insurance
operations for the six months ended June 30, 1997 and 1996.

GROSS PREMIUMS RESULTS BEFORE
WRITTEN TAXATION
----------------- ---------------
SIX MONTHS ENDED SIX MONTHS
JUNE 30, ENDED JUNE 30,
----------------- ---------------
1997 1996 1997 1996
------ ------ ----- -----
(NLG MILLIONS) (NLG MILLIONS)

The Netherlands................................ 6,116 5,563 926 757
Rest of Europe................................. 1,331 1,111 111 102
North America.................................. 5,108 3,333 252 209
South America.................................. 96 80 (5) 3
Asia........................................... 911 771 38 53
Australia...................................... 1,294 771 70 46
Other.......................................... 137 139 0 (8)
Premiums between geographic areas(1)........... (122) (124) -- --
------ ------ ----- -----
Total.......................................... 14,871 11,644 1,392 1,162

- ---------------

(1) Represents reinsurance premiums ceded between ING companies in different
geographic areas.

Total Income. Total income from insurance operations for the six months
ended June 30, 1997 increased by NLG 4,795 million, or 28.0%, to NLG 21,919
million, from NLG 17,124 million for the six

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months ended June 30, 1996, reflecting strong increases in both premiums written
and investment income. Gross premiums written in ING's life and non-life
operations increased by 35.9% and 10.7%, respectively. Growth in gross premiums
written was attributable primarily to North America, Australia and the
Netherlands. The overall retention level increased from 95.3% for the six months
ended June 30, 1996, to 96.0% for the six months ended June 30, 1997. Investment
income increased by 29.1%, reflecting increases in unrealized gains on
investments held for the benefit of policyholders, higher dividends and overall
growth in insurance investments.

Most foreign exchange rates, compared to the Dutch Guilder, appreciated.
The appreciation of foreign exchange rates increased total income in guilder
terms by NLG 956 million. The increase in life premium income, non-life premium
income and investment income were NLG 514 million, NLG 238 million and NLG 204
million, respectively.

Result Before Taxation. The result before taxation from ING's insurance
activities for the six months ended June 30, 1997 increased by NLG 230 million,
or 19.8%, to NLG 1,392 million, from NLG 1,162 million for the six months ended
June 30, 1996, reflecting growth in life, non-life and insurance
operations-general. After eliminating the effect of foreign exchange rate
movements, which increased results before taxation by NLG 37 million, the result
before taxation for the first six months of 1997 increased by NLG 193 million,
or 16.6%, over the first six months of 1996.

Operating expenditure over the first six months of 1997 increased by 17.5%
over the first six months of 1996, while gross premiums written increased by
27.7%. Approximately NLG 58 million of this increase in operating expenditure
reflects higher additions to provisions for information technology expenses,
expenses related to the introduction of the euro and preparation to avoid the
potential adverse effects on computer systems of reaching the year 2000 for the
first six months of 1997, as compared to the first six months of 1996.

Taxation. The overall effective tax rate for ING's insurance operations
remained unchanged at 25.9% for the six months ended June 30, 1997. The
effective tax rate for the first six months 1997 was lower than the statutory
tax rate of 35% applicable to ING's primary (Dutch and non-Dutch) insurance
subsidiaries due to tax exemptions totaling, in the first six months of 1997,
NLG 126 million (NLG 106 million in the first six months of 1996) available to
ING's Dutch insurance subsidiaries. Such exemptions arose primarily in respect
of tax-exempt dividends received from Dutch listed companies in which ING held
more than 5% of the outstanding shares.

Net Profit. Net profit for ING's insurance operations for the six months
ended June 30, 1997 increased by NLG 170 million, or 19.8% to NLG 1,030 million,
from NLG 860 million for the six months ended June 30, 1996. Disregarding the
effect of exchange rate movements, which increased net profit by approximately
NLG 24 million, net profit for ING's insurance operations increased by NLG 146
million, or 17.0%, over the first six months of 1996.

95
110

Life Insurance Operations

The following table sets forth certain summarized financial information for
ING's life insurance operations for the periods indicated.

SIX MONTHS ENDED
JUNE 30,
-----------------
1997 1996
------ ------
(NLG MILLIONS)

Gross premiums written................................... 10,689 7,867
Net premiums written (net of reinsurance ceded of NLG 276
million and NLG 249 million for the six months ended
June 30, 1997 and 1996, respectively).................. 10,413 7,618
Investment income........................................ 5,224 3,841
Other underwriting income................................ 36 26
------ ------
Total income................................... 15,673 11,485
Life policy benefits paid or provided for................ 13,397 9,616
Operating expenses....................................... 1,599 1,277
Other expenditures....................................... 14 5
------ ------
Total expenditures............................. 15,010 10,898
------ ------
Result before taxation................................... 663 587

The following table sets forth ING's gross life premiums by geographic area
and type of product for the periods indicated.

SIX MONTHS ENDED
JUNE 30,
----------------
1997 1996
------ -----
(NLG MILLIONS)

THE NETHERLANDS
Individual................................................ 2,898 2,596
Group..................................................... 1,401 1,273
------ -----
Total................................................ 4,299 3,869
REST OF EUROPE
Individual................................................ 949 778
Group..................................................... 130 90
------ -----
Total................................................ 1,079 868
NORTH AMERICA
Individual................................................ 1,702 1,523
Group..................................................... 1,498 196
Reinsurance assumed....................................... 245 155
------ -----
Total................................................ 3,445 1,874
SOUTH AMERICA
Individual................................................ 16 13
Group..................................................... 17 17
------ -----
Total................................................ 33 30
ASIA
Individual................................................ 826 705
Group..................................................... 9 8
------ -----
Total................................................ 835 713
AUSTRALIA
Individual................................................ 95 75
Group..................................................... 902 437
------ -----
Total................................................ 997 512

96
111

SIX MONTHS ENDED
JUNE 30,
------------------
1997 1996
------ -----
(NLG MILLIONS)

OTHER
Reinsurance assumed....................................... 3 4
------ -----
Total................................................ 3 4
Premiums between geographic areas......................... (2) (3)
------ -----
Total........................................... 10,689 7,867

Premium income. Gross premium income of ING's life operations for the six
months ended June 30, 1997 increased by NLG 2,822 million, or 35.9%, to NLG
10,689 million, from NLG 7,867 million for the six months ended June 30, 1996.
The effect of exchange rate movements increased gross premium income by NLG 514
million. Disregarding the effect of exchange rate movements, gross premium
income for ING increased by NLG 2,308 million, or 29.3%, over the first six
months of 1996.

In the Netherlands, gross premium income for the six months ended June 30,
1997 increased by NLG 430 million, or 11.1%, to NLG 4,299 million, from NLG
3,869 million for the six months ended June 30, 1996. The increase was due to an
increase in individual and group premiums, of 11.6% and 10.1%, respectively. The
increase in individual premiums reflected the strong increase in mortgage-
related products and investment products. The increase in group premiums was
mainly due to increased sales of group single premium products and the purchase
of existing insurance portfolios.

In the Rest of Europe, premium income for the six months ended June 30,
1997 increased by NLG 211 million, or 24.3%, to NLG 1,079 million, from NLG 868
million for the six months ended June 30, 1996. ING's life insurance operations
in all countries recorded an increase in premium income, except for the life
operations in Luxembourg. Premium income in Luxembourg decreased mainly due to a
lowering of the guaranteed interest rates for certain products. Life operations
in Italy, Poland and the Czech Republic showed a particularly strong increase in
premium income.

In North America, premium income for the six months ended June 30, 1997
increased by NLG 1,571 million, or 83.8%, to NLG 3,445 million, from NLG 1,874
million for the six months ended June 30, 1996. Premium income in the United
States increased by NLG 1,366 million, or 87.7%. Excluding the effect of the
dollar/guilder exchange rate, the increase in premium income was 66.4%. This
increase was mainly due to higher sales of Guaranteed Investment Contracts
("GICs"), reflecting the increase in group premiums. Excluding GICs, premium
income increased by 23.0%, reflecting higher sales of individual insurance and
reinsurance at Security Life of Denver. In Canada, premium income increased by
NLG 205 million, or 64.8%. On a constant currency basis, the increase in
Canadian premium income was 46.8%, due mainly to higher sales of savings
products.

In Asia, premium income for the six months ended June 30, 1997 increased by
NLG 122 million, or 17.1%, to NLG 835 million, from NLG 713 million for the six
months ended June 30, 1996. Premium income in Japan increased by NLG 99 million
to NLG 734 million. Premium income in Taiwan increased by NLG 21 million to NLG
58 million, or 56.8%. On a constant currency basis, the increase in premium
income was 38.5%.

In Australia, premium income for the six months ended June 30, 1997
increased by NLG 485 million, or 94.7%, to NLG 997 million, from NLG 512 million
for the six months ended June 30, 1996. On a constant currency basis, the
increase in premium income was 73.1%. This increase was mainly due to higher
sales of group single premium products reflecting a positive investment
environment.

The retention level of ING's life operations for the six months ended June
30, 1997 increased to 97.4%, from 96.8% for the six months ended June 30, 1996,
reflecting premiums ceded to reinsurers of NLG 276 million and NLG 249 million,
respectively. Net premiums earned increased by NLG 2,795 million, or 36.7%, to
NLG 10,413 million.

97
112

Life Policy Benefits Paid or Provided For. Life policy benefits paid or
provided for consist of life benefits paid to policy owners and beneficiaries,
increases in insurance provisions, and profit sharing and rebates for
policyholders. Total life policy benefits for the six months ended June 30, 1997
increased by NLG 3,781 million, or 39.3%, to NLG 13,397 million, from NLG 9.616
million for the six months ended June 30, 1996 in each case net of reinsurance.
Life policy benefits paid and insurance provisions increased by NLG 3,069
million, or 36.8%, to NLG 11,406 million. This growth mainly reflects the
influence of currency exchange rates and growth in premiums written. Profit
sharing and rebates, which consist of distributions (in the form of a reduction
of premiums or credits) to policyholders on account of portfolio yield or the
results of the issuing company, and BONUSES added to policies totaled NLG 1,991
million and NLG 1,280 million for the six months ended June 30, 1997 and 1996,
respectively. A NLG 711 million, or 55.5%, increase in distributions to
policyholders resulted mainly from the revaluation of investments in equities
underlying policies under which investment risks are borne by policyholders
reflecting continued strong performances by the Dutch and foreign stock markets
in the first half of 1997.

OPERATING EXPENDITURE. Life operating expenditure (including other
expenditures), which consists primarily of salaries and commissions, increased
by NLG 331 million, or 25.8%, from NLG 1,282 million for the six months ended
June 30, 1996 to NLG 1,613 million for the six months ended June 30, 1997,
principally reflecting the increases in premiums written as noted above.

RESULT BEFORE TAXATION. The result before taxation from the life insurance
operations for the six months ended June 30, 1997 increased by NLG 76 million,
or 12.9%, to NLG 663 million, from NLG 587 million for the six months ended June
30, 1996 with the Netherlands and North America in particular showing strong
increases while results in South America and Asia decreased. The following table
sets forth a geographic breakdown of the changes in result before taxation of
ING's life operations.

RESULT BEFORE
TAXATION FOR THE
SIX MONTHS ENDED
JUNE 30,
----------------
1997 1996
----- ------

The Netherlands............................................. 487 440
Rest of Europe.............................................. 30 22
North America............................................... 119 72
South America............................................... (15) 4
Asia........................................................ 17 37
Australia................................................... 28 10
Other....................................................... (3) 2
----- -----
Total....................................................... 663 587

In the Netherlands, the result before taxation for the six months ended
June 30, 1997 increased by NLG 47 million, or 10.7%, to NLG 487 million, from
NLG 440 million for the six months ended June 30, 1996. This increase was mainly
due to an increase in premium volume.

In the Rest of Europe, the result before taxation for the six months ended
June 30, 1997 increased by NLG 8 million, or 36.4%, to NLG 30 million, from NLG
22 million for the six months ended June 30, 1996. Life operations, particularly
in Spain, the Czech Republic and Hungary, contributed to the increase in result
before taxation, which increase was partly offset by decreases in the results
from life operations in Poland and the newly started greenfield operation in
Slovakia.

In North America, the result before taxation for the six months ended June
30, 1997 increased by NLG 47 million, or 65.3%, to NLG 119 million, from NLG 72
million for the six months ended June 30, 1996. Results in the United States
increased by NLG 31 million partly due to exchange rate movements and partly due
to lower amortization of deferred acquisition costs ("DAC") compared to the
comparable period in 1996 which included accelerated DAC amortization. The
result before taxation at Security Life Reinsurance also improved due to
portfolio growth and favorable mortality experience. The result before

98
113

taxation at NN Financial in Canada also improved compared to the comparable
period in 1996, which included the effects of reserve strengthening.

In South America, the result before taxation for the six months ended June
30, 1997 decreased by NLG 19 million to NLG (15) million, from NLG 4 million for
the six months ended June 30, 1996, reflecting the incurrence of start-up costs
in connection with greenfield operations in Argentina.

In Asia, the result before taxation for the six months ended June 30, 1997
decreased by NLG 20 million, or 54.1%, to NLG 17 million, from NLG 37 million
for the six months ended June 30, 1996. The decrease in the result before
taxation in Asia was mainly due to a sustained low level of interest rates and
higher amortization of DAC, increased expenses at the Hong Kong office and
start-up costs for ING Life Philippines. The result before taxation of NN Life
Insurance Company Japan increased by NLG 3 million, while the result before
taxation in the Korean subsidiary decreased by NLG 4 million.

The result before taxation of Mercantile Mutual Life in Australia for the
six months ended June 30, 1997 increased by NLG 18 million to NLG 28 million,
from NLG 10 million for the six months ended June 30, 1996. This increase was
mainly due to higher interest rates and portfolio growth.

Non-life Insurance Operations

The following table sets forth certain summarized financial information for
ING's non-life insurance operations for the periods indicated.

SIX MONTHS ENDED
JUNE 30,
----------------
1997 1996
----- ------
(NLG MILLIONS)

Gross premiums written...................................... 4,182 3,777
Net premiums earned (net of reinsurance ceded of NLG 320
million and NLG 294 million for the six months ended June
30, 1997 and 1996, respectively).......................... 3,457 3,140
Investment income........................................... 373 338
Other underwriting income................................... 3 17
----- -----
Total income...................................... 3,833 3,495
Claims and claims expenses.................................. 2,436 2,200
Operating expenses.......................................... 1,130 1,104
Other expenditures.......................................... 1 4
----- -----
Total expenditures................................ 3,567 3,308
----- -----
Result before taxation...................................... 266 187

The following table sets forth ING's non-life gross written premiums by
geographic area and principal class of business.

SIX MONTHS
ENDED JUNE 30,
---------------
1997 1996
----- -----
(NLG MILLIONS)

THE NETHERLANDS
Fire...................................................... 433 421
Marine and aviation....................................... 49 48
Motor..................................................... 374 362
Health.................................................... 200 196
Accident.................................................. 512 424
Miscellaneous............................................. 203 196
Indirect business......................................... 46 47
----- -----
Total............................................. 1,817 1,694

99
114

SIX MONTHS
ENDED JUNE 30,
1997 1996
----- -----
(NLG MILLIONS)

REST OF EUROPE
Fire...................................................... 57 55
Marine and aviation....................................... 1 0
Motor..................................................... 78 73
Health.................................................... 39 37
Accident.................................................. 56 57
Miscellaneous............................................. 20 20
Indirect business......................................... 1 1
----- -----
Total............................................. 252 243
NORTH AMERICA
Fire...................................................... 486 415
Marine and aviation....................................... 18 15
Motor..................................................... 722 604
Health.................................................... 177 157
Accident.................................................. 90 94
Miscellaneous............................................. 161 142
Indirect business......................................... 9 32
----- -----
Total............................................. 1,663 1,459
SOUTH AMERICA
Fire...................................................... 23 14
Marine and aviation....................................... 1 1
Motor..................................................... 16 15
Health.................................................... 20 17
Accident.................................................. 2 2
Miscellaneous............................................. 1 1
Indirect business......................................... 0 0
----- -----
Total............................................. 63 50
ASIA
Fire...................................................... 9 7
Marine and aviation....................................... 4 3
Motor..................................................... 7 6
Health.................................................... 31 22
Accident.................................................. 18 14
Miscellaneous............................................. 4 2
Indirect business......................................... 3 4
----- -----
Total............................................. 76 58
AUSTRALIA
Fire...................................................... 129 100
Marine and aviation....................................... 11 10
Motor..................................................... 86 75
Health.................................................... 7 6
Accident.................................................. 30 31
Miscellaneous............................................. 34 37
Indirect business......................................... 0 0
----- -----
Total............................................. 297 259

100
115

SIX MONTHS
ENDED JUNE 30,
1997 1996
----- -----
(NLG MILLIONS)

OTHER
Reinsurance assumed....................................... 134 135
----- -----
Total............................................. 134 135
Premiums between geographic areas......................... (120) (121)
----- -----
Total............................................. 4,182 3,777

Premium income. Gross premium income of ING's non-life operations for the
six months ended June 30, 1997 increased by NLG 405 million, or 10.7%, to NLG
4,182 million, from NLG 3,777 million for the six months ended June 30, 1996.
Disregarding the effect of exchange rate movements, which increased gross
premium income by approximately NLG 238 million, gross premium income for ING
increased by NLG 167 million, or 4.4%, compared to the first six months of 1996.

In the Netherlands, non-life premium income for the six months ended June
30, 1997 increased by NLG 123 million, or 7.3%, to NLG 1,817 million, from NLG
1,694 million for the six months ended June 30, 1996. This increase was mainly
due to higher sales in the accident insurance line, reflecting the privatization
of certain accident benefits previously provided by the Dutch government. Except
for indirect business, all other classes of business showed a slight increase in
premium income.

In the Rest of Europe, non-life premium income for the six months ended
June 30, 1997 increased by NLG 9 million, or 3.7%, to NLG 252 million, from NLG
243 million for the six months ended June 30, 1996.

In North America, non-life premium income for the six months ended June 30,
1997 increased by NLG 204 million, or 14.0%, to NLG 1,663 million, from NLG
1,459 million for the six months ended June 30, 1996. The increase was mainly
due to exchange rate movements. Disregarding the effect of exchange rate
movements, premium income increased by 1.2%. Premium income for direct insurance
business in the United States increased by 4.1%. Indirect business in the United
States decreased 75%, from NLG 32 million to NLG 9 million, reflecting a
tightening in the involuntary market. In Canada, premium income increased only
slightly due to strong competition in the Quebec market.

In South America, non-life premium income for the six months ended June 30,
1997 increased by NLG 13 million, or 26.0%, to NLG 63 million, from NLG 50
million for the six months ended June 30, 1996. This increase was mainly due to
premium rate increases in the fire insurance line in the Netherlands Antilles.

In Asia, non-life premium income for the six months ended June 30, 1997
increased by NLG 18 million, or 31.0%, to NLG 76 million, from NLG 58 million
for the six months ended June 30, 1996. This increase was mainly due to growth
in premium income in the health insurance line in Taiwan.

In Australia, non-life premium income for the six months ended June 30,
1997 increased by NLG 38 million, or 14.7%, to NLG 297 million, from NLG 259
million for the six months ended June 30, 1996. This increase was mainly due to
exchange rate movements. Excluding the effect of exchange rate movements,
premium income increased by 1.6%.

Claims and Claims Expenses. CLAIMS AND CLAIMS EXPENSES for ING's non-life
business increased by NLG 236 million, from NLG 2,200 million for the first six
months of 1996 to NLG 2,436 million for the first six months of 1997, reflecting
premium growth and the effect of exchange rate movements. Claims paid increased
by NLG 293 million to NLG 2,249 million and the addition to the claims provision
decreased by NLG 57 million, compared with the first six months of 1996. The
overall non-life LOSS RATIO increased slightly, from 70.1% to 70.5%. The loss
ratio for the Netherlands increased from 67.2% for the first six months of 1996
to 68.5% for the first six months of 1997, reflecting higher losses in the fire
and miscellaneous lines. In the Rest of Europe the loss ratio increased from
66.3% to 67.1%, mainly due to higher losses in motor insurance. In Australia the
loss ratio increased from 77.6% to 79.1%, due to increased losses in compulsory
third party liability (motor) insurance.

101
116

Operating Expenditure. Operating expenditure (including other
expenditures), consisting primarily of salaries and commissions, increased by
NLG 23 million, or 2.1%, to NLG 1,131 million for the six months ended June 30,
1997, from NLG 1,108 million for the six months ended June 30, 1996.

Result before taxation. The result from non-life insurance for the six
months ended June 30, 1997 increased by NLG 79 million, or 42.2%, to NLG 266
million, from NLG 187 million for the six months ended June 30, 1996, reflecting
improved results in most geographic areas. The increase can be attributed in
particular to improved results in the Netherlands, especially in the motor and
accident insurance lines.

The following table sets forth the results before taxation of ING's
non-life operations by geographic area and principal class of business.

SIX MONTHS
ENDED
JUNE 30,
---------------
1997 1996
---- ----
(NLG MILLIONS)

THE NETHERLANDS
Fire.................................................... 24 34
Marine and aviation..................................... 2 2
Motor................................................... 27 4
Health.................................................. 7 4
Accident................................................ 65 33
Miscellaneous........................................... 9 13
Indirect business....................................... 7 3
---- ---
Total........................................... 141 93
REST OF EUROPE
Fire.................................................... 2 4
Marine and aviation..................................... 2 4
Motor................................................... 1 7
Health.................................................. 4 6
Accident................................................ 9 7
Miscellaneous........................................... 1 1
Indirect business....................................... 3 1
---- ---
Total........................................... 22 30
NORTH AMERICA
Fire.................................................... (6) (57)
Marine and aviation..................................... (1) 2
Motor................................................... 17 55
Health.................................................. (2) (6)
Accident................................................ 32 35
Miscellaneous........................................... 5 3
Indirect business....................................... 11 9
---- ---
Total........................................... 56 41
SOUTH AMERICA
Fire.................................................... 1 (1)
Marine and aviation..................................... 0 0
Motor................................................... 0 1
Health.................................................. 2 0
Accident................................................ 0 0
Miscellaneous........................................... 0 0
Indirect business....................................... 0 0
---- ---
Total........................................... 3 0

102
117

SIX MONTHS
ENDED
JUNE 30,
1997 1996
---- ---
(NLG MILLIONS)

ASIA
Fire.................................................... 0 0
Marine and aviation..................................... 1 1
Motor................................................... 1 0
Health.................................................. 6 2
Accident................................................ 2 3
Miscellaneous........................................... 0 0
Indirect business....................................... 0 1
---- ---
Total........................................... 10 7
AUSTRALIA
Fire.................................................... 3 0
Marine and aviation..................................... 2 2
Motor................................................... (8) 1
Health.................................................. 0 1
Accident................................................ 4 0
Miscellaneous........................................... 7 3
Indirect business....................................... 5 0
---- ---
Total................................................ 13 7
OTHER
Fire.................................................... 18 0
Marine and aviation..................................... (1) 0
Motor................................................... (5) 3
Accident................................................ (4) (1)
Miscellaneous........................................... 1 (5)
Reinsurance assumed..................................... 12 12
---- ---
Total................................................ 21 9
---- ---
Total........................................... 266 187

The following sets forth loss, EXPENSE and COMBINED RATIO information for
ING's non-life operations by geographic area for the periods indicated.

SIX MONTHS ENDED JUNE 30, 1997
-------------------------------------------------------------------------------
TOTAL THE REST OF NORTH SOUTH
NON-LIFE NETHERLANDS EUROPE AMERICA AMERICA ASIA AUSTRALIA OTHER
-------- ----------- ------- ------- ------- ---- --------- -----

Loss ratio...................... 70.5% 68.5% 67.1% 72.2% 62.5% 46.6% 79.1% 75.9%
Expense ratio................... 29.3% 26.9% 34.3% 31.2% 20.8% 35.9% 29.4% 27.3%
---- ---- ----- ----- ---- ---- ----- -----
Combined ratio.................. 99.8% 95.4% 101.4% 103.4% 83.3% 82.5% 108.5% 103.2%

SIX MONTHS ENDED JUNE 30, 1996
-------------------------------------------------------------------------------
TOTAL THE REST OF NORTH SOUTH
NON-LIFE NETHERLANDS EUROPE AMERICA AMERICA ASIA AUSTRALIA OTHER
-------- ----------- ------- ------- ------- ---- --------- -----

Loss ratio...................... 70.1% 67.2% 66.3% 72.1% 58.8% 44.2% 77.6% 116.7%
Expense ratio................... 31.7% 29.7% 34.4% 33.3% 37.5% 39.6% 31.6% 24.3%
----- ---- ----- ----- ---- ---- ----- -----
Combined ratio.................. 101.8% 96.9% 100.7% 105.4% 96.3% 83.8% 109.2% 141.0%

In the Netherlands, non-life results before taxation increased by NLG 48
million, or 51.6%, to NLG 141 million. The increase was mainly due to an
increase of NLG 17 million in the results from the motor liability insurance
line, reflecting a decrease in the loss ratio from 78.5% to 71.6%, and an NLG 32
million increase in the results in the accident insurance line, reflecting
premium growth of 20.8%. Such increases

103
118

were partially offset by an NLG 10 million decrease in the results from the fire
insurance line, as a result of a number of large claims in the second quarter of
1997.

In the Rest of Europe, non-life results before taxation decreased by NLG 8
million, or 26.7%, to NLG 22 million, due to lower results in most classes of
business.

In North America, non-life results before taxation increased by NLG 15
million, or 36.6%, to NLG 56 million. The effect of exchange rate movements was
NLG 7 million. The result from fire insurance business, adjusted for exchange
rate movements, increased by NLG 52 million relative to 1996 levels which were
impacted by unfavorable winter weather. Motor insurance result, adjusted for
exchange rate movements, decreased by NLG 40 million, due to an extremely harsh
winter in Quebec, Canada, which increased the number of car accidents. Results
of other classes of business decreased, on balance, by NLG 4 million.

In South America, non-life results before taxation increased by NLG 3
million, to NLG 3 million.

In Asia, non-life results before taxation increased by NLG 3 million, or
42.9%, to NLG 10 million, primarily reflecting improved results in the health
insurance line.

In Australia, non-life results before taxation increased by NLG 6 million,
or 85.7%, to NLG 13 million, notwithstanding decreased results in the motor and
health lines.

Insurance Operations -- General

The result from insurance holding companies and the result from
non-insurance companies included within ING Insurance are accounted for under
the item, Result from Insurance Operations -- General together with investment
income relating to investments allocated to the capital and surplus of ING's
insurance companies. The remaining income from the investments of ING's life and
non-life insurance companies is allocated to such companies on a legal entity
basis, and, in the case of companies conducting both life and non-life
operations, is allocated to such operations pro rata based on the average
insurance provisions held by each. The following table sets forth the results
from insurance operations -- general for the periods indicated.

SIX MONTHS ENDED
JUNE 30,
-----------------
1997 1996
------ ------
(NLG MILLIONS)

Investment income...................................... 6,765 5,241
Commission and other income............................ 283 239
------ ------
Total........................................ 7,048 5,480
Expenditure(1)......................................... (950) (870)
------ ------
6,098 4,610
Allocated to:
Life operations...................................... (5,260) (3,867)
Non-life operations.................................. (375) (355)
------ ------
Result from insurance operations -- general............ 463 388

- ---------------

(1) "Expenditure" includes salaries and expenses related to ING's
insurance-related asset management operations, as well as interest charges.

The result from insurance operations -- general for the six months ended
June 30, 1997 increased by NLG 75 million, or 19.3%, to NLG 463 million, from
NLG 388 million for the six months ended June 30, 1996. Disregarding the effect
of exchange rate movements, which increased results by approximately NLG 13
million, result from insurance operations -- general increased by NLG 62
million, or 16.0%, over the first six months 1996.

104
119

Insurance Investments

The following table sets forth the components of the investment portfolio
of ING's insurance operations at June 30, 1997 and 1996.

JUNE 30, 1997 JUNE 30, 1996
------------- -------------
(NLG MILLIONS)

Land and buildings(1)........................... 9,722 8,429
Fixed-interest securities(2).................... 99,515 84,996
Shares and convertible debentures(3)............ 37,888 23,860
Interests in investment pools of the insurance
operations(4)................................. 539 652
Deposits with insurers.......................... 82 50
Investments for the risk of policyholders and
investments of annual life funds.............. 26,424 21,981
------- -------
Total................................. 174,170 139,968
------- -------

- ---------------

(1) Including commuted ground rents.

(2) Includes NLG 2,113 million and NLG 2,012 million at June 30, 1997 and 1996,
respectively, representing intercompany balances between ING insurance and
banking companies.

(3) "Shares and convertible debentures" of the insurance investments includes
ING shares held by NN Life and other Dutch insurance subsidiaries, amounting
to NLG 4,047 million and NLG 1,972 million at June 30, 1997 and 1996,
respectively.

(4) "Interests in investment pools of the insurance operations" consist of
assets relating to certain large Dutch group life policies under which
coverage is provided by ING and other insurers.

The following table sets forth the income from investments, commissions and
other income of the insurance investments income for the periods indicated.

SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1997 JUNE 30, 1996
------------------- -------------------
PRE-TAX PRE-TAX
INCOME YIELD(1) INCOME YIELD(1)
------ -------- ------ --------
(NLG MILLION)

Land and buildings.................... 432 9.3% 388 9.4%
Fixed-interest securities(2)(3)....... 3,866 8.1% 3,311 8.0%
Shares and convertible
debentures(4)....................... 504 3.0% 475 4.2%
Investments for the risk of
policyholders and investments of
annual life funds(5)................ 1,963 1,067
----- -----
Total(6).................... 6,765 5,241
Commission and other income(7)........ 283 239
----- -----
Total....................... 7,048 5,480

- ---------------

(1) Pre-tax yield is calculated using interest, rental, dividend and other
income received for each period, divided by the average of beginning and six
months ended June 30 balances on related assets.

(2) Includes income from interests in investment pools of the insurance
operations which consists of investment income from assets relating to
certain large Dutch group life policies under which coverage is provided by
ING and other insurers.

(3) Includes mortgages and other loans.

(4) Income from shares and convertible debentures of the insurance operations
includes income relating to dividends on ING shares held by NN Life and
other Dutch insurance subsidiaries, amounting to NLG 49 million and NLG 32
million at June 30, 1997 and 1996, respectively.

105
120

(5) "Investments for the risk of policyholders and investments of annual life
funds", which totaled NLG 26,424 million at June 30, 1997, consists
primarily of shares and convertible debentures and fixed-interest
securities. Any revaluation of shares which belong to this category is taken
to the profit and loss account as investment income for the risk of
policyholders.

(6) Includes NLG 17 million and NLG 9 million at June 30, 1997 and 1996,
respectively, representing intercompany interest between ING insurance and
banking companies.

(7) "Commission and other income" consists primarily of fees on asset management
and insurance broking, results of minority interests, and results from
financial transactions.

Income from investments of ING's insurance operations for the six months
ended June 30, 1997 increased by NLG 1,568 million, or 28.6%, to NLG 7,048
million, from NLG 5,480 million for the six months ended June 30, 1996.
Disregarding the effect of exchange rate movements, which increased investment
income by approximately NLG 204 million, income from investments for ING's
insurance operations increased by NLG 1,364 million, or 24.9%, over the first
six months of 1996.

Excluding commission and other income, investment income increased by NLG
1,524 million, or 29.1%, to NLG 6,765 million for the six months ended June 30,
1997, from NLG 5,241 million for the six months ended June 30, 1996. The
increase was mainly due to additional income from growth in the investment
portfolio, increases in unrealized gains on investments held for the benefit of
policyholders, investments and additional income from investments of retained
profit in 1996. Due to the valuation principle of investment of shares, market
value, the dividend-yield on shares decreased as a result of an increase in
market prices in the second half of 1996 and the first six months of 1997.

Commission and other income increased by NLG 44 million, or 18.4%, to NLG
283 million from NLG 239 million in the first six months of 1996, primarily
reflecting increased income relating to insurance broking and asset management
and increased results from financial transactions.

Expenditure for the six months ended June 30, 1997 increased by NLG 80
million, or 9.2%, to NLG 950 million, from NLG 870 million for the six months
ended June 30, 1996. Approximately NLG 58 million of this increase was caused by
a charge taken in respect of costs related to information technology, the
introduction of the euro and preparation to avoid the potential adverse effects
on computer systems of reaching the year 2000.

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Banking Operations

The following table sets forth selected financial information for ING's
consolidated banking operations for the six months ended June 30, 1997 and 1996.

SIX MONTHS ENDED
JUNE 30,
-----------------
1997(1) 1996
------- ------
(NLG MILLIONS)

Interest income........................................... 11,230 9,448
Interest expense.......................................... 7,283 6,055
------ -----
Net interest result....................................... 3,947 3,393
Commissions............................................... 1,644 1,288
Other income
Income relating to securities and participations........ 58 86
Result from financial transactions...................... 897 534
Other revenue........................................... 274 208
------ -----
Total other income................................... 1,229 828
------ -----
Total income.................................... 6,820 5,509
Staff costs............................................... 2,581 2,047
Other administrative expenses............................. 2,081 1,628
Depreciation.............................................. 274 240
------ -----
Operating expenditure..................................... 4,936 3,915
------ -----
Operating result.......................................... 1,884 1,594
Value adjustments to receivables(2)....................... 400 575
Addition to the Fund for general banking risks(2)......... 90 --
Result before taxation.................................... 1,394 1,019
------ -----
Taxation.................................................. 407 328
Third party interests..................................... 26 5
------ -----
Net profit........................................... 961 686

- ---------------

(1) Including Bank Slaski.

(2) ING maintained, through December 31, 1996, an undisclosed provision for
general risks inherent in its banking activities. This provision was
included in the balance sheet as a deduction from the caption lending, and
the amount added to such provision each period was included in the value
adjustments to receivables in ING's profit and loss account. Subsequent to
changes in the industry reporting practices in the Netherlands and beginning
January 1, 1997, the ING transferred NLG 1,300 million of the provision for
general banking risks to a new "Fund for general banking risks" and added
the remaining NLG 1,250 million to shareholders' equity. The periodic
additions to the fund for general banking risks are disclosed, as from
January 1, 1997, separately on ING's profit and loss account. Consequently,
the six months amounts presented under value adjustments to receivables are
not completely comparable for 1997 and 1996, because the 1997 amount
consists solely of the additions to the provision for loan losses, while for
1996, it also included additions to the provision for general banking risks.

Overview. The result before taxation from ING's banking operations for the
six months ended June 30, 1997 increased by NLG 375 million, or 36.8%, to NLG
1,394 million, from NLG 1,019 million for the six months ended June 30, 1996.
The increase is attributable primarily to an NLG 554 million increase in the net
interest result, an NLG 356 million increase in commission income (particularly
from the securities business, corporate finance and asset management) and an NLG
363 million increase in the result from financial transactions (particularly
from securities trading).

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122

Total income from the banking operations grew by 23.8%, while operating
expenditure increased by 26.1%. Growth in both total income and operating
expenditure in the banking operations was influenced by the consolidation of
Bank Slaski. Excluding the consolidation of Bank Slaski, the increase in total
income and operating expenditure was 19.0% and 22.5%, respectively. The increase
in operating expenditure is in part due to additions to provisions amounting to
NLG 265 million for information technology, preparation for the introduction of
the euro, preparation to avoid potential adverse effects on computer systems of
reaching the year 2000 and a reorganization of the foreign branch network (for
the six months ended June 30, 1996 the additions to such provisions amounted to
NLG 25 million). Excluding such provisions and excluding the effect of the
consolidation of Bank Slaski operating expenditure increased by 16.4%, primarily
due to the expansion of the foreign branch network.

Exchange rate movements (particularly the appreciation of the U.S. dollar
and British pound sterling against the guilder) increased total income by NLG
252 million and increased operating expenditure by NLG 200 million.

Disregarding the effect of changes in the composition of the banking
operations discussed below and of exchange rate movements, and excluding the
previously noted additions to provisions, operating expenditure for the six
months ended June 30, 1997 increased by 11.3%, to NLG 4,329 million, from NLG
3,890 million for the six months ended June 30, 1996.

Operating expenditure as a percentage of total income was 72.4% for the
first six months of 1997, compared to 71.1% for the same period in 1996.
Disregarding the effect of exchange rate movements and the NLG 265 million
additional provisions noted above, the operating expenditure/total income ratio
was 68.1% in 1997.

EFFECT OF ACQUISITIONS/CONSOLIDATIONS. Bank Slaski was consolidated as of
August 1996. The consolidation of Bank Slaski affected ING's 1997 total income,
total operating expenditure and operating result as follows.

SIX MONTHS ENDED JUNE 30, 1997
------------------------------
(NLG MILLIONS)

Interest result.................................. 202
Commissions...................................... 55
Other income..................................... 9
---
TOTAL INCOME........................... 266
Staff costs...................................... 76
Other expenses................................... 66
---
TOTAL EXPENDITURE...................... 142
---
OPERATING RESULT................................. 124
===

Within the banking operations, the net interest result for the six months
ended June 30, 1997 increased by NLG 554 million, or 16.3%, to NLG 3,947
million, from NLG 3,393 million for the six months ended June 30, 1996. This
increase is due to substantial growth in average total assets, partly offset by
a narrowing of the interest margin. Both domestic and international operations
contributed to the volume growth. The narrowing of the interest margin is the
result of a narrowing of the interest margin in the domestic operations and an
increase in the interest margin in the international operations. Excluding the
effect of the consolidation of Bank Slaski, the interest margin in the
international operations also narrowed. The consolidation of Bank Slaski
contributed NLG 202 million to the growth of the net interest result.

Commission income for the six months ended June 30, 1997 increased by NLG
356 million, or 27.6%, to NLG 1,644 million, from NLG 1,288 million for the six
months ended June 30, 1996. The consolidation of Bank Slaski contributed NLG 55
million to this increase. Excluding the effect of the consolidation of Bank
Slaski, growth in commission income of NLG 301 million or 23.4% was mainly due
to the securities business and corporate finance and to higher fees for asset
management.

Other income for the six months ended June 30, 1997, which includes results
from financial transactions, increased by NLG 401 million, or 48.4%, to NLG
1,229 million, from NLG 828 million for the

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123

six months ended June 30, 1996. The result from financial transactions
represented NLG 363 million of such increase. Within the result from financial
transactions, the result from the securities trading portfolio showed a strong
improvement of NLG 293 million, due to favorable market conditions.

Value adjustments to receivables and additions to the fund for general
banking risks amounted to NLG 400 million and NLG 90 million, respectively, for
the six months ended June 30, 1997. For the six months ended June 30, 1996, the
value adjustments to receivables amounted to NLG 575 million. The total decrease
of NLG 85 million, or 14.8%, is due to improvements in loan portfolio quality
and strict monitoring of problem loans.

NET INTEREST RESULT. Net interest result includes interest income, the
results from interest arbitrage and results from financial instruments to the
extent that these serve to limit interest rate risk, as well as fees connected
with lending, net of related interest expense.

The net interest result for the six months ended June 30, 1997 increased by
NLG 554 million, or 16.3%, to NLG 3,947 million, from NLG 3,393 million for the
six months ended June 30, 1996. This increase reflected an increase in volume of
NLG 70.2 billion, or 25.2%, which was partly offset by a decrease in the
interest margin of 16 basis points. Both domestic and international operations
recorded volume growth of 19.5% and 48.7%, respectively. The decrease in the
interest margin was the result of a narrowing of the interest margin in domestic
operations of 25 basis points and an increase in the interest margin in
international operations of 20 basis points. Excluding the effect of the
consolidation of Bank Slaski, the interest margin in the international
operations narrowed by 7 basis points.

COMMISSIONS. The following table sets forth the components of commissions
for the periods indicated.

SIX MONTHS ENDED
JUNE 30,
----------------
1997 1996
------ ------
(NLG MILLIONS)

Funds transfer.............................................. 344 322
Securities business......................................... 519 378
Insurance broking........................................... 76 55
Other....................................................... 705 533
----- -----
Total.................................................. 1,644 1,288

Commission income for the six months ended June 30, 1997 increased by NLG
356 million, or 27.6%, to NLG 1,644 million, from NLG 1,288 million for the six
months ended June 30, 1996. Commission income from the consolidation of Bank
Slaski amounted to NLG 55 million for the six months ended June 30, 1997 of
which NLG 47 million is related to other commissions.

Funds transfer. Commissions from funds transfer increased by NLG 22
million, or 6.8%, to NLG 344 million. Despite strong competition in the funds
transfer market, commissions from domestic funds transfer increased by NLG 3
million. Commission in the international funds transfer increased by NLG 8
million, while revenues from credit card fees increased by NLG 11 million from
NLG 50 million to NLG 61 million.

Securities business. Commissions from securities business increased by NLG
141 million, or 37.3%. The increase reflected favorable market conditions
(increasing price trends on exchanges) in both the domestic and international
markets.

Insurance broking. Commissions from insurance broking increased by NLG 21
million, or 38.2%, mainly due to increased sales of life insurance through ING
Bank branches in the Netherlands as ING Bank's branch networks in
Nationale-Nederlanden's insurance sales increased to 11%.

Other. Other commission income increased by NLG 172 million, or 32.3%, of
which NLG 47 million was due to the consolidation of Bank Slaski. The remaining
increase reflected an increase of NLG 47 million in intermediation fees to NLG
104 million for the six months ended June 30, 1997. Fees from

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asset management increased by NLG 35 million (of which NLG 24 million is
attributable to Baring Asset Management) to NLG 243 million for the six months
ended June 30, 1997.

Other Income

The following table sets forth the components of other income for the
periods indicated.

SIX MONTHS ENDED
JUNE 30,
----------------
1997 1996
------ ------
(NLG MILLIONS)

Income relating to securities and participations............ 58 86
Result from financial transactions.......................... 897 534
Other revenue............................................... 274 208
----- ---
Total.................................................. 1,229 828

Other income for the six months ended June 30, 1997 increased by NLG 401
million, or 48.4%, to NLG 1,229 million, from NLG 828 million for the six months
ended June 30, 1996. Other income from the consolidation of Bank Slaski amounted
to NLG 9 million for the six months ended June 30, 1997.

Income relating to securities and participations. Income relating to
securities and participations consists of dividends, other income from shares
held in the investment portfolio and the results from participating equity
interests. The decrease in income relating to securities and participations of
NLG 28 million was mainly due to the consolidation of Bank Slaski as of August
1996, which reduced the results from participating equity interests by NLG 27
million.

Result from financial transactions. The result from financial transactions
includes exchange rate differences and capital gains and losses on securities
held in the trading portfolio as well as valuation differences on equity
participations. Also included in this item are exchange rate differences in
connection with holding assets and liabilities in foreign currencies, the
results of the associated forward contracts and the results from financial
instruments other than those serving to hedge interest rate risks. Asset trading
results are also included in this item.

The result from financial transactions can be analyzed as follows.

SIX MONTHS
ENDED
--------------
1997 1996
---- ----
(NLG MILLIONS)

Result from securities trading portfolio...................... 712 419
Result from currency trading portfolio........................ 114 83
Other results................................................. 71 32
--- ---
Total............................................... 897 534

Result from securities trading portfolio. The result from the securities
trading portfolio for six months ended June 30, 1997 increased by NLG 293
million, or 69.9%, to NLG 712 million, from NLG 419 million for the six months
ended June 30, 1996. This increase was mainly due to favorable market conditions
in the six months ended June 30, 1997 and includes results from LDC ("Less
Developed Countries") securities trading which increased by NLG 198 million over
1996 levels.

Result from currency trading portfolio. The result from the currency
trading portfolio for the six months ended June 30, 1997 increased by NLG 31
million, or 37.3%, to NLG 114 million, from NLG 83 million for the six months
ended June 30, 1996. This increase was mainly due to effective responses to
exchange rate movements in the six months ended June 30, 1997.

Other results. The other results for the six months ended June 30, 1997
increased by NLG 39 million, or 122%, to NLG 71 million, from NLG 32 million for
the six months ended June 30, 1996, mainly due to a trading profit on its own
shares purchased in connection with the listing of ING on the NYSE in June 1997.

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Other revenue. Income from other revenue for the six months ended June 30,
1997 increased by NLG 66 million, or 31.7%, to NLG 274 million, from NLG 208
million for the six months ended June 30, 1996. This increase was mainly due to
higher rental income from real estate and higher results from the sale of real
estate.

Operating expenditure

The following table sets forth the components of operating expenditure for
the periods indicated.

SIX MONTHS ENDED
JUNE 30,
----------------
1997 1996
----- -----
(NLG MILLIONS)

Staff costs................................................ 2,581 2,047
Other administrative expenses.............................. 2,081 1,628
Depreciation............................................... 274 240
----- -----
Operating expenditure.................................... 4,936 3,915

Operating expenditure for the six months ended June 30, 1997 increased by
NLG 1,021 million, or 26.1%, to NLG 4,936 million, from NLG 3,915 million for
the six months ended June 30, 1996. Excluding the effect of the consolidation of
Bank Slaski, operating expenditure increased by NLG 879 million, or 22.5%, to
NLG 4,794 million. Without the previously noted additions to provisions and
excluding the effect of exchange rate movements, the increase of operating
expenditure was 11.3%. In ING's domestic operations the increase was 6.3%, while
in ING's international operations the increase was 20.5%, reflecting costs
associated with the expansion of the foreign branch network.

Staff Costs. Staff costs for the six months ended June 30, 1997 increased
by NLG 534 million, or 26.1%, to NLG 2,581 million, from NLG 2,047 million for
the six months ended June 30, 1996. Excluding the consolidation of Bank Slaski
and the effect of exchange rate movements, staff costs increased by 16.0%,
mainly due to the increase in the average number of staff (full time
equivalents) employed outside the Netherlands, from 9,421 in the first six
months of 1996 to 10,654 in the first six months of 1997 (excluding the effect
of the consolidation of Bank Slaski). In the Netherlands the average number of
staff increased by 1,157 to 20,755 due to the new banking collective agreement,
which reduced the working week to 36 hours as of April 1, 1996 and to increased
business volume.

Other Administrative Expenses. Other administrative expenses for the six
months ended June 30, 1997 increased by NLG 453 million, or 27.8%, to NLG 2,081
million, from NLG 1,628 million for the six months ended June 30, 1996.
Excluding the consolidation of Bank Slaski, the increase was 25.0%, and without
the previously noted additions to provisions and excluding the effect of the
consolidation of Bank Slaski the increase was 10.4%.

Depreciation. Total depreciation for the six months ended June 30, 1997
increased by NLG 34 million, or 14.2%, to NLG 274 million, from NLG 240 million
for the six months ended June 30, 1996. Excluding the consolidation of Bank
Slaski, the increase was NLG 14 million, or 5.8%, reflecting the expansion of
the international banking operations.

Value Adjustments to Receivables

Value adjustments to receivables and addition to the fund for general
banking risks amounted to NLG 400 million and NLG 90 million, respectively, for
the six months ended June 30, 1997. For the six months ended June 30, 1996, the
value adjustments to receivables amounted to NLG 575 million. The total decrease
of NLG 85 million, or 14.8%, reflects improvements in loan portfolio quality and
strict monitoring of problem loans.

Taxation

The effective tax rate for ING's banking operations decreased from 32.2%
(NLG 328 million) for the six months ended June 30, 1996, to 29.2% (NLG 407
million) for the six months ended June 30, 1997, compared to statutory rates of
35% in the Netherlands. The difference between the effective and statutory rates
reflected the effect of tax exemptions relating to dividends from Dutch
companies in which ING held more than 5% of the outstanding shares, foreign tax
rates and other items.

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126

Net Profit from Banking Operations.

Net profit for the six months ended June 30, 1997 increased by NLG 275
million, or 40.1%, to NLG 961 million, from NLG 686 million for the six months
ended June 30, 1996. Disregarding the effect of the consolidation of Bank
Slaski, which increased net profit for the first six months of 1997 by NLG 19
million, and of exchange rate movements, which increased net profit for the
first six months of 1997 by NLG 37 million, net profit increased by 31.9%. The
effect of exchange rate movements on net profit is calculated assuming a tax
burden equal to ING's overall effective rate of 29.2%.

Geographical Distribution of Total Income and Operating Results of Banking
Operations

OPERATING RESULT
TOTAL INCOME (1)
------------------- -------------------
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
1997 1996 1997 1996
----- ----- ----- -----
(NLG MILLIONS) (NLG MILLIONS)

The Netherlands....................... 4,093 3,770 1,310 1,234
Rest of Europe........................ 1,713 960 257 37
North America......................... 465 361 35 103
South America......................... 324 255 184 151
Asia.................................. 207 151 99 67
Australia............................. 14 11 (1) 2
Other................................. 4 1 -- --
----- ----- ----- -----
Total............................... 6,820 5,509 1,884 1,594

- ---------------

(1) Before value adjustments to receivables and addition to the fund for general
banking risks.

THE NETHERLANDS. Total income in the Netherlands for the six months ended
June 30, 1997 increased by NLG 323 million, or 8.6%, to NLG 4,093 million, from
NLG 3,770 million for the six months ended June 30, 1996, while the operating
result increased by 6.2%. The net interest result improved by 4.4%, attributable
to strong volume growth, which was partly offset by a decrease in the interest
margin, and because of an increase in amortization of realized capital gains on
the investment portfolio. Commission income increased by 17.2% compared to the
same period in 1996, mainly due to an increase of 36.6% in commissions relating
to securities business and insurance broking. Other income increased by 28.7%
compared to the same period in 1996, reflecting increased results from the
currency trading portfolio and a trading profit on its own shares purchased in
connection with the listing of ING on the NYSE in June 1997. Operating
expenditure increased by 9.7% compared to the same period in 1996, more than the
growth in total income, mainly due to the previously noted additions to
provisions.

REST OF EUROPE. Total income in the Rest of Europe for the six months ended
June 30, 1997 increased by NLG 753 million, or 78.4%, to NLG 1,713 million, from
NLG 960 million for the six months ended June 30, 1996. Excluding the NLG 266
million of income arising from the consolidation of Bank Slaski, total income
increased by 50.7%. This increase reflects the improved result from financial
transactions, especially from the securities trading portfolio which increased
136% compared to the same period in 1996 and a 30.0% increase in commissions.
The operating result increased by NLG 220 million. Excluding the effect of the
consolidation of Bank Slaski, the operating result improved by NLG 96 million
while operating expenditure increased by 42.4%.

NORTH AMERICA. Total income in North America for the six months ended June
30, 1997 increased by NLG 104 million, or 28.8%, to NLG 465 million, from NLG
361 million for the six months ended June 30, 1996, while the operating result
decreased by NLG 68 million. The increase in total income was mainly due to an
NLG 54 million increase in net interest result and an NLG 34 million increase in
commissions, especially from securities business. The operating result
decreased, as operating expenditure rose by 66.7% (exceeding the increase in
total income), mainly due to the provision for costs

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127

associated with the move to other premises in New York and to higher bonus
levels. The effect of exchange rate movements (particularly the appreciation of
the U.S. dollar) was also substantial.

SOUTH AMERICA. Total income in South America for the six months ended June
30, 1997 increased by NLG 69 million, or 27.1%, to NLG 324 million, from NLG 255
million for the six months ended June 30, 1996. The operating result increased
by 21.9%. The increase in income was mainly due to higher results from the
securities trading portfolio, partly offset by a decrease in the results from
the currency trading portfolio.

ASIA. Total income in Asia for the six months ended June 30, 1997 increased
by NLG 56 million, or 37.1%, to NLG 207 million, from NLG 151 million for the
six months ended June 30, 1996. The operating result increased by 47.8%. The
increase in total income was mainly due to a higher net interest result and
higher results from the currency trading portfolio.

AUSTRALIA. Total income in Australia for the six months ended June 30, 1997
increased by NLG 3 million, or 27.3%, to NLG 14 million, from NLG 11 million for
the six months ended June 30, 1996, while the operating result decreased by NLG
3 million, mainly due to one-time information technology expenses.

CONSOLIDATED RESULT FROM OPERATIONS

The following table sets forth the consolidated result from operations of
ING for the years ended December 31, 1994, 1995 and 1996.

YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
----- ----- -----
(NLG MILLIONS)

Result before taxation:
Insurance operations......................................... 2,498 2,106 1,834
Banking operations........................................... 2,133 1,752 1,509
Dividend on own shares......................................... (72) (58) (51)
----- ----- -----
Result before taxation......................................... 4,559 3,800 3,292
Taxation....................................................... 1,203 1,138 994
Third-party interests.......................................... 35 13 (4)
----- ----- -----
Net profit..................................................... 3,321 2,649 2,302
Dividend on Preference Shares.................................. 46 46 46
----- ----- -----
Net profit after dividend on Preference Shares................. 3,275 2,603 2,256
===== ===== =====

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128

The following table sets forth the results before taxation of ING's
consolidated operations by geographic region for the years ended December 31,
1994, 1995 and 1996.

YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
----- ----- -----
(NLG MILLIONS)

The Netherlands................................................ 3,954 3,469 3,010
Rest of Europe................................................. 473 402 118
North America.................................................. 653 660 461
South America.................................................. 306 95 478
Asia........................................................... 265 226 163
Australia...................................................... 97 73 123
Other.......................................................... 13 23 25
----- ----- -----
5,761 4,948 4,378
Value adjustments to receivables of the banking
operations(1)................................................ 1,130 1,090 1,035
----- ----- -----
4,631 3,858 3,343
Dividend on own shares......................................... (72) (58) (51)
----- ----- -----
Result before taxation......................................... 4,559 3,800 3,292
===== ===== =====

- ---------------

(1) Value adjustments to receivables of the banking operations consist of a
charge to ING's profit and loss account in respect of the estimated risk
inherent in ING's banking operations and which include additions to the
provision for loan losses and to the provision for general banking risks.
See "-- Liquidity and Capital Resources -- Capital Adequacy" and Notes 3.2.4
and 7.1(r) of Notes to the Consolidated Financial Statements.

The contribution of the insurance operations to the results of ING before
taxation and including dividends on its own shares amounted to 53.9%, 54.6% and
54.9% in 1996, 1995 and 1994, respectively, and the contribution of the
insurance operations to the net profit of ING excluding dividends on its own
shares amounted to 54.6%, 55.5% and 54.9% in 1996, 1995 and 1994, respectively.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Total income of ING increased NLG 6,348 million, or 15.4%, to NLG 47,551
million, from NLG 41,203 million in 1995, reflecting increases in income from
ING's insurance and banking operations of 13.9% and 20.1%, respectively. Total
expenditure increased NLG 5,575 million, or 14.9%, from NLG 37,345 million in
1995 to NLG 42,920 million in 1996, reflecting increases of 13.6% and 19.7%,
respectively, in total expenditure for ING's insurance and banking operations
(total expenditure for ING's banking operations includes all non-interest
expenditure, including value adjustments to receivables). Geographically, the
increase in ING's result before taxation was mainly due to the increase in
results from the Netherlands, the Rest of Europe, and South America.

Consolidated result before taxation increased NLG 759 million, or 20% to
NLG 4,559 million in 1996 compared to NLG 3,800 million in 1995, reflecting
increases of 18.6% and 21.7%, respectively, for ING's insurance and banking
operations. ING's consolidated taxes of NLG 1,203 million in 1996 and NLG 1,138
million in 1995 represented overall effective tax rates of 26.4% and 29.9%,
respectively, compared to statutory rates for ING's primary Dutch and other
non-domestic operating subsidiaries that ranged from 16.5% to 47%, and averaged
35%. The difference between statutory and effective rates was due primarily to a
reduction in the taxes paid by ING's Dutch insurance subsidiaries, for which the
statutory rate was 35% and the effective rate was 18.9% in 1996.

Net profits before Preference Share dividends increased NLG 672 million, or
25.4%, to NLG 3,321 million in 1996 compared to NLG 2,649 million in 1995,
reflecting the increased pre-tax results and lower overall tax rates described
above. The effect of exchange rate movements between the Dutch guilder and
certain of ING's primary operating currencies increased net profit by NLG 33
million in 1996.

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129

After payment of dividends on Preference Shares of NLG 46 million in each
of 1996 and 1995, net profit for ING increased NLG 672 million, or 25.8%, to NLG
3,275 million in 1996, compared to NLG 2,603 million in 1995.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Total income of ING increased NLG 4,155 million, or 11.2%, to NLG 41,203
million, from NLG 37,048 million in 1994, reflecting increases in income of
ING's insurance and banking operations of 8.8% and 19.5%, respectively. Total
expenditure increased NLG 3,640 million, or approximately 11%, from NLG 33,705
million in 1994 to NLG 37,345 million in 1995, reflecting increases of 8.4% and
20.2%, respectively, in total expenditure for ING's insurance and banking
operations. By geographic region, ING's result before taxation increased
significantly in the Netherlands, the Rest of Europe, North America and Asia,
which increases were offset in part by declines in South America and Australia.

Consolidated result before taxation increased NLG 508 million, or 15.4%, to
NLG 3,800 million in 1995 compared to NLG 3,292 million in 1994, reflecting
increases of 14.8% and 16.1%, respectively, for ING's insurance and banking
operations. ING's consolidated taxes of NLG 1,138 million in 1995 and NLG 994
million in 1994 represented overall effective tax rates of 29.9% and 30.2%,
respectively, compared to statutory rates for ING's primary Dutch and other
non-domestic operating subsidiaries that ranged from 16.5% to 47%, and averaged
35%. The difference between statutory and effective rates was due primarily to a
reduction in the taxes paid by ING's Dutch insurance subsidiaries, for which the
statutory rate was 35% and the effective rate was 24.9% in 1995.

Net profits before Preference Share dividends increased NLG 347 million, or
15.1%, to NLG 2,649 million in 1995 compared to NLG 2,302 million in 1994,
reflecting the increased pre-tax results and lower overall tax rates described
above, which more than offset the effect of unfavorable exchange rate movements
between the Dutch guilder and certain of ING's primary operating currencies,
which reduced net profit in 1995 compared to 1994 by NLG 115 million.

After payment of dividends on Preference Shares of NLG 46 million in each
of 1995 and 1994, net profit for ING increased NLG 347 million, or 15.4%, to NLG
2,603 million in 1995, compared to NLG 2,256 million in 1994.

ING's operations in 1995 were significantly affected by the acquisitions of
Barings and Wellington, each as noted below in the discussion of the results of
ING's insurance and banking segment operations.

CONSOLIDATED ASSETS AND LIABILITIES

The following table sets forth ING's consolidated assets and liabilities at
December 31, 1994, 1995 and 1996.

YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
----- ----- -----
(NLG BILLIONS, EXCEPT
PER SHARE AMOUNTS)

Investments..................................................... 188.5 153.8 138.3
Bank lending.................................................... 201.8 166.5 150.1
Total assets.................................................... 483.9 396.3 353.7
Insurance provisions
Life.......................................................... 110.7 97.1 88.5
Non-life...................................................... 10.7 9.7 8.9
----- ----- -----
Total insurance provisions................................. 121.4 106.8 97.4
Funds entrusted to and debt securities of the banking
operations(1)................................................. 204.9 176.4 160.0
Due to banks.................................................... 72.4 52.0 41.2
Total liabilities............................................... 449.8 372.5 331.9
Shareholders' equity.......................................... 34.1 23.8 21.8
Shareholders' equity per Ordinary Share......................... 45.15 33.32 31.84
----- ----- -----

- ---------------

(1) Funds entrusted to and debt securities of the banking operations consists of
savings accounts, deposits, other bank funds and debt securities privately
issued by ING Bank.

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130

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Total assets increased by 22.1% in 1996 to NLG 483.9 billion. Investments
grew by NLG 34.7 billion, or 22.6%, to NLG 188.5 billion in 1996 from NLG 153.8
billion in 1995, of which amount NLG 21.5 billion related to growth in insurance
investments and NLG 13.2 billion related to growth in banking investments.

Bank lending recorded growth of NLG 35.3 billion, or 21.2%, rising to NLG
201.8 billion at the end of 1996. Of this amount NLG 150.6 billion related to
lending in the Netherlands and NLG 51.2 billion to international lending.
Mortgage lending accounted for NLG 15.4 billion of the NLG 35.3 billion
increase.

Group shareholders' equity increased by 43.5% to NLG 34,124 million at
December 31, 1996 compared to NLG 23,777 million at December 31, 1995. This
substantial increase was mainly due to increases in the value of the investments
representing shareholders' equity of ING's insurance subsidiaries (NLG 6,703
million), retained profit for 1996 (NLG 1,714 million), the effect of favorable
currency exchange rates (NLG 590 million), the exercise of warrants (NLG 778
million) and shareholders' elections to take dividends paid in 1996 (for the
year ended 1995 and the interim dividend for 1996) in the form of Ordinary
Shares (NLG 859 million).

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Total assets increased by 12% in 1995 to NLG 396.3 billion. Investments
grew by NLG 15.5 billion, or 11.2%, to NLG 153.8 billion in 1995 from NLG 138.3
billion in 1994, of which amount NLG 13 billion related to growth in insurance
investments and NLG 2.5 billion related to growth in banking investments.

Bank lending recorded growth of NLG 16.4 billion, or 10.9%, rising to NLG
166.5 billion at the end of 1995 from NLG 150.1 billion at the end of 1994. Of
this amount, NLG 129.9 billion related to lending in the Netherlands and NLG
36.6 billion to international lending. Mortgage lending, primarily Dutch
residential mortgages, accounted for NLG 8.4 billion of the NLG 16.4 billion
increase.

Shareholders' equity increased by 9.3% to NLG 23,777 million at December
31, 1995 compared to NLG 21,758 million at December 31, 1994. Write-offs of
goodwill arising in connection with the acquisitions of Barings and Wellington
totaling NLG 1,578 million (which write-offs are directly charged in full to
shareholders' equity), adverse effects of exchange rate movements of NLG 699
million, and the addition to provisions for longevity risk described below, were
more than compensated for by retained profits of NLG 1,400 million and an NLG
2,873 million increase in the value of the equity portfolio of the insurance
operations.

ING issues ANNUITY contracts which provide guaranteed life benefits under
defined benefit retirement plans of client companies. These contracts have
significant mortality risks, namely the risk that recipients of annuities will
live longer than according to valuation mortality assumptions (longevity risk).
In 1993, ING recognized that it had adverse experience related to these products
because of better mortality than originally anticipated in many of its
contracts. At that time, ING developed a 15-year program to accrue for the
needed reserve strengthening and began accruing in 1993. This accrual was
recorded through charges to the income statement in 1993 and 1994. However, in
1995, there was a change in regulations by the Dutch Insurance Supervisory Board
(Verzekeringskamer), recommending that the remaining balance of future accruals
for this reserve strengthening be fully recognized as an addition to provisions.
Pursuant to Dutch GAAP, the required addition to provisions was directly
debited, in full, to shareholders' equity. The non-recurring charge arising out
of this change in accounting principles amounted to NLG 1,025 million after
taxation, which was charged to shareholders' equity as an adjustment to the
opening balance at January 1, 1995.

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131

RESULT FROM OPERATIONS BY BUSINESS SEGMENT

INSURANCE OPERATIONS

The following table sets forth selected financial information for ING's
consolidated insurance operations for the years ended December 31, 1994, 1995
and 1996.

YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

Income from insurance operations
Gross premiums written:
Life......................................................... 17,135 14,844 13,974
Non-life..................................................... 7,187 6,667 6,403
------ ------ ------
Total..................................................... 24,322 21,511 20,377
Investment income.............................................. 11,073 9,605 8,202
Commissions and other income................................... 472 364 345
------ ------ ------
Total Income.............................................. 35,867 31,480 28,924
Net premiums written:
Life......................................................... 16,636 14,318 13,652
Non-life..................................................... 6,604 6,101 5,916
------ ------ ------
Total..................................................... 23,240 20,419 19,568
Result before taxation from insurance activities:
Life......................................................... 1,207 1,097 953
Non-life..................................................... 437 339 295
Insurance operations -- general(1)........................... 854 670 586
------ ------ ------
Total..................................................... 2,498 2,106 1,834
Taxation....................................................... 613 582 518
Third-party interests.......................................... 1 (3) 2
------ ------ ------
Net Profit................................................... 1,884 1,527 1,314
====== ====== ======

- ---------------

(1) Insurance operations -- general consists of results of insurance holding
companies and non-insurance companies included within ING Insurance, as well
as income from investments allocated to the capital and surplus of ING's
insurance companies. See Note 4.12 of Notes to the Consolidated Financial
Statements.

The following table sets forth the breakdown of gross premiums written and
results before taxation by geographic area for ING's consolidated insurance
operations for each of the years indicated.

GROSS PREMIUMS WRITTEN RESULT BEFORE TAXATION
---------------------------- -------------------------
1996 1995 1994 1996 1995 1994
------ ------ ------ ----- ----- -----
(NLG MILLIONS)

The Netherlands........................ 10,705 10,109 8,890 1,620 1,386 1,181
Rest of Europe......................... 2,198 1,916 1,627 164 146 69
North America.......................... 7,664 6,644 6,740 491 490 367
South America.......................... 139 133 137 20 (61) (7)
Asia................................... 1,569 1,385 1,139 92 61 77
Australia.............................. 2,012 1,275 1,801 92 61 122
Other.................................. 265 282 309 19 23 25
Premiums between geographic areas(1)... (230) (233) (266) -- -- --
------ ------ ------ ----- ----- -----
Total............................. 24,322 21,511 20,377 2,498 2,106 1,834
====== ====== ====== ===== ===== =====

- ---------------

(1) Represents reinsurance premiums ceded between Group companies in different
geographic areas.

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132

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

On a consolidated basis, ING's insurance operations contributed NLG 2,498
million and NLG 2,106 million to ING's results before taxation in 1996 and 1995,
respectively, and NLG 1,884 million and NLG 1,527 million to ING's net profits
in these years.

Total Income. Total income from insurance operations in 1996 increased by
NLG 4,387 million, or 13.9%, to NLG 35,867 million, from NLG 31,480 million in
1995, reflecting increases in premiums written and investment income. Gross
premiums written in ING's life and non-life operations increased by 15.4% and
7.8%, respectively, over 1995 levels. Growth in 1996 gross premiums written was
attributable primarily to ING's insurance operations in North America and
Australia. ING's overall retention level increased from 94.9% in 1995 to 95.6%
in 1996. Investment income increased by 15.3% over 1995 levels, reflecting
increases to realized and unrealized gains on investments held for the risk of
policyholders, as well as overall growth in insurance investments.

Fluctuations in exchange rates, primarily relating to the positive effect
of changes in the U.S., Canadian and Australian dollar rates, offset in part by
the weakening of the Japanese yen rate, increased ING's 1996 insurance-related
income in guilder terms by NLG 607 million, consisting of NLG 222 million, NLG
217 million and NLG 168 million in respect of life premiums, non-life premiums
and investment income, respectively.

Result Before Taxation. The result before taxation from ING's insurance
activities increased in 1996 by NLG 392 million or 18.6%, to NLG 2,498 million,
from NLG 2,106 million in 1995, reflecting growth in each of life, non-life and
insurance operations -- general. Eliminating the effect of foreign exchange rate
movements, which increased 1996 results before taxation by NLG 23 million, the
result before taxation increased by NLG 369 million, or 17.5%, over 1995 levels.

ING has given high priority to cost control in recent years and has sought
to maintain premium growth in its insurance operations above growth in its
operating expenditure. In 1996, ING's expenditures from insurance operations
increased by 11.8%, while gross premiums written increased by 13.1%. The
increased expense levels in 1996 reflect in part anticipated information
technology investments and restructuring costs of NLG 161 million in 1996
against NLG 101 million in 1995, and NLG 61 million of additional anticipated
information technology expenses in 1996 related to preparation for the
introduction of the euro and preparation to avoid the potential adverse effects
on computer systems of reaching the year 2000, in each case relating to ING's
Dutch insurance operations.

Taxation. The overall effective tax rate in 1996 for ING's insurance
operations was 24.5%, compared to a 27.6% rate in 1995. The effective tax rate
for the year 1996 was lower than the average statutory tax rate of 35%
applicable to ING's Dutch and non-Dutch insurance subsidiaries in that year due
to tax exemptions totaling, in 1996, NLG 261 million available to ING's Dutch
insurance subsidiaries. Such exemptions arose primarily in respect of tax-exempt
dividends received from Dutch listed companies in which ING held more than 5% of
the outstanding shares. The NLG 112 million increase in tax exemptions for 1996
over 1995 was mainly due to a higher level of tax exempt dividends in 1996 over
1995 by such Dutch listed companies.

Net Profit. Net profit for ING's insurance operations in 1996 increased by
NLG 357 million, or 23.4%, compared with 1995, to NLG 1,884 million.
Disregarding the effect of the exchange rate movements, which increased net
profit in 1996 by approximately NLG 19 million after tax, net profit for ING's
insurance operations increased by NLG 338 million, or 22.1%, over 1995 levels.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

On a consolidated basis, ING's insurance operations contributed NLG 2,106
million and NLG 1,834 million to ING's results before taxation in 1995 and 1994,
respectively, and NLG 1,527 million and NLG 1,314 million to ING's net profits
in such years.

118
133

Total Income. Total income from insurance operations in 1995 increased by
NLG 2,556 million, or 8.8%, to NLG 31,480 million, from NLG 28,924 million in
1994, reflecting increases in premiums written and investment income. Gross
premiums written in ING's life and non-life operations increased by 6.2% and
4.1%, respectively, over 1994 levels. Growth in 1995 gross premiums written was
attributable primarily to ING's insurance operations in the Netherlands, the
Rest of Europe and Asia, offset in part by an NLG 526 million decrease in gross
premiums written in Australia. ING's overall retention level decreased from 96%
in 1994 to 94.9% in 1995. Investment income increased by 17.1% over 1994 levels,
primarily reflecting increases in realized and unrealized gains on investments
held for the benefit of policyholders, as well as overall growth in insurance
investments.

Insurance income also benefitted from the acquisition by ING in January
1995 of Wellington, which added NLG 412 million in gross written premiums and
NLG 26 million in investment income in 1995.

Exchange rate fluctuations primarily relating to U.S., Canadian and
Australian dollar rates, reduced ING's 1995 total insurance-related income in
guilder terms by NLG 1,571 million, consisting of NLG 783 million, NLG 434
million and NLG 354 million in respect of life and non-life premiums and
investment income, respectively.

Result Before Taxation. The result before taxation from ING's insurance
activities increased in 1995 by NLG 272 million, or 14.8%, to NLG 2,106 million,
from NLG 1,834 million in 1994, reflecting growth in each of life, non-life and
insurance operations -- general. Eliminating the effect of the Wellington
acquisition described above, which increased 1995 results before taxation by NLG
14 million, and foreign exchange rate movements, which reduced 1995 results
before taxation by NLG 89 million, ING's result before taxation increased by NLG
347 million, or 18.9%, over 1994 levels.

In 1994, premium growth of 10.1% exceeded growth in expenditure from
insurance operations by 5.2%, in each case disregarding exchange rate movements
and changes in the composition of ING. In 1995, however, ING's expenditure from
insurance operations increased by 11.6% over 1994 levels, while gross premiums
written increased by 9.5% over 1994 levels, in each case disregarding exchange
rate movements and the effect of the acquisition of Wellington. The increased
expense levels in 1995 reflect primarily NLG 101 million in respect of
anticipated information technology investments and restructuring costs, in each
case relating to ING's Dutch insurance operations.

Taxation. The overall effective tax rate in 1995 for ING's insurance
operations was 27.6%, compared to a 28.2% rate in 1994. The effective tax rate
for the year 1995 was lower than the statutory tax rate of 35% applicable in the
Netherlands to ING's primary Dutch and non-Dutch insurance subsidiaries in such
year due to tax exemptions totaling, in 1995, NLG 155 million available to ING's
Dutch insurance subsidiaries. Such exemptions arose primarily in respect of
tax-exempt dividends received from Dutch listed companies in which ING held more
than 5% of the outstanding shares.

Net Profit. Net profit for ING's insurance operations in 1995 increased by
NLG 213 million, or 16.2%, compared with 1994, to NLG 1,527 million.
Disregarding the effect of the Wellington acquisition, which increased net
profit in 1995 by approximately NLG 8 million, and of exchange rate movements,
which reduced net profit in 1995 by approximately NLG 61 million net profit for
ING's insurance operations increased by NLG 266 million, or 20.2%, over 1994
levels.

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134

Life Insurance Operations

The following table sets forth certain summarized financial information for
ING's life insurance operations for the years indicated.

YEAR ENDED DECEMBER 31
-------------------------------
1996 1995 1994
------- ------- -------
(NLG MILLIONS)

Gross premiums............................................... 17,135 14,844 13,974
------- ------- -------
Net premiums (net of reinsurance premiums ceded of NLG 499
million, NLG 526 million and NLG 322 million, in 1996,
1995, and 1994, respectively).............................. 16,636 14,318 13,652
Investment income............................................ 8,322 7,042 5,734
Other underwriting income.................................... 56 43 59
------- ------- -------
Total income............................................ 25,014 21,403 19,445
Life policy benefits paid or provided for.................... 21,206 17,986 16,349
Operating expenses........................................... 2,591 2,315 2,135
Other expenditures........................................... 10 5 8
------- ------- -------
Total expenditures...................................... 23,807 20,306 18,492
------- ------- -------
Result before taxation....................................... 1,207 1,097 953
====== ====== ======

The following table sets forth ING's gross life premiums by geographic area
and type of product for the years indicated.

YEAR ENDED DECEMBER 31
------------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

THE NETHERLANDS
Individual
Single premium............................................. 2,196 2,063 1,499
Periodic premium........................................... 2,647 2,431 2,066
------ ------ ------
Total................................................... 4,843 4,494 3,565
Group
Single premium............................................. 1,156 854 907
Periodic premium........................................... 1,748 1,913 1,820
------ ------ ------
Total................................................... 2,904 2,767 2,727
Reinsurance assumed.......................................... 113 197 20
------ ------ ------
Total................................................... 7,860 7,458 6,312
REST OF EUROPE
Individual
Single premium............................................. 391 368 213
Periodic premium........................................... 1,185 982 862
------ ------ ------
Total................................................... 1,576 1,350 1,075
Group
Single premium............................................. 39 20 22
Periodic premium........................................... 133 120 120
------ ------ ------
Total................................................... 172 140 142
------ ------ ------
Total................................................. 1,748 1,490 1,217

120
135

YEAR ENDED DECEMBER 31
------------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

NORTH AMERICA
Individual
Single premium............................................. 1,896 1,314 1,671
Periodic premium........................................... 1,914 1,750 1,538
------ ------ ------
Total................................................... 3,810 3,064 3,209
Group
Single premium............................................. 418 399 550
Periodic premium........................................... 70 58 73
------ ------ ------
Total................................................... 488 457 623
Reinsurance assumed.......................................... 288 277 257
------ ------ ------
Total................................................... 4,586 3,798 4,089
SOUTH AMERICA
Individual
Single premium............................................. 7 5 9
Periodic premium........................................... 17 17 35
------ ------ ------
Total................................................... 24 22 44
Group
Single premium............................................. 5 11 0
Periodic premium........................................... 23 21 5
------ ------ ------
Total................................................... 28 32 5
------ ------ ------
Total................................................. 52 54 49
ASIA
Individual
Single premium............................................. 1 2 1
Periodic premium........................................... 1,428 1,265 1,028
------ ------ ------
Total................................................... 1,429 1,267 1,029
Group
Single premium............................................. -- -- --
Periodic premium........................................... 17 17 14
------ ------ ------
Total................................................... 17 17 14
------ ------ ------
Total................................................. 1,446 1,284 1,043
AUSTRALIA
Individual
Single premium............................................. 53 34 83
Periodic premium........................................... 106 79 75
------ ------ ------
Total................................................... 159 113 158
Group
Single premium............................................. 927 385 825
Periodic premium........................................... 356 261 280
------ ------ ------
Total................................................... 1,283 646 1,105
------ ------ ------
Total................................................. 1,442 759 1,263

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136

YEAR ENDED DECEMBER 31
------------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

OTHER
Reinsurance assumed.......................................... 5 4 7
Premiums between geographic areas(1)......................... (4) (3) (6)
------ ------ ------
Total................................................... 17,135 14,844 13,974
====== ====== ======

- ---------------

(1) Represents reinsurance premiums ceded between ING companies in different
geographic areas.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Premium Income. Gross premium income of ING's life operations in 1996
increased by NLG 2,291 million, or 15.4%, over 1995 levels. Disregarding the
effect of exchange rate movements, which increased 1996 premium income by NLG
222 million, and the effect of acquisitions, which increased premium income by
NLG 16 million, premium income increased by 13.8%.

In the Netherlands, premium income increased by NLG 402 million, or 5.4%,
to NLG 7,860 million. Such increase was primarily due to increases in individual
and group premiums of 7.8% and 5%, respectively. The increase in individual
premiums reflected a high level of new business which management believes is
attributable in part to NN Life's increased marketing activities, especially in
investment products, mortgage linked life products and group pensions. Group
premium income increased by 5%, despite the low increase in salaries (premium
income from Group policies being linked in part to salary levels of
participants). Sales of individual life insurance via ING Bank's branches
increased from 8.8% of new individual periodic life insurance premiums written
by Nationale-Nederlanden in 1995 to 9% of new individual periodic life insurance
premiums written by Nationale-Nederlanden in 1996. Gross premium income from
life insurance sold by Postbank Life Insurance increased to NLG 359 million in
1996, from NLG 326 million in 1995.

In the Rest of Europe, premium income increased by NLG 258 million, or
17.3%, to NLG 1,748 million, mainly due to the growth of income from individual
PERIODIC PREMIUM PRODUCTS. Premiums from the greenfield operations in Italy and
Poland increased by 48%, representing an increase from NLG 92 million to NLG 110
million in Italy and an increase from NLG 6 million to NLG 35 million in Poland.
Premiums from ex-greenfield operations in the Czech Republic, Greece, Hungary
and Spain increased by 23.1%.

In North America, premium income increased by NLG 788 million, or 20.7%, to
NLG 4,586 million, reflecting strong sales of individual single premium
policies. Excluding the effect of the dollar/guilder exchange rate, premium
income increased by 14.9%. On a constant currency basis this increase reflected
higher sales of GICs and strong sales of reinsurance products in the United
States and higher sales of saving and risk products in Canada.

In Asia, premium income increased by NLG 162 million, or 12.6%, to NLG
1,446 million. Such increase occurred in individual periodic premium products,
which represent ING's primary Asian insurance products. Premium income in Japan
rose by NLG 151 million (25.4% growth in local currency) to NLG 1,281 million,
partly due to the sale of products through a second distribution channel, while
in Taiwan, premium income increased by NLG 24 million (38.3% growth in local
currency) to NLG 84 million, due to expansion of the sales force and an
improvement in policy persistency. The increase in premium income in Asia was
offset in part by a further decline in premium income in South Korea, which
decreased by 13.8% to NLG 81 million in 1996 from NLG 94 million in 1995.

In Australia, premium income increased by NLG 683 million, or 90%, to NLG
1,442 million, reflecting an improved investment environment following
unfavorable market conditions in 1995. The improved investment environment
resulted in a significant rise in the sale of group single premium products.

122
137

Net premiums written in 1996 and 1995 reflected premiums ceded to
reinsurers of NLG 499 million and NLG 526 million, respectively, resulting in
overall retention levels of approximately 97.1% in 1996 and 96.5% in 1995. Net
premiums earned increased by NLG 2,318 million, or 16.2%, from NLG 14,318
million in 1995 to NLG 16,636 million in 1996.

Life Policy Benefits Paid or Provided For. Life policy benefits paid or
provided for consist of life benefits paid to policyowners and beneficiaries,
increases in life insurance provisions and profit sharing and rebates for
policyholders. Total life policy benefits increased by NLG 3,220 million, or
17.9%, to NLG 21,206 million from NLG 17,986 million in 1995, in each case net
of reinsurance. Life policy benefits paid and insurance provisions increased by
NLG 2,746 million, or 17.3%, to NLG 18,662 million. This growth reflects
currency influences, the growth in premiums written and the continued use of
conservative interest assumptions with respect to the calculation of provisions
for life policy liabilities. Profit sharing and rebates, which consist of
distributions (in the form of a reduction of premiums or credits) to
policyholders on account of portfolio yield or the results of the policy issuing
company, totaled NLG 1,832 million in 1996 and NLG 1,411 million in 1995, and
bonuses added to policies totaled NLG 712 million in 1996 and NLG 659 million in
1995. The NLG 421 million, or 29.8%, increase in distributions to policyholders
in 1996 over 1995 resulted mainly from the periodic revaluation of investments
in equities underlying policies for which investment risks are borne by
policyholders, reflecting continued strong performances by the Dutch and foreign
stock markets in 1996.

Operating Expenditure. Life operating expenditures (including other
expenditures), which consist primarily of salaries and commissions, increased by
NLG 281 million, or 12.1%, from NLG 2,320 million in 1995 to NLG 2,601 million
in 1996, principally reflecting the increases in premiums written noted above.
NLG 47 million of the increase reflected higher anticipated information
technology investments, restructuring costs and information technology costs
related to the introduction of the euro and preparation to avoid the potential
adverse effects on computer systems of reaching the year 2000.

Result Before Taxation. The result before taxation from life insurance
operations in 1996 increased by NLG 110 million, or 10%, compared with 1995, to
NLG 1,207 million, primarily as a result of significant growth in ING's
Netherlands operations. The following table sets forth a geographic breakdown of
the changes in the result before taxation of ING's life operations.

RESULT BEFORE
TAXATION
FOR YEAR ENDED
DECEMBER 31,
----------------
1996 1995
----- -----
(NLG MILLIONS)

The Netherlands.......................................... 919 819
Rest of Europe........................................... 35 23
North America............................................ 178 192
South America............................................ 2 (1)
Asia..................................................... 52 38
Australia................................................ 22 21
Other.................................................... (1) 5
----- -----
Total.................................................... 1,207 1,097

In the Netherlands, the result before taxation increased NLG 100 million,
or 12.2%, over 1995 levels, to NLG 919 million, reflecting improved margins on
certain group and single premium policies as well as increased investment
income.

In the Rest of Europe, the result before taxation increased by NLG 12
million in 1996, reflecting an increase of NLG 25 million in the Czech Republic
and Hungary and reduced losses in Italy. This increase was partially offset by a
loss of NLG 7 million for the newly started greenfield operation in Slovakia and
a decrease in the life results in Greece due to reserve strengthening amounting
to NLG 10 million.

123
138

In North America, the result before taxation decreased by NLG 14 million,
or 7.3%, to NLG 178 million, reflecting increased results in the United States
totaling NLG 23 million, offset by decreases of NLG 32 million in Canada and NLG
5 million in start-up losses of ING's greenfield operation in Mexico. In the
United States, improved results at certain of its insurance operations were
offset in part by decreased results due to adverse market conditions,
restructuring costs and reserve strengthening. The results of NN Financial in
Canada decreased by NLG 32 million, due to additional provisioning for higher
than expected operating costs.

In Asia, the result of operations increased by NLG 14 million, or 36.8%, to
NLG 52 million. Results of NN Life Insurance Company Japan increased by NLG 43
million, offset by decreased results in the South Korean subsidiary and in
Taiwan, as well as start-up costs for new greenfield operations in the
Philippines and costs associated with the potential development of insurance
operations in China, Thailand, Indonesia and India, which had a negative impact
of NLG 29 million on the result before taxation.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Premium Income. Gross premium income of ING's life operations in 1995
increased NLG 870 million, or 6.2%, over 1994 levels. Disregarding the effect of
exchange rate movements, which reduced 1995 premium income by NLG 783 million,
premium income increased by 11.8%.

In the Netherlands, premium income increased by NLG 1,146 million, or
18.2%, to NLG 7,458 million. Such increase was due almost entirely to increased
sales of individual premium products, primarily retirement products. SINGLE
PREMIUM PRODUCT sales in which ING bears the investment risk (which consist
primarily of pension plans), increased by NLG 566 million to NLG 1,993 million.
In individual periodic premium products, income on policies in which the
policyholder bears the investment risk (primarily unit-linked policies)
increased by NLG 274 million to NLG 429 million. Premium income from group
products was generally flat, as growth in periodic premium products of NLG 93
million was offset by an NLG 53 million decline in income from single premium
products. Sales of individual life insurance via ING Bank's branches increased
from 6.6% of new individual periodic life insurance premiums written by
Nationale-Nederlanden in 1994 to 8.8% of new individual periodic life insurance
premiums written by Nationale-Nederlanden in 1995. Gross premium income from
life insurance sold by Postbank Life Insurance increased to NLG 326 million in
1995 from NLG 82 million in 1994.

In the Rest of Europe, premium income increased by NLG 273 million, or
22.4%, over 1994 levels. Substantially all of this growth is attributable to
growth in individual premium products. Premiums from the life operations of De
Vaderlandsche, a Belgian insurance subsidiary, increased NLG 139 million, or
39.7%, to NLG 489 million, from NLG 350 million in 1994. Life greenfield
operations in Europe also developed well, with premium income increasing by NLG
99 million, or 41.6%, primarily reflecting growth at NN Hungary and NN Life
Czech.

In North America, individual and group premium volumes declined, primarily
due to declines in single premium products. Premium income at ING America Life
decreased by NLG 308 million, due primarily to the effect of dollar/guilder
exchange rate movements. On a constant currency basis, premium income increased
by 4.1%, reflecting strong growth in sales of periodic individual premium
products offset by lower sales of GICs in 1995 compared to the high levels of
sales of this product in 1994.

In Asia, life operations increased, with the exception of NN Korea. Such
growth occurred in individual, periodic premium products, which represent ING's
primary Asian insurance products. Premium income in Japan rose by NLG 243
million (32.8% growth in local currency) to NLG 1,130 million. In Taiwan,
premium income increased by NLG 9 million (34% growth in local currency) to NLG
60 million. Premium income in South Korea decreased by 10.5% to NLG 94 million.

In Australia, premium income decreased by 40% to NLG 759 million, primarily
reflecting decreased sales of investment products due to an unfavorable
investment environment.

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139

Net premiums written in 1995 and 1994 reflected premiums ceded to
reinsurers of NLG 526 million and NLG 322 million, respectively, resulting in
overall retention levels of approximately 96.5% in 1995 and 97.7% in 1994. Net
premiums increased by NLG 666 million, or 4.9%, from NLG 13,652 million in 1994
to NLG 14,318 million in 1995.

Life Policy Benefits Paid or Provided For. Total life policy benefits
increased by NLG 1,637 million, or 10%, to NLG 17,986 million from NLG 16,349
million in 1994, in each case net of reinsurance. Life policy benefits paid and
insurance provisions increased by NLG 1,098 million, or 7.4%, to NLG 15,916
million. This modest growth reflects negative currency influences, a growth in
premiums written and the continued use of conservative interest assumptions with
respect to the calculation of provisions for life policy liabilities. Profit
sharing and rebates, which consist of distributions (in the form of a reduction
of premiums or credits) to policyholders on account of portfolio yield or the
results of the policy issuing company, totaled NLG 1,411 million in 1995 and NLG
906 million in 1994, and bonuses added to policies totaled NLG 659 million in
1995 and NLG 625 million in 1994. The increase of NLG 505 million, or 55.7%, in
distributions to policyholders in 1995 over 1994 resulted mainly from the
periodic revaluation of investments in equities underlying policies for which
investment risks are borne by policyholders, reflecting strong performances by
Dutch and foreign stock markets in 1995.

Operating Expenditure. Life operating expenditures (including other
expenditures), which consist primarily of salaries and commissions, increased by
NLG 177 million, or 8.3%, from NLG 2,143 million in 1994 to NLG 2,320 million in
1995, principally reflecting the increases in premiums written noted above.
Approximately NLG 39 million of the increase reflected anticipated information
technology investments and restructuring costs.

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140

Result Before Taxation. The result before taxation from life insurance
operations in 1995 increased by NLG 144 million, or 15.1%, compared with 1994,
to NLG 1,097 million, primarily as a result of significant growth in ING's
Netherlands operations. The following table sets forth a geographic breakdown of
the changes in the result before taxation of ING's life operations.

RESULT BEFORE
TAXATION
FOR YEAR ENDED
DECEMBER 31,
----------------
1995 1994
----- -----
(NLG MILLIONS)

The Netherlands.......................................... 819 689
Rest of Europe........................................... 23 (3)
North America............................................ 192 174
South America............................................ (1) 3
Asia..................................................... 38 53
Australia................................................ 21 34
Other.................................................... 5 3
----- -----
Total.................................................. 1,097 953
===== =====

In the Netherlands, growth in results before taxation of NLG 130 million,
or 18.9%, over 1994 levels reflected generally improved mortality experience for
term and other traditional life insurance products as well as for annuity
products in the accumulation phase.

In the Rest of Europe, the result before taxation increased by NLG 26
million, primarily reflecting reduced start-up losses for the life greenfield
operations in Poland and Italy, as well as improved results from life operations
in Belgium, the Czech Republic, Greece and Hungary.

In North America, the result increased by NLG 18 million, or 10.3%, to NLG
192 million. ING America Life's result increased by NLG 27 million, due to
favorable mortality experience and control of operational expenses, which
increase was offset in part by the start-up expenses of greenfield operations in
Mexico.

In Asia, the result of NN Life Insurance Company Japan decreased by NLG 28
million, due to provisioning for adverse interest rate developments in
connection with guaranteed interest credits. Losses in South Korea decreased by
NLG 7 million, reflecting the restructuring of the South Korean subsidiary's
sales force.

The result of Mercantile Mutual Life in Australia decreased by NLG 13
million, reflecting an unfavorable investment environment, which reduced the
return to policyholders on investment-linked products and resulted in the sharp
declines in Australian premium income discussed above.

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141

Non-life Insurance Operations

The following table sets forth certain summarized financial information for
ING's non-life operations for the years indicated.

YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
----- ----- -----
(NLG MILLIONS)

Gross premiums written................................. 7,187 6,667 6,403
Net premiums earned (net of reinsurance ceded of
NLG 583 million, NLG 566 million and NLG 487 million,
in 1996, 1995 and 1994, respectively)................ 6,429 5,969 5,818
Investment income...................................... 692 638 613
Other underwriting income.............................. 3 6 7
----- ----- -----
Total income......................................... 7,124 6,613 6,438
Claims and claims expenses............................. 4,427 4,184 4,199
Operating expenses..................................... 2,257 2,083 1,941
Other expenditures..................................... 3 7 3
----- ----- -----
Total expenditures................................... 6,687 6,274 6,143
----- ----- -----
Result before taxation................................. 437 339 295
===== ===== =====

The following table sets forth ING's non-life gross written premiums by
geographic area and principal class of business.

YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
----- ----- -----
(NLG MILLIONS)

THE NETHERLANDS
Fire................................................. 765 750 749
Automobile........................................... 649 580 515
Accident and health.................................. 976 866 860
Other................................................ 364 365 361
Reinsurance assumed.................................. 91 90 93
----- ----- -----
Total............................................. 2,845 2,651 2,578
REST OF EUROPE
Fire................................................. 109 102 97
Automobile........................................... 139 133 126
Accident and health.................................. 167 160 160
Other................................................ 33 29 25
Reinsurance assumed.................................. 2 2 2
----- ----- -----
Total............................................. 450 426 410
NORTH AMERICA
Fire................................................. 905 830 729
Automobile........................................... 1,289 1,171 1,068
Accident and health.................................. 517 489 482
Other................................................ 318 301 305
Reinsurance assumed.................................. 49 55 67
----- ----- -----
Total............................................. 3,078 2,846 2,651

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142

YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
----- ----- -----
(NLG MILLIONS)

SOUTH AMERICA
Fire................................................. 27 24 27
Automobile........................................... 27 25 30
Accident and health.................................. 29 26 27
Other................................................ 4 4 4
Reinsurance assumed.................................. -- -- --
----- ----- -----
Total............................................. 87 79 88
ASIA
Fire................................................. 15 13 14
Automobile........................................... 12 12 13
Accident and health.................................. 77 59 52
Other................................................ 12 11 10
Reinsurance assumed.................................. 7 6 7
----- ----- -----
Total............................................. 123 101 96
AUSTRALIA
Fire................................................. 213 206 209
Automobile........................................... 162 146 149
Accident and health.................................. 92 74 84
Other................................................ 102 89 95
Reinsurance assumed.................................. 1 1 1
----- ----- -----
Total............................................. 570 516 538
OTHER
Reinsurance assumed.................................. 260 278 302
----- ----- -----
Total............................................. 260 278 302
Premium income between geographic areas.............. (226) (230) (260)
----- ----- -----
7,187 6,667 6,403
===== ===== =====

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Premium Income. Gross premiums written in ING's non-life operations in
1996 increased by NLG 520 million, or 7.8%, over 1995 levels. Disregarding the
effect of exchange rate movements, which increased premium income by NLG 217
million, non-life premium income increased by 4.5%.

In the Netherlands, non-life premium income increased by NLG 194 million,
or 7.3%, to NLG 2,845 million, due to higher premiums in the accident and health
line, reflecting volume growth and the privatization of Sick Pay insurance, and
higher premiums in the automobile line, reflecting premium rate increases in
motor liability. Premium volumes and rates in ING's other non-life business
lines were stable.

In the Rest of Europe, non-life premium income increased by NLG 24 million,
or 5.6%, to NLG 450 million. All lines of business had modest growth in premium
income.

Non-life premium income in North America increased by NLG 232 million, or
8.2%, to NLG 3,078 million. Growth of premium income on a constant currency
basis was 2.7%. In the United States, non-life premium income increased by 4.8%.
On a constant currency basis, United States non-life premium income decreased
0.2% from 1995 levels due to price competition in commercial lines. In Canada,
non-

128
143

life premium income grew by 12.0% despite strong competition, which resulted in
some decline in rates, while on a constant currency basis, non-life premium
income increased 6.1% over 1995 levels.

In Asia, non-life premium income increased by NLG 22 million, or 21.8%, to
NLG 123 million, due to higher premium income in the accident and health line in
Taiwan, reflecting expansion of the sales force and improvement in PERSISTENCY.

In Australia, non-life premium income increased by NLG 54 million, or
10.5%, to NLG 570 million. All lines of business contributed to this growth.

Net non-life premiums written in 1996 and 1995 reflected premiums ceded to
reinsurers of NLG 583 million and NLG 566 million, respectively, resulting in an
overall retention level of approximately 91.9% in 1996 and 91.5% in 1995. Net
non-life premiums earned were NLG 6,429 million in 1996 compared to NLG 5,969
million in 1995, reflecting positive exchange rate movements, growth in gross
premiums written and the minor increase in ING's retention level.

Claims and Claims Expenses. Claims and claims expenses for ING's non-life
business increased by NLG 243 million, from NLG 4,184 million in 1995 to NLG
4,427 million in 1996, reflecting premium growth and exchange rate movements,
partly offset by a decrease in the loss ratio from 70.1% to 68.9%. Excluding the
1995 losses incurred as a result of Hurricane Luis, the loss ratio decreased by
0.1%. Claims paid increased by NLG 430 million to NLG 4,098 million, while the
addition to claims provisions decreased by NLG 187 million to NLG 329 million,
due in part to a decrease in estimated losses. The decrease in prior years'
estimated losses is largely related to the insurance operations in the
Netherlands, where changes in regulations affecting the availability of
disability benefits resulted in a release of related disability provisions in
1996, and in the United States, where ING has experienced favorable run-off of
workers' compensation and, to a lesser extent, favorable run-off of commercial
auto liability and commercial multi-peril provisions.

Operating Expenses. Operating expenses (including other expenditures),
consisting primarily of salaries and commissions, increased by NLG 170 million
in 1996, to NLG 2,260 million from NLG 2,090 million in 1995. Approximately NLG
44 million of this increase reflected higher anticipated information technology
investments, restructuring costs and costs related to the introduction of the
euro and preparations to avoid the potential adverse effects on computer systems
of reaching the year 2000.

Result Before Taxation. The result from non-life insurance operations in
1996 increased by NLG 98 million, or 28.9% compared with 1995, to NLG 437
million. Results for fire and accident and health in 1996 were lower than
results in 1995, while results for automobile, other and reinsurance assumed
improved. In 1995 ING's non-life result was negatively impacted by Hurricane
Luis (NLG 60 million). Excluding the 1995 losses incurred as a result of
Hurricane Luis, the result from non-life insurance operations in 1996 increased
by NLG 38 million, primarily reflecting higher results attributable to the
Australian and Asian operations. The automobile business of Mercantile Mutual
improved as a result of actions taken in 1995 by the Australian Government and
by Mercantile Mutual with regard to Compulsory Third Party ("CTP") business, a
mandatory form of third party bodily injury coverage. In Asia the accident and
health business in Taiwan further improved. The following table sets forth the
results before taxation of ING's non-life operations by geographic area and
principal class of business.

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144

YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
---- ----
(NLG MILLIONS)

THE NETHERLANDS
Fire..................................................... 49 61
Automobile............................................... 20 (23)
Accident and health...................................... 115 130
Other.................................................... 0 (1)
Reinsurance assumed...................................... 16 21
--- ---
Total................................................. 200 188
REST OF EUROPE
Fire..................................................... 3 4
Automobile............................................... 10 3
Accident and health...................................... 9 14
Other.................................................... 9 12
Reinsurance assumed...................................... 1 2
--- ---
Total................................................. 32 35
NORTH AMERICA
Fire..................................................... (73) 1
Automobile............................................... 101 64
Accident and health...................................... 48 56
Other.................................................... 8 (13)
Reinsurance assumed...................................... 22 6
--- ---
Total................................................. 106 114
SOUTH AMERICA
Fire..................................................... 0 (59)
Automobile............................................... 0 2
Accident and health...................................... 1 (1)
Other.................................................... 0 0
Reinsurance assumed...................................... -- (1)
--- ---
Total................................................. 1 (59)
ASIA
Fire..................................................... (2) 0
Automobile............................................... 0 0
Accident and health...................................... 20 6
Other.................................................... 2 1
Reinsurance assumed...................................... 2 (1)
--- ---
Total................................................. 22 6
AUSTRALIA
Fire..................................................... 2 1
Automobile............................................... (5) (34)
Accident and health...................................... (4) 2
Other.................................................... 19 15
Reinsurance assumed...................................... 3 6
--- ---
Total................................................. 15 (10)

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YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
--- ---
(NLG MILLIONS)

OTHER
Fire..................................................... 18 18
Automobile............................................... 5 0
Accident and Health...................................... 3 0
Other.................................................... (4) 0
Reinsurance assumed...................................... 39 47
--- ---
Total................................................. 61 65
--- ---
437 339
=== ===

The following sets forth loss, expense and combined ratio information for
ING's non-life operations by geographic area for the years 1996 and 1995.

YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------------------------------
TOTAL THE REST OF NORTH SOUTH
NON-LIFE NETHERLANDS EUROPE AMERICA AMERICA ASIA AUSTRALIA OTHER
-------- ----------- ------- ------- ------- ---- --------- -----

Loss ratio...................... 68.9% 66.4% 69.4% 70.8% 60.3% 45.7% 77.0% 68.7 %
Expense ratio................... 34.2% 36.4% 38.7% 32.1% 40.0% 31.7% 32.3% 20.5 %
Combined ratio.................. 103.1% 102.8% 108.1% 102.9% 100.3% 77.4% 109.3% 89.2 %

YEAR ENDED DECEMBER 31, 1995
-------------------------------------------------------------------------------
TOTAL THE REST OF NORTH SOUTH
NON-LIFE NETHERLANDS EUROPE AMERICA AMERICA ASIA AUSTRALIA OTHER
-------- ----------- ------- ------- ------- ---- --------- -----

Loss ratio...................... 70.1% 67.5% 70.7% 69.9% 151.6% 46.7% 79.5% 59.0 %
Expense ratio................... 34.1% 35.1% 38.2% 32.7% 40.9% 45.6% 33.4% 21.4 %
Combined ratio.................. 104.2% 102.6% 108.9% 102.6% 192.5% 92.3% 112.9% 80.4 %

In the Netherlands, non-life result before taxation increased by NLG 12
million, or 6.4%, to NLG 200 million. Result from the automobile line increased
by NLG 43 million, to a profit of NLG 20 million in 1996, reflecting the effects
of actions taken by ING in recent years, including premium rate increases and
theft prevention measures. Result from the accident and health line decreased by
NLG 15 million to NLG 115 million. The increase in the combined ratio reflected
an increase in the loss ratio from 73.7% to 74.4% and an increase in the expense
ratio from 25.2% to 26.8%. The result of the fire line decreased by NLG 12
million to NLG 49 million due to an NLG 24 million higher expense allocation
related to anticipated information technology investments, restructuring costs
and costs related to automation, restructuring and preparation for the
introduction of the euro and to avoid the potential adverse effects on computer
systems of reaching the year 2000. Similar expenses were also allocated to ING's
other non-life lines in the Netherlands but at lower levels.

In the Rest of Europe, non-life result before taxation decreased by NLG 3
million, or 8.6%, to NLG 32 million. Results from automobile business improved,
while all other lines of business showed lower results.

In North America, non-life result before taxation decreased by NLG 8
million, or 7%, to NLG 106 million. Result from automobile business improved
strongly, reflecting an improvement of 4.7 points in the automobile combined
ratio in Canada. ING's North American fire business deteriorated, especially in
the United States, reflecting severe winter weather and higher catastrophe
losses.

In South America, non-life result increased by NLG 60 million to NLG 1
million, from a loss of NLG 59 million in 1995 attributable to the large losses
sustained as a result of Hurricane Luis in that year.

In Asia, non-life result increased by NLG 16 million, or 266.7%, to NLG 22
million, primarily due to improved results from accident and health business.

131
146

In Australia, non-life results increased by NLG 25 million to NLG 15
million, due to improved results from automobile business, offsetting decreased
results from accident and health.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Premium Income. In 1995 gross premiums written from non-life operations
increased by NLG 264 million, or 4.1%, to NLG 6,667 million from NLG 6,403
million in 1994. Eliminating the effect of the Wellington acquisition, which
increased gross written premiums by NLG 412 million and of exchange rate
movements, which decreased 1995 gross written premiums by NLG 434 million,
premium income increased by 4.5%.

Premium income in the Netherlands increased by NLG 73 million to NLG 2,651
million, due principally to higher premiums in the automobile line, reflecting
overall growth in premium rates and unit growth. Premium volumes in ING's other
Dutch non-life lines of business were generally stable.

Non-life premium income in the Rest of Europe increased by NLG 16 million,
or 3.9%, to NLG 426 million. All classes of ING's non-life business contributed
to this growth, with the exception of accident and health lines, which remained
at 1994 levels.

In North America, premium income increased from NLG 2,651 million in 1994
to NLG 2,846 million in 1995. The increase of NLG 195 million primarily reflects
the acquisition of Wellington, which contributed NLG 412 million to ING's
non-life premiums in 1995. After eliminating the effects of this acquisition,
premium income in Canada decreased by NLG 108 million, primarily due to exchange
rate differences. On a constant currency basis, premium income in Canada
increased 2.1% over 1994 levels, reflecting ING's decision to slow growth in
light of rate pressures in the Canadian market. Premium income in the United
States declined NLG 109 million from 1994 levels, due to a decrease in the
exchange rate of the U.S. dollar with respect to the guilder. On a constant
currency basis, United States non-life premium income increased 6.0%.

Premium income in Australia decreased by NLG 22 million, or 4.1%, to NLG
516 million. This decrease was caused by a decrease in the exchange rate of the
Australian dollar with respect to the guilder. On a constant currency basis,
premium income increased by 7%.

Net non-life premiums written in 1995 and 1994 reflected premiums ceded to
reinsurers of NLG 566 million and NLG 487 million, respectively, resulting in
overall retention levels of approximately 91.5% in 1995 and 92.4% in 1994. Net
non-life premiums earned were NLG 5,969 million in 1995 compared to NLG 5,818
million in 1994, reflecting negative exchange rate movements, modest growth in
gross premiums written (4.5%, adjusted for changes resulting from the Wellington
acquisition and exchange rates) and a decrease in ING's retention level.

Claims and Claims Expenses. Claims and claims expenses for ING's non-life
business decreased by NLG 15 million, from NLG 4,199 million in 1994 to NLG
4,184 million in 1995, reflecting exchange rate movements and a decrease of the
loss ratio from 72.2% to 70.1%, offset by the acquisition of Wellington. On a
constant currency basis, claims and claims expenses were NLG 4,480 million. With
the exception of fire, all lines of business showed improved results. Claims
paid increased by NLG 52 million to NLG 3,668 million, and included amounts paid
in connection with Hurricane Luis and automobile coverages provided in Australia
with respect to the CTP business. The increase in claims provisions was NLG 67
million lower than 1994 levels, reflecting releases of provisions relating to
discontinued operations.

Excluding losses incurred as a result of catastrophes, the loss ratio
decreased by 3.2% to 69%. This decrease was the result of a decrease in the
estimated losses and loss expenses for claims which occurred in prior years and
a stable loss ratio of 73.4% for current years' losses in both 1994 and 1995.
The decrease in prior years' estimated losses is largely related to the
insurance operations in the Netherlands, where changes in regulations affecting
the availability of disability benefits resulted in a release of related
disability provisions in 1995, and in the United States, where ING has
experienced

132
147

favorable run-off of workers' compensation and, to a lesser extent, favorable
run-off of commercial auto liability and commercial multi-peril provisions.

Operating Expenses. Operating expenses (including other expenditures),
consisting primarily of salaries and commissions, increased by NLG 146 million
in 1995 to NLG 2,090 million, from NLG 1,944 million in 1994. Approximately NLG
62 million of this increase reflected anticipated information technology
investments and restructuring costs.

Result Before Taxation. The result from non-life insurance operations in
1995 increased by NLG 44 million, or 14.9%, compared with 1994, to NLG 339
million. The increase can be attributed to North America and the Netherlands,
where most classes of business reported improved results, offset in part by the
effects of Hurricane Luis in South America and losses associated with CTP
automobile business written by ING in Australia. The following table sets forth
the results before taxation of ING's non-life operations by geographic area and
principal class of business.

YEAR ENDED
DECEMBER 31,
---------------------
1995 1994
---- ----
(NLG MILLIONS)

THE NETHERLANDS
Fire....................................................... 61 37
Automobile................................................. (23) (27)
Accident and health........................................ 130 115
Other...................................................... (1) 6
Reinsurance assumed........................................ 21 15
--- ---
Total................................................... 188 146
REST OF EUROPE
Fire....................................................... 4 5
Automobile................................................. 3 (19)
Accident and health........................................ 14 15
Other...................................................... 12 10
Reinsurance assumed........................................ 2 1
--- ---
Total................................................... 35 12

NORTH AMERICA
Fire....................................................... 1 0
Automobile................................................. 64 16
Accident and health........................................ 56 31
Other...................................................... (13) (32)
Reinsurance assumed........................................ 6 (8)
--- ---
Total................................................... 114 7

SOUTH AMERICA
Fire....................................................... (59) 3
Automobile................................................. 2 (1)
Accident and health........................................ (1) (1)
Other...................................................... 0 0
Reinsurance assumed........................................ (1) 0
--- ---
Total................................................... (59) 1

ASIA
Fire....................................................... 0 1
Automobile................................................. 0 1
Accident and health........................................ 6 3
Other...................................................... 1 1
Reinsurance assumed........................................ (1) 0
--- ---
Total................................................... 6 6

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148

YEAR ENDED
DECEMBER 31,
---------------------
1995 1994
---(NLG MILLIONS)---

AUSTRALIA
Fire....................................................... 1 11
Automobile................................................. (34) 17
Accident and health........................................ 2 (12)
Other...................................................... 15 25
Reinsurance assumed........................................ 6 0
--- ---
Total................................................... (10) 41

OTHER
Fire....................................................... 18 48
Reinsurance assumed........................................ 47 34
--- ---
Total................................................... 65 82
--- ---
339 295
=== ===

The following table sets forth loss, expense and combined ratio information
for ING's non-life operations by geographic area for the years 1995 and 1994.

YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------------------
TOTAL THE REST OF NORTH SOUTH
NON-LIFE NETHERLANDS EUROPE AMERICA AMERICA ASIA AUSTRALIA OTHER
-------- ----------- ------- ------- ------- ---- --------- -----

Loss ratio.................... 70.1% 67.5% 70.7% 69.9% 151.6% 46.7% 79.5% 59.0%
Expense ratio................. 34.1% 35.1% 38.2% 32.7% 40.9% 45.6% 33.4% 21.4%
----- ----- ----- ----- ----- ---- ----- ----
Combined ratio................ 104.2% 102.6% 108.9% 102.6% 192.5% 92.3% 112.9% 80.4%

YEAR ENDED DECEMBER 31, 1994
--------------------------------------------------------------------------------------
TOTAL THE REST OF NORTH SOUTH
NON-LIFE NETHERLANDS EUROPE AMERICA AMERICA ASIA AUSTRALIA OTHER
-------- ----------- ------- ------- ------- ---- --------- -----

Loss ratio.................... 72.2% 70.9% 77.5% 74.8% 58.2% 53.0% 70.7% 50.9%
Expense ratio................. 32.8% 33.1% 37.9% 31.7% 38.9% 37.3% 34.9% 19.6%
----- ----- ----- ----- ----- ---- ----- ----
Combined ratio................ 105.0% 104.0% 115.4% 106.5% 97.1% 90.3% 105.6% 70.5%

In the Netherlands, non-life result before taxation increased from NLG 146
million in 1994 to NLG 188 million in 1995. This increase of NLG 42 million, or
28.8%, primarily reflected increases of NLG 24 million in the fire line, NLG 15
million in the accident and health line and NLG 6 million from reinsurance
assumed. Result in the automobile line improved slightly from 1994 levels, but
remained negative as results from third party liability coverages further
deteriorated due to intense competition in the Dutch market which restricted
ING's ability to effect sufficient rate increases. The result from other
automobile insurance coverages improved, however, allowing ING to maintain 1996
rates at 1995 levels in this market. In 1995 a vehicle theft prevention campaign
was started as a measure to reduce the loss ratio. The most important aspects of
this campaign are that the client is rewarded in case of voluntary theft
prevention measures and that theft prevention measures are required for more
expensive cars.

In the Rest of Europe, the results of most of the business units were
stable compared with 1994. The result of RVS Belgium improved by NLG 23 million,
due primarily to improved automobile insurance results.

In North America, non-life result before taxation increased NLG 107 million
over 1994 levels, reflecting improved automobile and other results at The
Netherlands Insurance Companies and ING Canada Corporation of NLG 71 million and
NLG 16 million (excluding results at Wellington), respectively, due to the mild
winter and the absence of catastrophes compared with 1994, and to improvement of
underwriting and claims handling. The results from accident and health insurance
at ING America Life

134
149

increased by NLG 13 million over 1994 levels, reflecting reduced litigation
costs following punitive damage losses in 1994 of NLG 27 million.

In South America, non-life result declined NLG 60 million from 1994 levels,
reflecting total gross claims from Hurricane Luis of NLG 142 million, of which
NLG 71 million was ceded to third party reinsurers and NLG 11 million was
released from ING's CATASTROPHE RESERVE. See Note 1.6.2.9 of the Notes to the
Consolidated Financial Statements for a discussion of this reserve.

In Australia, ING's non-life business recorded a loss of NLG 10 million, a
decrease of NLG 51 million, reflecting losses associated with ING's CTP
automobile business as a result of higher awards granted by courts. Mercantile
Mutual established additional reserves for this class of business in 1995.
Actions have been taken by the Australian Government and by Mercantile Mutual,
consisting of changes in legislation concerning damages and premium rate
increases, respectively, to address losses in the CTP line of business.

Insurance Operations -- General

The result from insurance holding companies and the result from
non-insurance companies included within ING Insurance are accounted for under
the item result from insurance operations -- general, together with investment
income relating to investments allocated to the capital and surplus of ING's
insurance companies. The remaining income from investments of ING's life and
non-life insurance companies is allocated to such companies on a legal entity
basis, and, in the case of companies conducting both life and non-life
operations, is allocated to such operations pro rata based on the average
insurance provisions held by each. ING does not believe that the trends in its
life and non-life insurance results would have differed materially in the years
1994-1996 from those presented herein had the investments of its insurance
operations and related investment income been allocated to life and non-life
operations solely on a legal entity basis. See Note 4.12 of Notes to the
Consolidated Financial Statements. The following table sets forth the result
from insurance operations -- general for the years indicated.

YEAR ENDED DECEMBER 31,
------------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

Investment income............................................ 11,073 9,605 8,202
Commission and other income.................................. 472 364 345
------ ------ ------
Total................................................... 11,545 9,969 8,547
Expenditure(1)............................................... (1,618) (1,570) (1,548)
------ ------ ------
9,927 8,399 6,999
Allocated to:
Life operations............................................ (8,378) (7,085) (5,793)
Non-life operations........................................ (695) (644) (620)
------ ------ ------
Result from insurance operations -- general.................. 854 670 586
====== ====== ======

- ---------------

(1) "Expenditure" consists of salaries and expenses related to ING's
insurance-related asset management operations, as well as allocated overhead
charges and interest charges.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

The result from insurance operations -- general in 1996 increased by NLG
184 million, or 27.5%, to NLG 854 million from NLG 670 million in 1995. After
eliminating the effect of exchange rate movements, which increased the result by
NLG 15 million, the increase was 25.2%, which is attributable to the return from
investments arising from retained profit in 1995 and higher dividend income from
investments in shares in 1996 compared to 1995.

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150

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

The result from insurance operations -- general in 1995 increased by NLG 84
million, or 14.3%, to NLG 670 million from NLG 586 million in 1994. This
increase can be attributed to the return from investments arising from retained
profit in 1994 and higher dividend income from investments in shares, partly
offset by the effect of exchange rate movements, which reduced the result by NLG
38 million.

Insurance Investments

The following table sets forth the components of the investment portfolio
of ING's insurance operations at the end of the years indicated.

AT DECEMBER 31,
---------------------------------
1996 1995 1994
------- ------- -------
(NLG MILLIONS)

Land and buildings(1)..................................... 8,924 8,165 8,168
Fixed-interest securities(2).............................. 90,044 79,017 69,661
Shares and convertible debentures(3)...................... 28,826 21,176 17,217
Interests in investment pools of the insurance
operations(4)........................................... 617 720 679
Deposits with insurers.................................... 58 52 46
Investments for risk for policyholders and investments of
annual life funds....................................... 23,519 19,929 18,879
------- ------- -------
151,988 129,059 114,650

- ---------------

(1) Including commuted ground rents.

(2) Includes NLG 2,272 million, NLG 1,990 million and NLG 958 million in 1996,
1995 and 1994, respectively, representing intercompany balances between
Group insurance and banking companies.

(3) "Shares and convertible debentures" of insurance investments includes ING
shares held by NN Life and other Dutch insurance subsidiaries, amounting to
NLG 2,754 million in 1996, NLG 1,637 million in 1995 and NLG 1,192 million
in 1994.

(4) "Interests in investment pools of the insurance operations" consists of
assets relating to certain large Dutch group life policies under which
coverage is provided by ING and other insurers.

The following table sets forth the income from investments, commissions and
other income of ING's insurance operations for the years indicated.

1996 1995 1994
------------------ ------------------ ------------------
PRE-TAX PRE-TAX PRE-TAX
INCOME YIELD(1) INCOME YIELD(1) INCOME YIELD(1)
------ -------- ------ -------- ------ --------
(NLG MILLIONS)

Land and buildings........................ 803 9.4% 788 9.6% 762 9.0%
Fixed-interest securities(2)(3)........... 6,994 8.2% 6,191 8.2% 5,974 8.8%
Shares and convertible debentures(4)...... 961 3.8% 778 4.1% 655 3.6%
Investments for the risk of policyholders
and investments of annual life
funds(5)................................ 2,315 1,848 811
Total(6)............................. 11,073 9,605 8,202
Commission and other income(7)............ 472 364 345
Total........................... 11,545 9,969 8,547
====== ===== =====

- ---------------

(1) Pre-tax yield is calculated using interest, rental, dividend and other
income received for each period, divided by the average of beginning and
year-end balances on related assets.

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151

(3) Includes mortgages and other loans.

(4) Income from shares and convertible debentures of the insurance operations
includes income relating to dividends on ING shares held by NN Life and
other Dutch insurance subsidiaries, amounting to NLG 72 million in 1996, NLG
58 million in 1995 and NLG 51 million in 1994.

(5) "Investments for risk of policyholders and investments of annual life
funds", which totaled NLG 23,519 million at December 31, 1996, consists
primarily of shares and convertible debentures (14%) and of fixed-interest
securities (79%). Any revaluation of shares which belong to this category is
taken to the profit and loss account as investment income for risk of
policyholders.

(6) Includes NLG 141 million, NLG 138 million and NLG 137 million in 1996, 1995
and 1994, respectively, representing intercompany interest between Group
insurance and banking companies.

(7) "Commission and other income" consists primarily of fees on asset management
and insurance brokering, results of minority interests and results from
financial transactions.

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

In 1996 income from investments of ING's insurance operations increased by
NLG 1,576 million, or 15.8%, to NLG 11,545 million, from NLG 9,969 million in
1995. Eliminating the effect of exchange rate movements, which increased 1996
investment income by NLG 168 million, income from investments increased by
14.1%.

Excluding commission income, investment income increased by NLG 1,468
million from NLG 9,605 million in 1995 to NLG 11,073 million in 1996. Higher
dividends and modest growth in the investment portfolio resulted in an increase
in income from investments in shares of NLG 183 million. Income from investments
for risk of policyholders, which is fully attributed to policyholders, increased
by NLG 467 million to NLG 2,315 million, primarily as a result of the periodic
revaluation of shares. Such income is reflected as profit sharing for
policyholders, and as a result gave rise to a corresponding increase in life
policy benefits paid or provided for. The remaining investment income,
consisting of the income from fixed interest securities and land and buildings,
increased by NLG 818 million from NLG 6,979 million to NLG 7,797 million,
reflecting further significant growth of the portfolio and currency influences
partly offset by a decreased investment yield due to turnover in the portfolio
and generally lower interest rates.

Income from commissions increased by NLG 53 million, or 27.2%, to NLG 248
million, primarily as a result of higher income from asset management in
Australia. Other income increased by NLG 55 million, or 32.5%, to NLG 224
million. Income relating to securities and participations increased by NLG 35
million, results from financial transactions increased by NLG 9 million and
other components included in other income increased, on balance, by NLG 11
million.

Expenditure increased by NLG 48 million, or 3.1%, to NLG 1,618 million. NLG
30 million of this increase reflected anticipated information technology
investments, restructuring costs and costs related to the introduction of the
euro and preparation to avoid the potential adverse effects on computer systems
of reaching the year 2000.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

In 1995 income from investments of ING's insurance operations increased by
NLG 1,422 million, or 16.6%, to NLG 9,969 million, from NLG 8,547 million in
1994. Eliminating the effect of the acquisition of Wellington (which increased
1995 investment income by NLG 26 million) and exchange rate movements (which
decreased 1995 investment income by NLG 354 million), income from investments
increased by 20.5%.

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152

Excluding commission income, investment income increased by NLG 1,403
million from NLG 8,202 million in 1994 to NLG 9,605 million in 1995. Higher
dividends and modest growth in the investment portfolio resulted in an increase
in income from investments in shares of NLG 123 million. Income from investments
for risk of policyholders increased by NLG 1,037 million, primarily as a result
of the periodic revaluation of shares. The remaining investment income,
consisting of income from fixed interest securities and land and buildings,
increased by NLG 243 million from NLG 6,736 million to NLG 6,979 million,
reflecting growth of the portfolio and changes arising from the acquisition of
Wellington on the one hand, and a decrease in the yield on investments, as a
result of generally lower interest rates and the negative currency influence, on
the other.

Income from commissions increased by NLG 24 million, or 14%, to NLG 195
million, primarily as a result of higher income from asset management in the
Netherlands. Other income decreased by NLG 5 million, or 2.9%, to NLG 169
million. Income relating to securities and participations increased by NLG 29
million, results from financial transactions decreased by NLG 28 million and
other components included in other income decreased, on balance, by NLG 6
million.

Expenditure increased by NLG 22 million, or 1.4%, to NLG 1,570 million.

BANKING OPERATIONS

The following table sets forth certain summary financial data for ING's
banking operations for the years indicated.

YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

Interest income................................................ 20,255 18,371 17,788
Interest expense............................................... 13,004 12,113 11,500
------ ------ ------
Net interest result............................................ 7,251 6,258 6,288
Commissions.................................................... 2,647 1,980 1,368
Other income
Income relating to securities and participations............. 132 109 106
Result from financial transactions........................... 1,230 977 37
Other revenue................................................ 456 433 368
------ ------ ------
Total other income........................................ 1,818 1,519 511
------ ------ ------
Total income............................................ 11,716 9,757 8,167
Staff costs.................................................... 4,319 3,516 2,736
Other administrative expenses.................................. 3,597 2,940 2,489
Depreciation................................................... 537 459 398
------ ------ ------
Operating expenditure.......................................... 8,453 6,915 5,623
------ ------ ------
Operating result before value adjustments to receivables....... 3,263 2,842 2,544
Value adjustments to receivables............................... 1,130 1,090 1,035
------ ------ ------
Result before taxation......................................... 2,133 1,752 1,509
Taxation....................................................... 590 556 476
Third party interests.......................................... 34 16 (6)
------ ------ ------
Net profit................................................ 1,509 1,180 1,039
====== ====== ======

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153

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Overview. The result before taxation from ING's banking operations
increased 21.7%, to NLG 2,133 million in 1996 from NLG 1,752 million in 1995.
The increase in the result before taxation resulted primarily from an NLG 993
million increase in the net interest result, an NLG 667 million increase in
commission income (particularly from the securities business and corporate
finance) and an NLG 253 million increase in the result from financial
transactions (particularly from securities trading).

Total income from banking operations grew by 20.1%, while operating
expenditure (total expenditure less value adjustments to receivables) increased
by 22.2%. Growth in both total income and operating expenditure was influenced
by the consolidation of Bank Slaski in Poland. Excluding the consolidation of
Bank Slaski, the increase in total income and operating expenditure was 18% and
20.9%, respectively. Operating expenditure in 1996 increased in part due to
additions to provisions of NLG 253 million for information technology,
preparation for the introduction of the euro, preparation to avoid the potential
adverse effects on computer systems of reaching the year 2000 and a
reorganization of ING's investment banking activities. Excluding such
provisions, operating expenditure increased by 17.3%, primarily due to the
expansion of the foreign branch network. Operating expenditure as a percentage
of total income, excluding the effect of the consolidation of Bank Slaski, would
have been 72.6% in 1996, compared to 70.9% in 1995. Without the NLG 253 million
additional provisions noted previously, the operating expenditure/total income
ratio would have been 70.4% in 1996.

Disregarding the effect of changes in the composition of the banking
operations discussed below and of exchange rate movements, total income
increased by 17% and result before taxation increased by 14.4% in 1996 over 1995
levels.

Net interest result was substantially higher, due to strong growth in
average interest-earning assets partly offset by a slight decrease in the
interest margin. The decrease in the interest margin resulted from a significant
narrowing of the interest margin in the international operations, partly offset
by an increase in the interest margin in the domestic operations. Both domestic
and international operations contributed to the volume growth in average
interest-earning assets. Average loans and advances recorded growth of 11.9%
rising to NLG 191.4 billion in 1996. See "SELECTED STATISTICAL INFORMATION ON
BANKING OPERATIONS OF ING -- Average Balances and Interest Rates". Of this
amount, NLG 149.9 billion related to lending in the Netherlands and NLG 41.5
billion to international lending. The consolidation of Bank Slaski contributed
NLG 0.7 billion to the growth of the average international lending portfolio.

Commissions increased by NLG 667 million, or 33.7%, NLG 39 million of which
reflected the consolidation of Bank Slaski. The growth in commission income was
mainly due to growth in the securities business and corporate finance and higher
fees for asset management.

Other income, which includes result from financial transactions, increased
by NLG 299 million to NLG 1,818 million in 1996 from NLG 1,519 million in 1995.
The result from financial transactions represented NLG 253 million of this
increase. Within the result from financial transactions, the result from the
securities trading portfolio showed a substantial improvement, due to continued
favorable market conditions. The result from the currency trading portfolio was
down primarily as a result of the relatively high results in 1995.

Value adjustments to receivables of the banking operations increased by NLG
40 million to NLG 1,130 million. This increase of 3.7% reflects the 11.9% growth
in average loans and advances. The growth in the value adjustments to
receivables of the banking operations continued to be well below the level of
growth in the loan portfolio, which management believes reflects improved debtor
quality.

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154

Effect of Acquisitions/Consolidations. Bank Slaski was consolidated as of
August 1996. The consolidation of Bank Slaski affected ING's 1996 total income,
total operating expenditure and result before taxation as follows.

YEAR ENDED
DECEMBER 31,
1996
--------------
(NLG MILLIONS)

Net interest result................................. 154
Commission.......................................... 39
Other income........................................ 8
---
Total income................................... 201
Staff costs......................................... 53
Other expenses...................................... 38
---
Operating expenditure.......................... 91
---
Result before taxation.............................. 110
===

Disregarding the effects of the Bank Slaski acquisition described above and
of exchange rate movements, which increased banking activities income by NLG 102
million and the result before taxation by NLG 19 million, total income increased
by 17% and result before taxation increased by 14.4% in 1996.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Overview. The result before taxation from ING's banking operations was
16.1% higher at NLG 1,752 million in 1995 compared to 1994. The increase in the
result before taxation resulted primarily from an NLG 940 million increase in
the result of financial transactions from NLG 37 million to NLG 977 million, as
well as an NLG 612 million increase in commissions.

Total income from the banking operations grew by 19.5%, while operating
expenditure increased by 23%. Growth in both total income and operating
expenditure was affected by the consolidation of Barings. Excluding Barings, the
increases in total income and operating expenditure were 9% and 7.9%,
respectively. The operating expenditure increase of 7.9% can be attributed
primarily to the expansion of the foreign branch network. Operating expenditure
as a percentage of total income including and excluding the effect of the
acquisition of the principal assets and liabilities of Barings was 70.9% and
68.1% in 1995, respectively, compared to 68.9% in 1994.

Net interest result was slightly lower, due to a narrowing of the interest
margin, substantially offset by considerable volume growth in average interest
earning assets. See "SELECTED STATISTICAL INFORMATION ON BANKING OPERATIONS OF
ING -- Average Balances and Interest Rates". The narrowing of the interest
margin occurred in both ING's international banking operations, as well as in
its domestic operations, with the domestic margin negatively impacted in part
due to losses in aircraft leasing and the funding costs related to the
acquisition of the principal assets and liabilities of Barings. Average loans
and advances grew 9.7%, rising to NLG 171 billion in 1995 from NLG 155.9 billion
in 1994. Of the 1995 amount, NLG 138.4 billion related to lending in the
Netherlands and NLG 32.6 billion to international lending. Average mortgage
lending, primarily for Dutch residential mortgages, grew 11.4%, from NLG 57.2
billion in 1994 to NLG 63.7 billion in 1995, reflecting a strong increase in
home sales in the Netherlands, primarily due to declining interest rates.
Increases in medium-term and long-term lending accounted for NLG 2.3 billion of
the increase.

Commissions increased by NLG 612 million from NLG 1,368 million in 1994 to
NLG 1,980 million in 1995, primarily reflecting the consolidation of Barings.

Other income, which includes result from financial transactions, increased
by NLG 1,008 million to NLG 1,519 million in 1995 from NLG 511 million in 1994.
The result from financial transactions represented NLG 940 million of such
increase, in part due to the consolidation of Barings. Within the

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155

result from financial transactions, the result from the securities trading
portfolio showed a substantial improvement, due to favorable market conditions.
The 1995 result from the currency trading portfolio was also higher, as ING was
able to respond effectively to exchange rate volatility during the year. The
result from asset trading (consisting of trading in emerging market loans)
improved sharply, compared to substantial losses experienced in 1994. This
improvement was due to favorable market trends in the last nine months of 1995,
which more than offset losses in the first quarter of 1995 as a result of the
Mexican peso crisis at the end of 1994.

Value adjustments to receivables of the banking operations increased in
1995 by NLG 55 million to NLG 1,090 million. This increase of 5.3% reflected the
9.7% growth in the average loans and advances. The growth in the value
adjustments to receivables of the banking operations was well below the level of
growth in the loan portfolio, which management believes reflects improved debtor
quality.

Effect of Acquisitions/Consolidations. The principal assets and
liabilities of Barings were acquired in March 1995 at a cost of L1 together with
a capital injection of NLG 1.7 billion. An amount of NLG 1.4 billion was charged
in full in 1995 as goodwill to the shareholders' equity of ING. To maintain
compliance with the Bank of England's solvency requirements, Barings' capital
was further increased by NLG 445 million in the course of 1995. The acquisition
of Barings contributed to ING's 1995 total income, operating expenditure and
result before taxation as follows.

YEAR ENDED
DECEMBER 31,
1995
--------------
(NLG MILLIONS)

Net interest result................................. 8
Commission.......................................... 635
Other income........................................ 209
---
Total income................................... 852
---
Staff costs......................................... 517
Other expenses...................................... 331
---
Operating expenditure.......................... 848
---
Result before taxation.............................. 4
===

Disregarding the effects of the Barings acquisition described above and of
exchange rate movements, which reduced ING's income by NLG 190 million and ING's
result before taxation by NLG 79 million, total income increased by 11.4% and
result before taxation increased by 21.1% in 1995.

Net Interest Result

The following table sets forth certain information concerning the total net
interest result of ING's banking operations. The interest income and net
interest result figures in the following table (other than other net interest
result and total net interest result) include interest on non-accruing loans and
do not reflect (i) interest income on amortized results investments; (ii)
lending commissions; (iii) interest income on off-balance sheet instruments;
(iv) other interest income not considered to be directly related to
interest-earning assets; (v) interest expense on off-balance sheet instruments;
or (vi) other interest expense not considered to be directly related to
interest-bearing liabilities, all of which are reflected in the other net
interest result and total net interest result below, which corresponds to the
net interest result line item in the Consolidated Financial Statements. A
reconciliation of the interest income, interest expense and net interest result
figures below to the corresponding line items in the Consolidated

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156

Financial Statements is contained in the table under "SELECTED STATISTICAL
INFORMATION ON BANKING OPERATIONS OF ING -- Average Balances and Interest
Rates".

YEAR ENDED DECEMBER 31,
-----------------------------------
1996 1995 1994
------- ------- -------
(NLG MILLIONS, EXCEPT PERCENTAGES)

TOTAL
Interest Income(1).............................. 18,949 17,529 16,936
======= ======= =======
Net interest result(1).......................... 6,838 6,100 6,249
Other net interest result(2).................... 413 158 39
------- ------- -------
Total net interest result..................... 7,251 6,258 6,288
======= ======= =======
Average interest-earning assets................. 277,567 239,434 217,431
Average interest-bearing liabilities............ 263,809 226,624 205,860
DOMESTIC
Interest Income(1).............................. 13,291 12,593 12,002
Net interest result(1).......................... 4,691 4,103 4,235
Average interest-earning assets................. 197,738 177,786 161,930
Average interest-bearing liabilities............ 203,456 182,407 165,943

FOREIGN
Interest Income(1).............................. 5,658 4,936 4,934
Net interest result(1).......................... 2,147 1,997 2,014
Average interest-earning assets................. 79,829 61,648 55,501
Average interest-bearing liabilities............ 60,353 44,217 39,917

GROSS YIELD(3)
Domestic...................................... 6.72% 7.08% 7.41%
Foreign....................................... 7.09% 8.01% 8.89%
------- ------- -------
Total......................................... 6.83% 7.32% 7.79%
======= ======= =======

INTEREST SPREAD(4)
Domestic...................................... 2.49% 2.43% 2.73%
Foreign....................................... 1.28% 1.36% 1.58%
------- ------- -------
Total......................................... 2.24% 2.28% 2.60%
======= ======= =======

INTEREST MARGIN(5)
Domestic...................................... 2.37% 2.31% 2.62%
Foreign....................................... 2.69% 3.24% 3.63%
Total......................................... 2.46% 2.55% 2.87%

- ---------------
(1) See "SELECTED STATISTICAL INFORMATION ON BANKING OPERATIONS OF
ING -- Average Balances and Interest Rates".

(2) Additional net interest result required to reconcile Total net interest
result to Consolidated Financial Statements. See "SELECTED STATISTICAL
INFORMATION ON BANKING OPERATIONS OF ING -- Average Balances and Interest
Rates".

(3) "Gross yield" is the average interest rate earned on "Average
interest-earning assets". See "SELECTED STATISTICAL INFORMATION ON BANKING
OPERATIONS OF ING -- Average Balances and Interest Rates".

(4) "Interest spread" is the difference between the average interest rate earned
on "Average interest-earning assets" and the average interest rate paid on
"Average interest-bearing liabilities". See "SELECTED STATISTICAL
INFORMATION ON BANKING OPERATIONS OF ING -- Average Balances and Interest
Rates".

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157

(5) "Interest margin" is "Net interest result" before reconciliation to
Consolidated Financial Statements as a percentage of "Average
interest-earning assets".

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Net interest result. Net interest result in 1996 increased by NLG 993
million, or 15.9%, over 1995 levels. This increase reflects a strong increase in
volume of average interest-earning assets of NLG 38.1 billion, or 15.9%, partly
offset by a decrease in the interest margin of nine basis points. Both domestic
and international operations recorded volume growth. The decrease in the
interest margin was attributable to a decline in interest margin of the
international operations offset in part by an increase in the domestic interest
margin.

The NLG 20 billion increase in volume of average interest-earning assets of
domestic operations was caused mainly by an increase of NLG 8.7 billion in
average mortgage loans, reflecting the strong increase in home sales in the
Netherlands, primarily due to the continuing decline in interest rates, and the
enlargement of the average securities portfolio by NLG 8.5 billion. The six
basis point increase in the domestic interest margin was mainly due to an
increase in the domestic interest spread as the average paid interest rate
(especially in savings deposits) decreased more than the average earned yield,
partly offset by the higher funding costs of the acquisitions of Barings and
Bank Slaski.

The increase in volume of the average interest-earning assets of
international operations of NLG 18.2 billion was caused mainly by an increase in
average loans and advances of NLG 8.9 billion and the enlargement of the average
securities portfolio by NLG 6.8 billion. The international interest margin
decreased by 55 basis points, due principally to growth in average
interest-bearing liabilities, which grew more than average interest-earning
assets (36.5% and 29.5%, respectively). The interest spread decreased by eight
basis points, reflecting the strong growth of the securities trading portfolio,
which generates less interest than other interest-earning assets.

The change in net interest result in 1996 can be allocated as follows by
average rate and volume effects.

(NLG MILLIONS)(1)
-----------------

Increase due to changes in average rates.................... 20
Increase due to changes in average balances................. 718
---
Increase due to changes in average rates and balances....... 738
Increase due to changes in other net interest (from
reconciliation)........................................... 255
---
Total change in net interest result......................... 993

- ---------------
(1) See "SELECTED STATISTICAL INFORMATION ON BANKING OPERATIONS OF
ING -- Analysis of Changes in Net Interest Income".

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net interest result. ING's net interest result in 1995 decreased by NLG 30
million from NLG 6,288 million in 1994 to NLG 6,258 million in 1995,
representing a 0.5% decrease compared to 1994. The lower interest result was
attributable primarily to a decrease in the interest margin of 32 basis points,
largely offset by increased volume in average interest-earning assets. The
impact on the interest margin was primarily caused by developments in the
international operations, where the interest margin decreased by 39 basis points
compared to 1994 levels, principally as a result of lower interest margins in
Brazil. In 1994, the net interest result in Brazil was especially high, as a
result of significant interest margins earned on interest-earning assets in the
local currency. Due to the introduction of the real, the new Brazilian currency,
on July 1, 1994, market conditions changed, since the new currency was linked to
the U.S. dollar and therefore the Brazilian currency was no longer a
hyperinflationary currency. In the first few months after the introduction of
the new currency, however, high interest rates on the real continued to

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158

exist as had been the case with respect to the cruzeiro, resulting in a
continued, though temporary, substantial increase in the net interest result in
Brazil.

In ING's domestic operations, the interest margin narrowed by 31 basis
points. This was partly due to a decline of NLG 65 million in the net interest
result at ING Lease, mainly caused by losses from aircraft leasing, which
decline had a negative effect on the interest margin in the domestic operations
of four basis points. The domestic interest margin was also negatively
influenced by the funding costs of the acquisition of Barings, which had a
negative effect on the interest margin in the domestic operations of six basis
points. The remaining 21 basis point decline in the domestic interest margin was
primarily due to the high interest margin in early 1994, which was mainly caused
by falling money market and capital market rates of interest in the Netherlands
at a time when ING's interest-bearing liabilities repriced faster than its
interest-earning assets in combination with the return to a normal yield curve
during 1993.

The change in net interest result in 1995 can be allocated as follows by
average rate and volume effects.

(NLG MILLIONS)(1)
-----------------

Decrease due to changes in average rates.................... (653)
Increase due to changes in average balances................. 504
----
Decrease due to changes in average rates and balances....... (149)
Increase due to changes in other net interest (from
reconciliation)........................................... 119
----
Total change in net interest result......................... (30)

- ---------------
(1) See "SELECTED STATISTICAL INFORMATION ON BANKING OPERATIONS OF
ING -- Analysis of Changes in Net Interest Income".

Commission

The following table sets forth the components of commissions for the years
indicated.

YEAR ENDED DECEMBER 31,
-------------------------
1996 1995 1994
----- ----- -----
(NLG MILLIONS)

Funds transfer..................................... 667 642 601
Securities business................................ 736 481 346
Insurance brokering................................ 105 93 86
Other.............................................. 1,139 764 335
----- ----- -----
Total.................................... 2,647 1,980 1,368
===== ===== =====

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

The effect on 1996 commission income from the consolidation of Bank Slaski
amounted to NLG 39 million (of which NLG 36 million related to other
commissions). Excluding the effect of Bank Slaski, the growth in commissions
from 1995 to 1996 consisted of the following:

Funds transfer. Commissions from funds transfer increased by NLG 23
million, from NLG 642 million in 1995 to NLG 665 million in 1996. Strong
competition in the domestic funds transfer market forced ING to lower its
prices, resulting in a decrease in commissions from domestic funds transfer of
NLG 8 million. This decrease was offset by an increase in commissions from the
international funds transfer market of NLG 8 million. Revenues from credit card
fees increased by NLG 23 million to NLG 109 million in 1996 from NLG 86 million
in 1995.

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159

Securities business. Commissions from ING's securities business increased
by NLG 254 million from NLG 481 million in 1995 to NLG 735 million in 1996,
reflecting favorable market conditions in both the domestic and international
markets.

Insurance brokering. The commission from insurance brokering increased by
NLG 12 million mainly due to increased sales of life insurance via ING Bank
branches in the Netherlands.

Other. Other commission income increased by NLG 339 million, from NLG 764
million in 1995 to NLG 1,103 million in 1996. This increase reflected an
increase of NLG 126 million in corporate finance fees (to NLG 259 million in
1996), of which NLG 92 million is attributable to ING Barings, and NLG 125
million in asset management fees (to NLG 470 million in 1996), of which NLG 81
million is attributable to Baring Asset Management.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

The effect on 1995 commission income from the consolidation of Barings
amounted to NLG 635 million (of which NLG 200 million related to securities
business and NLG 435 million related to other commissions, primarily management
fees and corporate finance commission income). Excluding the effect of Barings,
the growth in commissions from 1994 to 1995 consisted of the following:

Funds transfer. Despite strong competition in the funds transfer market,
ING Bank's commissions from domestic funds transfer increased by NLG 17 million,
from NLG 423 million in 1994 to NLG 440 million in 1995, and from international
funds transfer increased by NLG 8 million, from NLG 107 million in 1994 to NLG
115 million in 1995. Revenues from credit card fees increased by NLG 15 million
from NLG 71 million in 1994 to NLG 86 million in 1995.

Securities business. Commissions from ING's securities business decreased
by NLG 65 million from NLG 346 million in 1994 to NLG 281 million in 1995,
primarily as a result of unfavorable investment conditions in Italy and, to a
lesser extent, decreasing demand for own label investment funds.

Insurance brokering. The commission from insurance brokering increased by
NLG 7 million in 1995 mainly due to sales of life insurance via ING Bank
branches in the Netherlands.

Other. Other commission income decreased by NLG 6 million.

Other income

The following table sets forth the components of other income for the years
indicated.

YEAR ENDED DECEMBER 31,
------------------------
1996 1995 1994
----- ----- ----
(NLG MILLIONS)

Income relating to securities and participations.... 132 109 106
Result from financial transactions.................. 1,230 977 37
Other revenue....................................... 456 433 368
----- ----- ---
Total..................................... 1,818 1,519 511
===== ===== ===

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

The consolidation of Bank Slaski contributed NLG 8 million to other income
in 1996, primarily related to result from financial transactions. Including the
effect of Bank Slaski, other income increased by 19.7% from NLG 1,519 million in
1995 to NLG 1,818 million in 1996, mainly due to higher result from financial
transactions. The consolidation of Bank Slaski as of August 1996 reduced the
results from participating equity interests, as part of income relating to
securities and participations, by NLG 12 million.

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participating equity interests. The increase of NLG 35 million (excluding the
effect of the consolidation of Bank Slaski) was due to higher income from
participating equity interests in the Netherlands (NLG 17 million) as well as
higher results in the international branch network (NLG 20 million).

Result from financial transactions. The result from financial transactions
includes exchange rate differences and capital gains and losses on securities
held in the trading portfolio as well as valuation differences on equity
participations. Also included in this item are exchange rate differences in
connection with holding assets and liabilities in foreign currencies, the result
of the related forward contracts and the result from financial instruments other
than those serving to hedge interest rate risks. Asset trading results are also
included in this item.

The result from financial transactions can be analyzed as follows.

YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
------ ----
(NLG MILLIONS)

Result from securities trading portfolio............. 881 513
Result from currency trading portfolio............... 109 189
Other results........................................ 240 275
----- ---
Total...................................... 1,230 977
===== ===

Result from securities trading portfolios. The result from the securities
trading portfolio increased in 1996 by NLG 368 million, or 72%. This increase
was the result of favorable market conditions during 1996 and the negative
impact of the Mexican peso crisis on the results of the first quarter of 1995.
Domestically the favorable market conditions led to an NLG 105 million increase
in the securities trading result. The international business units' trading
portfolio results improved by NLG 263 million, of which NLG 136 million related
to LDC (Less Developed Countries) securities trading.

Result from currency trading portfolio. The result from the currency
trading portfolio decreased by NLG 80 million, reflecting particularly high
results in 1995 due to significant exchange rate volatility in that year.

Other results. The decrease of other results (which include asset trading,
equity participations, interest rate related derivatives and the effects of
revaluations in hyperinflation countries) in 1996 amounted to NLG 35 million.

The result from asset trading increased by NLG 35 million to NLG 175
million in 1996 due to favorable market trends starting after the aftermath of
the Mexican peso crisis, with the positive developments in prices during the
second quarter of 1995 continuing throughout the rest of the year and during
1996.

Income from equity participations decreased by NLG 21 million to NLG 5
million in 1996, reflecting a decrease in the domestic operations offset by an
increase in the international operations.

Result from the trading of interest related derivatives decreased by NLG 56
million to NLG 6 million. The interest received on interest related derivatives
which is reported under interest increased by NLG 82 million to NLG 86 million
in 1996.

The result from revaluation of investments in hyperinflationary countries
improved by NLG 39 million. NLG 13 million of the improvement results from
Poland no longer being considered a hyperinflationary country as of 1996, and
NLG 26 million arose from reduced inflation levels in Brazil and other emerging
markets.

Other revenue. Income from other revenue increased by NLG 23 million over
1995 levels. This increase was mainly due to higher rental income from ING Real
Estate and reductions in other revenue in 1995 from provisions for aircraft
leasing made in that year. Other revenue includes income which cannot be
allocated to net interest result, commissions, income relating to securities and
participations or result

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from financial transactions. The sources of other revenue include rent received
from real estate, results from the sale of real estate, other non-interest
income from leasing, releases of unclaimed savings and income from
non-banking-related activities.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Barings contributed NLG 209 million to other income (of which NLG 22
million related to securities and participations, NLG 143 million related to
financial transactions, mainly from the securities trading portfolio, and NLG 44
million related to other revenue). Excluding the effect of Barings, other income
increased by 156.4%.

Income relating to securities and participations. Excluding Barings, there
was a decrease in income relating to securities and participations of NLG 19
million, mainly caused by decreased income from sales at ING Real Estate of NLG
16 million as well as lower results of NLG 16 million in the foreign branches.

Result from financial transactions. The result from financial transactions
can be analyzed as follows.

YEAR ENDED DECEMBER 31,
-----------------------
1995 1994
---- ----
(NLG MILLIONS)

Result from securities trading portfolio.............. 513 131
Result from currency trading portfolio................ 189 51
Other results......................................... 275 (145)
--- ----
Total....................................... 977 37
=== ====

Result from securities trading portfolio. The result from the securities
trading portfolio increased in 1995 by NLG 382 million. This was partly caused
by the contribution from Barings of NLG 155 million. 1995 was generally a good
year for securities trading due to favorable market conditions in both domestic
and emerging markets. The strength of the domestic market led to an increase of
NLG 138 million in the securities trading result. Excluding Barings, the
international business units' securities trading portfolio result increased by
NLG 85 million, of which NLG 46 million related to LDC (Less Developed
Countries) securities trading.

Result from currency trading portfolio. The result from the currency
trading portfolio increased by NLG 138 million. This sharply higher result was
due to effective responses by ING to exchange rate movements during the year,
particularly between the U.S. dollar and the guilder.

Other results. The increase of other results (which include asset trading,
equity participations, interest derivatives and the effects of revaluations in
hyperinflationary countries) in 1995 amounted to NLG 420 million.

The result from asset trading improved sharply due to favorable market
trends in the last nine months of 1995, resulting in an increase of NLG 265
million over 1994 results. The increase should be considered in contrast to the
substantial negative results from asset trading in 1994 resulting from the
Mexican peso crisis which suddenly developed in the final months of 1994. The
Mexican peso crisis also had a negative impact on asset-trading results in the
first quarter of 1995. The positive developments in asset prices during the
second quarter of 1995 continued throughout the remainder of 1995.

Income from equity participations decreased from NLG 109 million in 1994 to
NLG 26 million in 1995, reflecting significant profits obtained upon the sale of
equity participations in 1994.

Result from the trading of interest related derivatives increased by NLG
149 million from a loss of NLG 87 million in 1994 to NLG 62 million in 1995.
This increase was due to favorable market conditions in 1995 and lower results
in 1994 which arose from sharp increases in interest rates, primarily in the
first quarter of the year.

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The result from revaluation of investments in hyperinflationary countries
improved by NLG 39 million. This is mainly due to the introduction of the real,
the new Brazilian currency, on July 1, 1994, which had a diminishing effect on
the Brazilian inflation level.

Other revenue. Income from other revenue increased by NLG 65 million, of
which Barings accounted for NLG 44 million. Excluding Barings, the increase of
NLG 21 million was mainly due to higher rental income from ING Real Estate,
partly offset by lower income from leasing due to additional provisions for
aircraft leasing in 1995.

Operating expenditure.

The following table sets forth the components of Operating expenditure.

YEAR ENDED DECEMBER 31,
-------------------------
1996 1995 1994
----- ----- -----
(NLG MILLIONS)

Staff costs........................................ 4,319 3,516 2,736
Other administrative expenses...................... 3,597 2,940 2,489
Depreciation....................................... 537 459 398
----- ----- -----
Operating expenditure............................ 8,453 6,915 5,623
===== ===== =====

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

Operating expenditure increased by 22.2% from NLG 6,915 million to NLG
8,453 million in 1996. Excluding Bank Slaski, operating expenditure increased by
20.9% from NLG 6,915 million to NLG 8,362 million. Operating expenditure related
to ING's domestic operations increased by 13.1%. Excluding provisions amounting
to NLG 253 million, operating expenditure related to domestic operations
increased by 7.8%, mainly due to the development and introduction of
stored-value cards and an increase in personnel in 1996 compared to a decrease
in 1995. Operating expenditure related to international operations increased by
38.7%, mainly reflecting costs associated with ING's expansion of its foreign
branch network and a significant increase in the number of employees.

Staff Costs. Staff costs increased by 22.8% to NLG 4,319 million in 1996.
Of this increase, NLG 53 million resulted from the consolidation of Bank Slaski
and NLG 13 million from additions to provisions for retirement. Excluding Bank
Slaski and this provision, staff costs increased by 21%, mainly due to the
increase in the average number of staff (full time equivalents) employed outside
the Netherlands, from 8,802 in 1995 to 9,695 in 1996. In the Netherlands the
average number of staff increased by 716 to 19,929. This increase was mainly due
to the new banking collective agreement, which reduced the working week to 36
hours as of April 1, 1996.

Other Administrative Expenses. Other administrative expenses rose in 1996
by NLG 657 million, or 22.3%, to NLG 3,597 million. Expenses in 1996 were
affected by the consolidation of Bank Slaski (with an effect of NLG 28 million)
and additions to provisions amounting to NLG 240 million for information
technology, preparation for the introduction of the euro and preparation to
avoid the potential adverse effects on computer systems of reaching the year
2000, and a reorganization of ING's investment banking activities. Excluding
these provisions and the effect of Bank Slaski, other administrative expenses
increased by NLG 389 million (13.2%).

Depreciation. Total depreciation rose by 17%, from NLG 459 million in 1995
to NLG 537 million in 1996, reflecting the consolidation of Bank Slaski (with an
effect of NLG 11 million) and the expansion of ING's international banking
operations.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Operating expenditure increased by 23%, from NLG 5,623 million in 1994 to
NLG 6,915 million in 1995. Excluding Barings, operating expenditure increased by
7.9% from NLG 5,623 million to NLG 6,067

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million. Operating expenditure related to ING's domestic operations increased by
3.5%, reflecting the emphasis on cost control. Operating expenditure related to
international operations increased by 27.9%, reflecting costs associated with
ING's expansion of its foreign branch network.

Staff Costs. Staff costs increased by 28.5%, to NLG 3,516 million in 1995.
Of this increase, NLG 517 million resulted from the acquisition of the principal
assets and liabilities of Barings. Excluding Barings, staff costs increased by
9.6%, mainly due to the increase in the average number of staff (full time
equivalents) employed outside the Netherlands, from 3,855 in 1994 to 4,769 in
1995. In the Netherlands the average number of staff decreased by 731 to 19,213.

Other Administrative Expenses. Other administrative expenses rose in 1995
by NLG 451 million (18.1%) to NLG 2,940 million, mainly due to costs associated
with the consolidation of Barings. Excluding Barings, administrative expenses
increased by 6.5%.

Depreciation. Total depreciation rose by 15.3%, from NLG 398 million in
1994 to NLG 459 million in 1995, reflecting the acquisition and consolidation of
Barings. Excluding Barings, the increase in depreciation was 4.5%.

Value Adjustments to Receivables

In 1996, value adjustments to receivables increased by NLG 40 million to
NLG 1,130 million. In 1995, value adjustments to receivables increased by NLG 55
million to NLG 1,090 million. Both the increase of 3.7% in 1996 and the increase
of 5.3% in 1995 mainly reflected the growth in average loans and advances in
those years although such increases were lower than the overall growth in the
loan portfolio during these years, which management believes is due to
improvements in loan portfolio quality and strict monitoring of problem loans.

Taxation

The overall effective taxation rate for the banking operations was 27.7%
(NLG 590 million), 31.7% (NLG 556 million) and 31.5% (NLG 476 million) in 1996,
1995 and 1994, respectively, compared to a statutory rate of 35% in each year in
the Netherlands. The difference between the effective and statutory rates
reflected the effect of tax exemption relating to dividends from Dutch companies
in which ING held more than 5% of the outstanding shares, foreign tax rates and
other items.

Net Profit from Banking Operations

Net profit in 1996 increased by NLG 329 million (27.9%), compared with
1995, to NLG 1,509 million. Disregarding the effect of the consolidation of Bank
Slaski, which increased 1996 net profit by NLG 24 million, and of exchange rate
movements, which increased 1996 net profit by NLG 14 million, net profit
increased by 24.7%. The effect of exchange rate movements has been calculated
assuming a tax burden equal to ING's overall effective rate of 27.7%.

Net profit in 1995 increased by NLG 141 million (13.6%), compared with
1994, to NLG 1,180 million. Disregarding the effect of the Barings acquisition,
which increased 1995 net profit by NLG
3 million, and of exchange rate movements, which reduced 1995 net profit by NLG
54 million, net profit increased by 18.5%. Both the effect of the Barings
acquisition and the effect of exchange rate movements have been calculated
assuming a tax burden equal to ING's overall effective rate of 31.7%.

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Geographic Distribution of Total Income and Result of Banking Operations
Before Value Adjustments to Receivables

OPERATING RESULT BEFORE
VALUE ADJUSTMENTS
TO RECEIVABLES
-------------------------
TOTAL INCOME
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------- -------------------------
1996 1995 1994 1996 1995 1994
------ ----- ----- ----- ----- -----
(NLG MILLIONS)

The Netherlands................... 7,759 6,876 6,431 2,334 2,083 1,829
Rest of Europe.................... 2,350 1,667 540 309 256 49
North America..................... 705 539 335 162 170 94
South America..................... 519 342 647 286 156 485
Asia.............................. 355 310 212 173 165 86
Australia......................... 27 23 2 5 12 1
Other............................. 1 -- -- (6) -- --
------ ----- ----- ----- ----- -----
Total................... 11,716 9,757 8,167 3,263 2,842 2,544
====== ===== ===== ===== ===== =====

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

The Netherlands. Within the Netherlands, total income rose by 12.8% and
the operating result before value adjustments to receivables increased by 12%.
The net interest result improved by 16.6%, due to a considerable growth in the
volume of average interest-earning assets, particularly in the residential
mortgage portfolio, and an increase in the amortization of realized capital
gains on the investment portfolio. Commissions increased substantially, mainly
due to higher commissions relating to securities business and insurance
brokering. These improvements were partly offset by a decrease in other income
as a result of lower results from equity participations and from the sale of
real estate. The operating result before value adjustments to receivables of ING
Lease, which suffered a loss in 1995, improved sharply.

Rest of Europe. Total income in the Rest of Europe increased by 41%.
Excluding the effect of the consolidation of Bank Slaski, total income increased
by 28.9%. This increase reflects higher commission income from securities
business, corporate finance and management fees, as well as an increase in
results from financial transactions at ING Barings and Baring Asset Management,
also reflecting the fact that those business units were included for only ten
months in 1995. The operating result before value adjustments to receivables
increased by 20.7%. Excluding the effect of the consolidation of Bank Slaski,
the result before value adjustments to receivables decreased by NLG 57 million
or 22.3%. This decrease is partly due to higher interest expenses related to the
acquisition of Barings (NLG 51 million) and to incidental costs for the
integration of ING's London-based banking activities. In Italy, the operating
result before value adjustments to receivables increased sharply due to higher
commissions.

North America. Total income increased by 30.8%, mainly due to an increase
in the results from the securities trading portfolio, reflecting favorable
market conditions during 1996 and the negative impact of the Mexican peso crisis
on the results of the first quarter of 1995. The operating result before value
adjustments to receivables decreased by 4.7%, as expenditures rose by 47.2%
(exceeding the increase in total income), mainly due to higher bonus levels (in
line with income growth) and the establishment of banking operations in Canada.

South America. Total income increased by 51.8% and the operating result
before value adjustments to receivables rose by 83.3% mainly due to the result
from the securities trading portfolio. This increase, as in North America, was
the result of favorable market conditions during 1996 and the negative impact of
the Mexican peso crisis on the results of the first quarter 1995.

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Asia. The increase in total income and operating result before value
adjustments to receivables was mainly due to the higher interest result, partly
offset by a decrease in the results from the currency trading portfolio.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

The Netherlands. Within the Netherlands total income rose by 6.9% and the
operating result before value adjustments to receivables increased by 13.9%. The
net interest result improved 5.9% due to considerable growth in the volume of
average interest-earning assets, particularly in the residential mortgage
portfolio, as well as an increase in amortization of realized capital gains on
the investment portfolio. These improvements were offset in part by the decrease
in the interest margin noted above. Other income increased substantially as a
result of higher results from the securities and currency trading portfolio.
Commissions were slightly higher. ING Lease suffered a loss in 1995, compared to
positive results in 1994, as 1995 results were adversely affected by provisions
in connection with the financing and leasing of aircraft.

Rest of Europe. Mainly due to the consolidation of Barings, total income
increased by 208.7%. Excluding the effect of Barings, total income would have
increased by 50.9% as result from asset trading and LDC securities trading
improved sharply due to favorable market conditions in 1995 compared with 1994,
which was adversely impacted by the Mexican peso crisis. The operating result
before value adjustments to receivables increased by 422.4%. This increase
principally reflects higher results in Eastern Europe (mainly due to expansion),
Ireland and Great Britain (excluding Barings). The acquisition of Barings had a
minor effect on the operating result before value adjustments to receivables. In
Italy, operating result before value adjustments to receivables decreased due to
reduced commissions at ING Sviluppo Finanziaria S.p.A.

North America. Total income increased by 60.9% and the operating result
before value adjustments to receivables rose by 80.9% mainly due to a
substantial increase in revenue and result from the securities trading portfolio
compared to 1994 levels. 1994 trading results were adversely affected by
unfavorable market conditions, which improved in 1995. Increased commissions
also had a positive impact on 1995 results.

South America. Total income and operating result before value adjustments
to receivables decreased by 47.1% and 67.8%, respectively. These decreases were
mainly due to lower net interest results in Brazil, resulting from a sharp fall
in interest margins a few months after the introduction of the real, Brazil's
new currency. This decrease was partly compensated by a strong recovery in the
results from financial transactions, reflecting improved market conditions
following the 1994 Mexican peso crisis.

Asia. The increase in income and operating result before value adjustments
to receivables was mainly due to higher results from the securities and currency
trading portfolio. The interest result also increased substantially.

LIQUIDITY AND CAPITAL RESOURCES

ING Groep N.V. is a holding company whose principal assets are its
investments in the capital stock of its primary insurance and banking
subsidiaries. The liquidity and capital resource considerations for ING Groep
N.V., ING Insurance and ING Bank vary in light of the business conducted by
each, as well as the insurance and bank regulatory requirements applicable to
ING in the Netherlands and the other countries in which it does business. ING
Groep N.V. has no employees and substantially all of ING Groep N.V.'s operating
expenses are allocated to and paid by its operating companies.

ING GROEP N.V.

As a holding company, ING Groep N.V.'s principal sources of funds are funds
that may be raised from time to time from the issuance of debt or equity
securities and bank or other borrowings, as well as cash dividends received from
its subsidiaries. ING Groep N.V.'s total debt outstanding to third parties at

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each of December 31, 1996, 1995 and 1994 was NLG 2,068 million. The NLG 2,068
million of debt outstanding at December 31, 1996 consisted of NLG 1,068 million
principal amount of 10% subordinated debentures due March 15, 2001 and NLG 1,000
million principal amount of 7.125% debentures due June 28, 2004. At December 31,
1996, 1995 and 1994, ING Groep N.V. also owed NLG 2,844 million, NLG 2,623
million and NLG 492 million, respectively, to ING companies pursuant to
intercompany lending arrangements. Of the NLG 2,844 million owed by ING Groep
N.V. to ING companies at December 31, 1996 pursuant to such arrangements,
approximately NLG 22 million was owed to ING Insurance companies and NLG 2,822
million was owed to ING Bank companies. Of the NLG 2,844 million borrowed from
ING companies in 1996, approximately NLG 2,270 million was used by ING Groep
N.V. in connection with the acquisition of the principal assets and liabilities
of Barings and its 54% interest in Bank Slaski.

At December 31, 1996, 1995 and 1994, ING Groep N.V. had NLG 0 million, NLG
163 million and NLG 0 million, respectively, of available cash. Dividends paid
to ING by its subsidiaries amounted to NLG 101 million, NLG 46 million, NLG 209
million in 1996, 1995 and 1994, respectively, in each case representing
dividends declared and paid with respect to the prior calendar year. Of such
amounts, NLG 17 million, NLG 16 million and NLG 193 million were received from
ING Insurance, and NLG 84 million, NLG 30 million and NLG 16 million were
received from ING Bank, respectively. ING and its Dutch subsidiaries are subject
to legal restrictions on the amount of dividends they can pay to their
shareholders. The Dutch Civil Code provides that dividends can only be paid by
Dutch companies up to an amount equal to the excess of a company's shareholders'
equity over the sum of (i) paid-up capital, and (ii) shareholders' reserves
required by law. Further, certain ING companies are subject to restrictions on
the amount of funds they may transfer in the form of cash dividends or otherwise
to ING Groep N.V.

In addition to the restrictions in respect of minimum capital and solvency
requirements that are imposed by insurance, banking and other regulators in the
countries in which ING's subsidiaries operate, other limitations exist in
certain countries. For example, the operations of ING's insurance company
subsidiaries located in the United States are subject to limitations on the
payment of dividends to their parent company under applicable state insurance
laws. Dividends paid in excess of these limitations generally require prior
approval of the Insurance Commissioner of the state of domicile.

ING Groep N.V. made dividend payments of NLG 46 million, NLG 46 million and
NLG 28 million on its Preference Shares, and declared dividends of NLG 1,561
million, NLG 1,203 million and NLG 1,036 million on its Ordinary Shares, in
1996, 1995 and 1994, respectively. Of the amounts paid as dividends on ING Groep
N.V.'s Ordinary Shares in 1996, 1995 and 1994, NLG 455 million, NLG 126 million
and NLG 124 million, respectively, were paid in the form of cash dividends and
the remainder was paid in the form of stock dividends. The amount needed by ING
Groep N.V. to pay such cash dividends was raised by ING issuing approximately
NLG 480 million, NLG 141 million and NLG 128 million of Bearer Receipts on the
open market in 1996, 1995 and 1994, respectively. See "DIVIDENDS".

ING

Consolidated Cash Flows

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

ING's total cash flows are comprised of the net cash flow from operating
activities, the net cash flow from investment activities and the net cash flow
from financing activities.

The principal sources of funds for ING's operating activities are insurance
premium income, income from investments of the insurance operations and interest
income and other income received from the banking operations. ING's major uses
of funds are the payments in connection with life policy benefits, payments of
non-life claims, interest expenses, personnel expenses and other expenses,
including acquisitions and the establishment or expansion of greenfield
operations, as well as investments in information technology.

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The net cash flow of ING's operating activities also includes the sales and
purchases of its trading portfolio, the net balance of loan advances and
repayments and the change in the funds entrusted to and debt securities of the
banking operations. Net cash provided by operating activities was NLG 19,628
million for the year ended December 31, 1996 compared to NLG 10,828 million for
the year ended December 31, 1995. The increase in the cash flow generated
through the funds entrusted to, and debt securities of, the banking operations
from NLG 16,306 million in 1995 to NLG 28,030 million was used mainly to finance
the growth in the lending portfolio, which increased to NLG 201.8 billion in
1996 from NLG 166.5 billion in 1995. The cash flow employed in lending grew from
NLG 17,552 million in 1995 to NLG 36,607 million in 1996.

Net cash used in investment activities in 1996 was NLG 24,093 million
compared to NLG 16,604 million in 1995, an increase of NLG 7,489 million, or
approximately 45%. This increase primarily reflects the uses of funds coming
from the increase in net cash flows of ING's operating activities as mentioned
above.

Net cash flow from financing activities amounted to NLG 5,143 million in
1996 compared to NLG 2,155 million in 1995. The NLG 2,988 million, or 139%,
increase in net cash flow from financing activities reflects an NLG 617 million
increase in bonds issued, loans taken up and deposits by reinsurers, and an NLG
1,606 million increase in subordinated loans of group companies.

The operating, investment and financing activities described above resulted
in net cash and cash equivalents at year-end 1996 of NLG 4,356 million, compared
to NLG 3,851 million at year-end 1995, an increase of NLG 505 million from 1995
levels.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Net cash provided by operating activities was NLG 10,828 million for the
year ended December 31, 1995, compared to NLG 10,887 million for the year ended
December 31, 1994. The increase in cash flow generated through the funds
entrusted to, and debt securities of, the banking operations from NLG 7,098
million in 1994 to NLG 16,308 million was used mainly to finance the growth in
the lending portfolio, which increased to NLG 166.5 billion in 1995 from NLG
150.1 billion in 1994. The cash flow employed in lending grew from NLG 7,456
million in 1994 to NLG 17,552 million in 1995.

Net cash used in investment activities in 1995 was NLG 16,604 million
compared to NLG 13,860 million in 1994, an increase of NLG 2,744 million, or
approximately 20%. The increase in cash used in investment activities stems
primarily from higher investments in fixed-interest securities, participating
interests and other investments in 1995, due to growth in premium income of the
insurance operations.

Net cash flow from financing activities amounted to NLG 2,155 million in
1995 compared to NLG 940 million in 1994. The NLG 1,215 million, or 129%,
increase in net cash flow from financing activities reflects an NLG 818 million
increase in bonds issued, loans taken up and deposits by reinsurers, and an NLG
396 million increase in subordinated loans of group companies.

The operating, investing and financing activities described above resulted
in net cash and cash equivalents at year-end 1995 of NLG 3,851 million, compared
to NLG 7,029 million at year-end 1994, a decrease of NLG 3,178 million from 1994
levels.

ING Insurance Cash Flows

The principal sources of funds for ING Insurance are premiums, net
investment income and proceeds from sales or maturity of investments, while the
major uses of these funds are to provide life policy benefits, pay SURRENDERS
and profit sharing for life policyholders, pay non-life claims and related
claims expenses, and pay other operating costs. ING Insurance generates a
substantial cash flow from operations as a result of most premiums being
received in advance of the time when claim payments or policy benefits are
required. These positive operating cash flows, along with that portion of the

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investment portfolio that is held in cash and highly liquid securities, have
historically met the liquidity requirements of ING Insurance's operations, as
evidenced by the growth in investments.

In the insurance industry, liquidity generally refers to the ability of an
enterprise to generate adequate amounts of cash from its normal operations,
including its investment portfolio, in order to meet its financial commitments,
which are principally obligations under its insurance or reinsurance contracts.
The liquidity needs of the life operations of ING Insurance are generally
affected by trends in actual mortality experience relative to the assumptions
with respect thereto included in the pricing of its life insurance policies, by
the extent to which minimum returns or crediting rates are provided in
connection with its life insurance products, as well as by the level of
surrenders and WITHDRAWALS. The liquidity of ING Insurance's non-life operations
is affected by the frequency and severity of losses under its policies, as well
as by the persistency of its products. Future catastrophic events, the timing
and effect of which are inherently unpredictable, may also create increased
liquidity requirements for the non-life operations of ING Insurance.

Premium income, income from investments and net interest result (which
principally includes certain banking operations in the Netherlands) of ING
Insurance totaled NLG 24,322 million, NLG 11,121 million and NLG 273 million in
1996, NLG 21,511 million, NLG 9,638 million and NLG 313 million in 1995, and NLG
20,377 million, NLG 8,205 million and NLG 274 million in 1994, respectively.
Uses of funds by ING Insurance, in addition to shareholder dividends (which
amounted to NLG 42 million in 1996), include underwriting expenditures
(reinsurance premiums, benefits, surrenders, claims (including claims handling
expenses) and profit sharing by life policyholders) and employee and other
operating expenses, as well as interest expense on outstanding borrowings.
Underwriting expenditures, employee and other operating expenses and interest
expense for ING Insurance totaled NLG 26,890 million, NLG 6,587 million and NLG
902 million in 1996, NLG 23,394 million, NLG 6,122 million and NLG 991 million
in 1995 and NLG 21,454 million, NLG 5,774 million and NLG 944 million in 1994,
respectively.

ING Insurance's liquidity requirements are met on both a short- and
long-term basis by funds provided by insurance premiums collected, investment
income and collected reinsurance receivables, and from the sale and maturity of
investments. ING Insurance also has access to the commercial paper, medium-term
note and other credit facilities described below as additional sources of
liquidity. ING Insurance's balance of cash and cash equivalents was NLG 1,502
million at December 31, 1996, compared with NLG 1,220 million and NLG 1,196
million at December 31, 1995 and 1994, respectively.

Net cash provided by operating activities was NLG 11,533 million, NLG
11,043 million and NLG 9,977 million in 1996, 1995 and 1994, respectively. The
increase in operating cash flow in 1996 over 1995 was mainly attributable to
higher investment income; though the balance of cash flow of premium income and
benefits and claims and expenses was positive, growth in claims and benefits
paid and expenses exceeded growth in premium income.

The increase in operating cash flow between 1995 and 1994 was attributable
to growth of premiums which exceeded growth in claims and benefits paid and
expenses, and to substantial growth in investment income. Cash flows from
operating activities in 1995 were adversely affected by NLG 71 million net
catastrophe losses related to Hurricane Luis in the Caribbean. Total gross
claims from Hurricane Luis amounted to NLG 142 million, of which NLG 71 million
was ceded to third party reinsurers and NLG 11 million was released from ING's
catastrophe reserve.

Net cash used by ING Insurance in investment activities was NLG 12,862
million, NLG 12,718 million and NLG 9,380 million in 1996, 1995 and 1994,
respectively.

Cash provided by ING Insurance's financing activities amounted to NLG 1,769
million, NLG 1,584 million and NLG (428) million in 1996, 1995 and 1994,
respectively.

At December 31, 1996 ING Insurance had approximately NLG 174 million
available in unused credit lines related to its commercial paper program. These
credit lines are provided by banks at a commitment fee not higher than 0.1% and
a drawing cost not higher than 0.25% over LIBOR, subject to certain limited
exceptions.

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Solvency Margins and Capital Requirements. The insurance operations of the
insurance subsidiaries of ING Insurance are subject to detailed, comprehensive
regulation in all the jurisdictions in which ING Insurance does business. In
addition, EC directives have had, and will have, a significant impact on the
regulation of the insurance industry in the EU as such directives are
implemented through legislation adopted within each member state, including the
Netherlands.

Insurance companies in the Netherlands are supervised by the Dutch
Insurance Supervisory Board. The Netherlands has adopted the EC Directives of
1973 and 1979 setting forth certain solvency requirements for non-life and life
insurance companies, respectively. Such solvency requirements apply to all of
ING's insurance subsidiaries in the EU. As a group of companies in the
Netherlands may be engaged in both insurance and banking, the Dutch Central Bank
and the Insurance Supervisory Board, in consultation with the Ministry of
Finance, have entered into a protocol for the purpose of jointly regulating
groups with interests in both banks and insurance companies. See "REGULATION AND
SUPERVISION OF ING BUSINESSES". Each of ING's Dutch and other European insurance
subsidiaries is in compliance with the applicable solvency requirements. At
December 31, 1996, the aggregate solvency margin of ING's insurance subsidiaries
was NLG 25.4 billion, NLG 19.4 billion above the aggregate legal minimum of NLG
6.0 billion.

In the United States, since 1993, insurers, including the companies
comprising ING Insurance's U.S. operations, have been subject to risk based
capital ("RBC") guidelines. See "REGULATION AND SUPERVISION OF ING
BUSINESSES -- Insurance -- United States".

ING Bank Cash Flows

The principal sources of funds for ING Bank's operations are growth of the
deposit base, private loans, repayments of loans, disposals and redemptions of
investments, sales of trading portfolio securities, interest income and
commission income. The major uses of funds are advances of loans and other
credits, investments, purchases of trading portfolio securities, interest
expense and administrative expenses. At December 31, 1996, 1995 and 1994, ING
Bank had NLG 5,282 million, NLG 2,602 million and NLG 5,808 million,
respectively, of cash and cash equivalents.

Net cash provided by ING Bank's operating activities was NLG 12,433 million
for the year ended December 31, 1996, and net cash used was NLG 2,651 million
for the year ended December 31, 1995 compared to net cash provided of NLG 1,453
million for the year ended December 31, 1994. The NLG 15,084 million increase in
cash provided by operations from 1996 to 1995 was mainly due to an NLG 37,623
million increase in funds entrusted (for banks, funds entrusted not available on
demand) and proceeds from issuance of debt securities, other liabilities,
accruals and deferred income and partly offset by an NLG 17,225 increase in
advances/repayments lending, consisting of loans generated by ING Bank, net of
loans repaid and charge-offs. The NLG 4,104 million decrease in cash provided by
operations from 1994 to 1995 was largely attributable to an NLG 11,401 million
increase in advances/repayments lending offset in part by an aggregate increase
of NLG 9,745 million in funds entrusted and proceeds from the issuance of debt
securities.

Net cash used in investment activities was NLG 12,470 million, NLG 2,521
million and NLG 4,764 million in 1996, 1995 and 1994, respectively, mainly
reflecting investment in interest-earning securities exceeding the disposals and
redemptions of interest-earning securities in the same year. Investment in
interest-earning securities was NLG 80,602 million, NLG 35,225 million and NLG
39,604 million in 1996, 1995 and 1994, respectively. Disposals and redemptions
of interest-earning securities was NLG 69,212 million, NLG 33,714 million and
NLG 36,190 million in 1996, 1995 and 1994, respectively. The strong increase in
investment in interest-earning securities and disposals and redemptions of
interest-earning securities in 1996 compared to 1995 reflects the increase in
investment activities.

Net cash flow from financing activities amounted to NLG 2,717 million, NLG
1,966 million and NLG 809 million in 1996, 1995 and 1994, respectively.

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170

The operating, investment and financing activities described above resulted
in a positive net cash flow of NLG 2,680 million in 1996 and a negative net cash
flow of NLG 3,206 and 2,502 million in 1995 and 1994, respectively.

Capital Adequacy. Capital adequacy and the use of capital are monitored by
ING Bank and its subsidiaries, employing techniques based on the guidelines
developed by the Basle Committee on Banking Regulations and Supervisory
Practices (the "Basle Committee") and implemented by the EU and the Dutch
Central Bank for supervisory purposes.

The Dutch Central Bank, in common with other bank supervisors, regards the
risk asset ratio developed by the Basle Committee as a key supervisory tool and
sets individual ratio requirements for banks in the Netherlands. This ratio was
designed to meet the dual objectives of strengthening the soundness and
stability of the international banking system and of creating a fair and
consistent supervisory framework for international banks by means of an
international convergence of capital measurement and capital standards. The
technique involves the application of risk weightings to assets (which for this
purpose includes both balance sheet assets and off-balance sheet items) to
reflect the credit and other risks associated with broad categories of
transactions and counterparties.

The Basle Committee guidelines set a minimum total risk asset ratio for all
international banks of 8%. Bank capital adequacy requirements have also been
established pursuant to EU directives. These directives, as implemented in the
Netherlands, set forth capital standards similar to those of the Basle Committee
guidelines.

In addition, the EC Capital Adequacy Directive (the "CAD") became effective
January 1, 1996. This directive establishes minimum capital requirements for
banks and investment firms for market risks. The CAD is based on a proposal by
the Basle Committee. The significant new aspects of the CAD relate to:

(1) permitting shorter-term subordinated debt to qualify as capital
(so-called Tier 3 capital).

(2) capital requirements with respect to the following risks:

(a) the market risk of underwriting and trading-book positions in
financial instruments and the foreign exchange risk of all
business activities;
(b) the delivery risk for all securities transactions on the
trading book and the non-trading book;
(c) the concentration risk of trading-book positions that exceed
the large-exposure limit; and
(d) the counterparty risk of securities lending and repurchase and
reverse repurchase transactions on the trading book and the
non-trading book.

The risk asset approach to capital adequacy emphasizes the importance of
"Tier 1" (core) capital, comprising primarily Group equity. In determining a
bank's risk asset ratio, the rules limit qualifying "Tier 2" supplementary
capital to an amount equal to Tier 1 capital. Tier 2 capital includes
subordinated debt, provision for general banking risks (until December 31, 1996)
and fixed asset revaluation reserves.

The concept of risk weighting assumes that banking activities generally
involve some risk of loss. For risk weighting purposes, commercial lendings are
taken as a bench-mark to which a risk weighting of 100% is ascribed. Other
transactions, which are considered to present lower levels of risk than
commercial lending, may qualify for reduced weightings. Off-balance sheet items
are generally converted to credit risk equivalents by applying credit conversion
factors laid down by the Basle Committee. The resultant amounts are then
risk-weighted according to the nature of the counterparty. As a result, credit
substitutes, such as standby letters of credit and acceptances, are allocated
the same risk weightings as similar on-balance sheet lending, while
transaction-related off-balance sheet items, such as performance bonds, are
allocated a lower weighting in recognition of the smaller likelihood of loss
from these instruments.

In the case of interest and exchange rate related contracts, the risks
involved relate to the potential loss of cash flows rather than notional
principal amounts. These risks are represented by the replacement

156
171

cost (as defined by the Dutch Central Bank) of the contracts plus an add-on to
reflect potential future volatility in replacement cost arising from movements
in market rates.

The following table sets forth the risk-weighted capital ratios of ING's
banking operations as of December 31, 1994, 1995 and 1996, in each case
calculated under the Netherlands' implementation of the relevant EC directives.

DECEMBER 31,
-----------------------------------
1996 1995 1994
------- ------- -------
(NLG MILLIONS, OTHER THAN
PERCENTAGES)

Risk-Weighted Assets.................................... 215,539 166,575 143,954
Consolidated group equity:
Tier 1 Capital........................................ 13,777 11,210 9,422
Tier 2 Capital........................................ 9,434 7,564 6,807
Tier 3 Capital........................................ 435 -- --
Supervisory Deductions................................ (303) (438) (315)
------- ------- -------
Total qualifying capital...................... 23,343 18,336 15,914
Tier 1 Capital Ratio.................................... 6.39% 6.73% 6.55%
Total Capital Ratio (Tier 1, 2 and 3)................... 10.83% 11.01% 11.05%

Risk-adjusted assets, including those required under the CAD, increased by
NLG 48.9 billion, or 29.4%, in 1996 to NLG 215.5 billion from NLG 166.6 billion
in 1995. Excluding the CAD requirements, risk-adjusted assets increased 27.1%
over 1995 levels.

Pursuant to Dutch GAAP, prior to January 1, 1997 ING maintained a provision
for general banking risks, the amount of which amounted to NLG 2,550 million, or
1.18% of risk-adjusted assets, at December 31, 1996. Prior to January 1, 1997,
the amount of such provision, which was netted against Lending, qualified as
Tier 2 capital, and the amount added to such provision each year was included in
Value adjustments to receivables on ING's profit and loss account. As of January
1, 1997, ING transferred NLG 1,300 million of such provision to a new "Fund for
general banking risks", and added the remaining NLG 1,250 million to
shareholders' equity. Both the new Fund for general banking risks and group
equity qualify as Tier 1 capital. After giving effect to the reclassification of
the provision for general banking risks, the Tier 1 Capital and Tier 1 Capital
Ratio are NLG 16,327 million and 7.57%, respectively. See Note 7.1 of Notes to
Consolidated Financial Statements for a discussion of this provision and the
effect of the foregoing changes on ING's U.S. GAAP financial data.

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172

SELECTED STATISTICAL INFORMATION ON BANKING OPERATIONS OF ING

The tables below set forth selected statistical information regarding ING's
banking operations. Unless otherwise indicated, average balances, when used, are
calculated from monthly data and the distinction between domestic and foreign is
based on the location of the office where the assets and liabilities are booked,
as opposed to the domicile of the customer. However, ING believes that the
presentation of these amounts based upon the domicile of the customer would not
result in material differences in the amounts presented below.

AVERAGE BALANCES AND INTEREST RATES

The following tables show ING's average interest-earning assets and average
interest-bearing liabilities, together with average rates, for the periods
indicated. The interest income, interest expense and average yield figures
include interest on non-accruing loans and do not reflect (i) income on
amortized results investments; (ii) lending commissions; (iii) interest income
on off-balance sheet instruments; (iv) other income not considered to be
directly related to interest-earning assets; (v) interest expense on off-balance
sheet instruments; or (vi) other expenses not considered to be directly related
to interest-bearing liabilities, all of which are reflected in the corresponding
interest income, interest expense and net interest result figures in the
Consolidated Financial Statements. A reconciliation of the interest income,
interest expense and net interest result figures below to the corresponding line
items in the Consolidated Financial Statements is provided below.

ASSETS

INTEREST-EARNING ASSETS
------------------------------------------------------------------------------------------
1996 1995 1994
---------------------------- ---------------------------- ----------------------------
AVERAGE INTEREST AVERAGE AVERAGE INTEREST AVERAGE AVERAGE INTEREST AVERAGE
BALANCE INCOME YIELD BALANCE INCOME YIELD BALANCE INCOME YIELD
------- -------- ------- ------- -------- ------- ------- -------- -------
(NLG MILLIONS) % (NLG MILLIONS) % (NLG MILLIONS) %

Time deposits with banks
domestic....................... 14,507 637 4.39 13,345 657 4.92 11,762 618 5.25
foreign........................ 13,799 657 4.76 12,443 906 7.28 10,500 889 8.47
Loans and advances
domestic....................... 149,882 10,998 7.34 138,353 10,577 7.64 124,569 9,892 7.94
foreign........................ 41,470 3,432 8.28 32,599 2,920 8.96 31,332 2,622 8.37
Interest-earning securities(1)
domestic....................... 29,978 1,535 5.12 21,515 1,215 5.65 19,763 1,216 6.16
foreign........................ 20,354 1,126 5.53 13,545 853 6.30 11,342 777 6.85
Other interest-earning assets
domestic....................... 3,371 121 3.59 4,572 143 3.13 5,836 276 4.73
foreign(2)..................... 4,207 443 10.53 3,062 258 8.43 2,327 646 27.76
------- ------ ----- ------- ------ ----- ------- ------ -----
Total............................ 277,568 18,949 6.83 239,434 17,529 7.32 217,431 16,936 7.79
Non-interest earning assets...... 19,071 13,875 11,105
------- ------- -------
Total Assets(1)......... 296,639 253,309 228,536
======= ======= =======
Percentage of assets applicable
to foreign operations.......... 31.4% 27.0% 26.0%
Other interest income
(reconciliation to Consolidated
Financial Statements):
-- amortized results
investments(3).............. 570 388 292
-- lending commission(4)....... 250 256 207
-- adjustment for interest on
non-performing loans(5)..... (135) (166) (153)
-- interest on off-balance
instruments(6).............. 462 293 357
-- other....................... 159 71 149
------ ------ ------
Total interest income.......... 20,255 18,371 17,788
====== ====== ======

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173

LIABILITIES

INTEREST-BEARING LIABILITIES
------------------------------------------------------------------------------------------
1996 1995 1994
---------------------------- ---------------------------- ----------------------------
AVERAGE INTEREST AVERAGE AVERAGE INTEREST AVERAGE AVERAGE INTEREST AVERAGE
BALANCE EXPENSE YIELD BALANCE EXPENSE YIELD BALANCE EXPENSE YIELD
------- -------- ------- ------- -------- ------- ------- -------- -------
(NLG MILLIONS) % (NLG MILLIONS) % (NLG MILLIONS) %

Time deposits from banks
domestic....................... 29,622 1,503 5.07 23,638 1,330 5.63 16,352 918 5.61
foreign........................ 25,600 1,393 5.44 21,016 1,347 6.41 19,800 1,152 5.82
Demand deposits(7)
domestic....................... 39,978 365 0.91 37,610 484 1.29 36,403 579 1.59
foreign........................ 2,748 -- -- 1,688 -- -- 1,364 -- --
Time deposits(7)
domestic....................... 35,241 1,892 5.37 41,230 2,366 5.74 40,153 2,394 5.96
foreign........................ 10,497 514 4.90 7,470 442 5.92 6,232 436 7.00
Savings deposits(7)
domestic....................... 67,066 2,738 4.08 53,713 2,545 4.74 49,757 2,319 4.66
foreign........................ 1,227 118 9.62 819 43 5.25 756 38 5.03
Short-term debt
domestic....................... 1,460 74 5.07 1,486 95 6.39 1,567 100 6.38
foreign........................ 10,644 617 5.80 7,279 557 7.65 6,441 484 7.51
Long-term debt
domestic....................... 18,444 1,292 7.00 16,948 1,200 7.08 15,557 1,029 6.61
foreign........................ 1,719 105 6.11 877 52 5.93 500 34 6.80
Subordinated liabilities
domestic....................... 6,366 345 5.42 4,816 254 5.27 4,389 294 6.70
foreign........................ 229 22 9.61 -- -- -- -- -- --
Other interest-bearing
liabilities
domestic....................... 5,279 390 7.39 2,965 215 7.25 1,765 134 7.59
foreign(2)..................... 7,689 743 9.66 5,069 498 9.82 4,823 775 16.07
------- ------ ----- ------- ------ ----- ------- ------ -----
Total............................ 263,809 12,111 4.59 226,624 11,428 5.04 205,859 10,686 5.19
Non-interest bearing
liabilities.................... 20,055 16,330 13,398
------- ------- -------
Total Liabilities....... 283,864 242,954 219,257
Group Capital.................... 12,774 10,355 9,279
------- ------- -------
Total Liabilities and
Capital............... 296,638 253,309 228,536
======= ======= =======
Percentage of liabilities
applicable to foreign
operations..................... 25.3% 21.1% 20.5%
Other interest expense
(reconciliation to Consolidated
Financial Statements):
-- interest on off-balance
instruments(8).............. 558 492 611
-- other....................... 335 193 203
------ ------ ------
Total interest expense........... 13,004 12,113 11,500
------ ------ ------
Total net interest result........ 7,251 6,258 6,288
====== ====== ======

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174

- ---------------

(1) Substantially all interest-earning securities held by the banking operations
of ING are taxable securities.

(2) Relative high average yield and average rates paid in 1994 for Other
interest-earning assets (foreign) and Other interest-bearing liabilities
(foreign) are mainly related to high interest rates in Brazil in 1994. See
"ING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS -- Banking Operations".

(3) Includes amortization of premiums and discounts and deferred realized gains
and losses on sales of investments in debt securities on a straight-line
basis over the estimated average remaining life of the portfolio.

(4) Lending commissions are recognized on a cash basis.

(5) Interest on non-performing loans is included when calculating the average
yield in this table but excluded from interest income reported in the
consolidated profit and loss account.

(6) Includes amortization of deferred realized gains and losses on off-balance
sheet hedging instruments on a straight-line basis over the estimated
average remaining life of the portfolio and interest accrued on hedging
instruments, primarily on interest rate swaps.

(7) These captions do not include deposits from banks.

(8) Includes accrued interest expense on hedging instruments, primarily on
interest rate swaps.

160
175

ANALYSIS OF CHANGES IN NET INTEREST INCOME

The following table allocates changes in ING's interest income and expense
and net interest result between changes in average balances and rates for the
periods indicated. Changes due to a combination of volume and rate have been
allocated to changes in average volume. The net changes in interest income,
interest expense and net interest result, as calculated in this table, have been
reconciled to the changes in interest income, interest expense and net interest
result in the Consolidated Financial Statements. See introduction to "-- Average
Balances and Interest Rates" for a discussion of the differences between
interest income, interest expense and net interest result as calculated in the
following table and as set forth in the Consolidated Financial Statements.

1996 OVER 1995 1995 OVER 1994
INCREASE (DECREASE) INCREASE (DECREASE)
DUE TO CHANGES IN DUE TO CHANGES IN
--------------------------- ---------------------------
AVERAGE AVERAGE NET AVERAGE AVERAGE NET
VOLUME RATE CHANGE VOLUME RATE CHANGE
------ ------- ------ ------ ------- ------
(NLG MILLIONS) (NLG MILLIONS)

Interest-earning assets
Time deposits to banks
domestic............................. 51 (72) (21) 78 (39) 39
foreign.............................. 64 (313) (249) 142 (125) 17
Loans and advances
domestic............................. 846 (425) 421 1,054 (368) 686
foreign.............................. 734 (222) 512 113 185 298
Interest-earning securities
domestic............................. 433 (114) 319 99 (100) (1)
foreign.............................. 377 (103) 274 139 (63) 76
Other interest-earning assets
domestic............................. (43) 21 (22) (40) (93) (133)
foreign.............................. 121 65 186 62 (451) (389)
Interest income
domestic............................. 1,287 (590) 697 1,191 (600) 591
foreign.............................. 1,296 (573) 723 456 (454) 2
----- ------ ---- ----- ------ ----
Total.................................. 2,583 (1,163) 1,420 1,647 (1,054) 593
Other interest income (reconciliation
to Consolidated Financial
Statements).......................... 464 40
---- ----
Total interest income.................. 1,884 633
Interest-bearing liabilities
Time deposits from banks
domestic............................. 303 (130) 173 410 2 412
foreign.............................. 249 (204) 45 78 117 195
Demand deposits
domestic............................. 22 (141) (119) 16 (110) (94)
Time deposits
domestic............................. (322) (152) (474) 62 (90) (28)
foreign.............................. 148 (77) 71 73 (67) 6
Savings deposits
domestic............................. 545 (353) 192 187 39 226
foreign.............................. 39 36 75 3 2 5
Short-term debt
domestic............................. (1) (20) (21) (5) -- (5)
foreign.............................. 195 (135) 60 64 9 73

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176

1996 OVER 1995 1995 OVER 1994
INCREASE (DECREASE) INCREASE (DECREASE)
DUE TO CHANGES IN DUE TO CHANGES IN
AVERAGE AVERAGE NET AVERAGE AVERAGE NET
VOLUME RATE CHANGE VOLUME RATE CHANGE
----- ------ ---- ----- ------ ----
(NLG MILLIONS) (NLG MILLIONS)

Long-term debt
domestic............................. 105 (12) 93 98 73 171
foreign.............................. 52 2 54 22 (5) 17
Subordinated liabilities
domestic............................. 84 7 91 22 (63) (41)
foreign.............................. 22 -- 22 -- -- --
Other interest-bearing liabilities
domestic............................. 171 4 175 87 (6) 81
foreign.............................. 253 (8) 245 24 (302) (278)
Interest expense
domestic............................. 908 (798) 110 877 (155) 722
foreign.............................. 958 (386) 572 265 (246) 19
----- ------ ---- ----- ------ ----
Total.................................. 1,866 (1,184) 682 1,142 (401) 741
Other interest expense (reconciliation
to Consolidated Financial
Statements).......................... 209 (79)
---- ----
Total interest expense................. 891 662
Net interest
domestic............................. 380 207 587 314 (445) (131)
foreign.............................. 338 (187) 151 190 (208) (18)
----- ------ ---- ----- ------ ----
Net interest........................... 718 20 738 504 (653) (149)
Other net interest result
(reconciliation to Consolidated
Financial Statements)................ 255 119
---- ----
Net interest result.......... 993 (30)
==== ====

LOAN PORTFOLIO

LOANS AND ADVANCES TO BANKS AND CUSTOMERS

Loans and advances to banks includes all receivables from credit
institutions, except for cash, current accounts and deposits with other banks
(including central banks). Lending facilities to corporate and personal
customers encompass loans, overdrafts, finance lease receivables, and so on.

The following table sets forth gross loans and advances to banks and
customers at December 31.

CALENDAR PERIOD
-------------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
(NLG MILLIONS)

By domestic offices:
Loans guaranteed by public
authorities........................ 25,347 26,676 26,359 30,008 31,345
Loans secured by mortgages........... 82,690 68,264 59,244 50,616 44,554
Loans to or guaranteed by credit
institutions....................... 2,788 2,052 2,685 4,508 3,338
Other personal lending............... 5,545 4,854 4,990 4,688 4,583
Other corporate lending.............. 41,755 36,017 33,392 34,968 33,224
------- ------- ------- ------- -------
Total domestic offices.......... 158,125 137,863 126,670 124,788 117,044
------- ------- ------- ------- -------

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177

CALENDAR PERIOD
-------------------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
(NLG MILLIONS)

By foreign offices:
Loans guaranteed by public
authorities........................ 1,291 1,028 728 1,192 932
Loans secured by mortgages........... 3,016 1,811 2,415 2,544 1,788
Loans to or guaranteed by credit
institutions....................... 6,581 4,316 3,305 3,767 3,528
Other personal lending............... 770 1 1 1 1
Other corporate lending.............. 46,689 32,087 26,864 22,677 20,895
------- ------- ------- ------- -------
Total foreign offices........... 58,347 39,243 33,313 30,181 27,144
------- ------- ------- ------- -------
Total gross loans and
advances to banks and
customers................ 216,472 177,106 159,983 154,969 144,188
======= ======= ======= ======= =======

The total net loans and advances to banks and customers amounted to NLG
210,040 million at December 31, 1996 and to NLG 171,623 million at December 31,
1995. The difference between total net loans and advances to banks and customers
on the one hand and total gross loans and advances to banks and customers on the
other, amounting to NLG 6,432 million and NLG 5,483 million at December 31, 1996
and 1995, respectively, represents the combined provisions for loan losses and
general banking risks.

MATURITIES AND SENSITIVITY OF LOANS TO CHANGES IN INTEREST RATES

The following table analyzes loans and advances to banks and customers by
time remaining until maturity as at December 31, 1996.

1 YEAR AFTER
OR 1 YEAR 5
LESS TO 5 YEARS YEARS TOTAL
------ ---------- ------ -------
(NLG MILLIONS)

By domestic offices:
Loans guaranteed by public authorities............ 4,696 9,704 10,947 25,347
Loans secured by mortgages........................ 17,650 26,381 38,659 82,690
Loans guaranteed by credit institutions........... 1,266 942 580 2,788
Other personal lending............................ 4,494 969 82 5,545
Other corporate lending........................... 22,463 6,743 12,549 41,755
------ ------ ------ -------
Total domestic offices....................... 50,569 44,739 62,817 158,125
By foreign offices:
Loans guaranteed by public authorities............ 525 293 473 1,291
Loans secured by mortgages........................ 521 617 1,878 3,016
Loans guaranteed by credit institutions........... 5,458 374 749 6,581
Other personal lending............................ 305 430 35 770
Other corporate lending........................... 32,999 8,780 4,910 46,689
------ ------ ------ -------
Total foreign offices........................ 39,808 10,494 8,045 58,347
------ ------ ------ -------
Total gross loans and advances to banks
and customers......................... 90,377 55,233 70,862 216,472
====== ====== ====== =======

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The following table analyzes loans and advances to banks and customers by
interest rate sensitivity by maturity as at December 31, 1996.

1 YEAR OR LESS OVER 1 YEAR TOTAL
-------------- ----------- -------
(NLG MILLIONS)

Non-interest earning.................................. 10,727 122 10,849
Fixed interest rate................................... 34,019 39,309 73,328
Semi-fixed interest rate(1)........................... 4,211 69,291 73,502
Variable interest rate................................ 41,420 17,373 58,793
------ ------- -------
Total............................................ 90,377 126,095 216,472
====== ======= =======

- ---------------
(1) Loans which have an interest rate that remains fixed for more than one year
and which can then be changed are classified as "semi-fixed".

RISK ELEMENTS

NON-ACCRUAL AND PAST DUE LOANS

Each of the business units within the banking operations of ING maintains
its own system for servicing and monitoring past due loans. ING's international
banking offices and subsidiaries generally account for delinquent loans in
accordance with U.S. GAAP. When a loan is in default as to payment of principal
and interest for 90 days or when, in the judgment of management, the accrual of
interest should cease before 90 days, such a loan is placed on non-accrual
status. Any accrued but unpaid interest is reversed against current period
interest revenue. Interest payments received on a cash basis during the period
are recorded as interest income. Domestic banking offices follow the same policy
for consumer mortgage and personal loans. All of the foregoing loans are
included in the table below under non-accrual.

Under accruing but past due 90 days, all loans are reported which are still
accruing but on which principal or interest payments are contractually past due
90 days or more. Domestic commercial loans, combined with an overdraft facility,
which make up approximately 50% of the reported amount in the domestic accruing
but past due 90 days category, were included in the 1996 table below if the
overdraft facility exceeded a specified limit for 90 days or more at December
31, 1996. The amount of loans meeting this criteria in prior years was estimated
by management based on the size of the underlying portfolio and specific risk
factors.

Based on the foregoing, the following table sets forth management's
estimate, without giving effect to available security or related specific
provisions, of the amounts of its loan portfolio in each of the two categories
indicated.

CALENDAR PERIOD
------------------------------------
1996 1995 1994 1993
------ ------ ------ ------
(NLG MILLIONS)

Non-accrual
domestic.............................................. 2,381 2,622 2,278 2,631
foreign............................................... 1,015 700 1,011 622
----- ----- ----- -----
Sub-total.......................................... 3,396 3,322 3,289 3,253
----- ----- ----- -----

Accruing but past due 90 days
domestic.............................................. 1,156 1,112 1,089 1,049
foreign............................................... 136 104 104 118
----- ----- ----- -----
Sub-total.......................................... 1,292 1,216 1,193 1,167
----- ----- ----- -----
Total................................................. 4,688 4,538 4,482 4,420
===== ===== ===== =====

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179

RESTRUCTURED LOANS

The following table sets forth the troubled debt restructuring loans
consisting of loans which are accruing interest but at rates different from the
original terms of such loans as a result of the terms of any such restructuring.

Troubled debt restructurings
domestic.................................................... 386 117 677 506
foreign..................................................... 353 36 -- --
--- --- --- ---
Total troubled debt restructurings............................ 739 153 677 506
=== === === ===

On receipt of cash, suspended interest is recovered prior to the principal
outstanding, except that, where amounts are outstanding for costs and other late
payment charges, the cash received is first used to recover these costs and
charges. When it becomes apparent that recovery of interest is unlikely,
interest ceases to be accrued and is suspended.

Interest income, which would have been recognized in 1996 under the
original terms of the non-accrual and restructured loans, amounted to be an
estimated NLG 239 million from loans granted by domestic offices and an
estimated NLG 71 million from loans granted by foreign offices. Interest income
of approximately NLG 147 million from such domestic loans and approximately NLG
47 million from such foreign loans was recognized in the profit and loss account
for 1996.

At December 31, 1996, ING had loans amounting to NLG 3,994 million which
were not included in the risk elements schedule above. These loans are
considered potential problem loans as the credit review officers obtained
information which caused doubts as to the repayment of the loan by the borrower.
Of this total, NLG 3,426 million relates to domestic loans and NLG 568 million
relates to foreign loans. Appropriate provisions, following ING's credit risk
rating system, have been established for these loans.

CROSS-BORDER OUTSTANDINGS

Cross-border outstandings are defined as loans (including accrued
interest), acceptances, interest-earning deposits with other banks, other
interest-earning investments and any other monetary assets which are denominated
in Dutch guilders or other non-local currency. To the extent that material local
currency outstandings are not hedged or are not funded by local currency
borrowings, such amounts are included in cross-border outstandings.

The following tables analyze cross-border outstandings as of the end of
each of the last three years, stating the name of the country and the aggregate
amount of cross-border outstandings to borrowers in each foreign country where
such outstandings exceed 1% of total assets, by the following categories.

Under guarantees, certain trade financing and other items are deducted from
the gross outstanding, taking into account Dutch Central Bank requirements. Also
deducted from gross outstandings are guaranteed or secured loans, provided that
political and transfer risks are also covered explicitly by the guarantee or
security. As at December 31, 1996, there were no outstandings exceeding 1% of
total assets in any country where current conditions give rise to liquidity
problems which are expected to have a material impact on the timely repayment of
interest or principal.

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180

CROSS-BORDER OUTSTANDINGS

AT DECEMBER 31, 1996
-------------------------------------------------------------------------------------------------------------------
GUARANTEES
GOVERNMENT & BANKS & OTHER TRADE
OFFICIAL FINANCIAL COMMERCIAL & GUARANTEES FIN., TOTAL
INSTITUTIONS INSTITUTIONS INDUSTRIAL COMMITMENTS OTHER TOTAL GROSS AND PLEDGES OTHER NET
------------ ------------- ------------ ----------- ----- ----------- ----------- ---------- ------
(NLG MILLIONS)

Germany... 16,715 1,877 1,267 455 1,032 21,346 -- (700) 20,646
United
Kingdom... 3,193 8,532 4,343 503 2,382 18,953 -- (1,657) 17,296
United
States... 281 1,212 8,745 1,236 7,388 18,862 -- (7,453) 11,409
Belgium... 545 3,305 3,185 400 554 7,989 -- (730) 7,259
France... 6 3,703 1,673 165 1,232 6,779 -- (110) 6,669
Japan... -- 1,418 1,209 122 3,305 6,054 -- (1,271) 4,783
Hong
Kong... 9 1,212 1,570 678 -- 3,469 -- (13) 3,456
Switzerland... -- 1,136 974 225 976 3,311 -- (572) 2,739
The
Netherlands
Antilles... 1 4 1,045 155 4,211 5,416 -- (4,262) 1,154
Brazil... 1,286 1,000 2,553 102 338 5,279 (975) (4,140) 164

AT DECEMBER 31, 1995
------------------------------------------------------------------------------------------------------------------
GUARANTEES
GOVERNMENT & BANKS & OTHER TRADE
OFFICIAL FINANCIAL COMMERCIAL & GUARANTEES FIN., TOTAL
INSTITUTIONS INSTITUTIONS INDUSTRIAL COMMITMENTS OTHER TOTAL GROSS AND PLEDGES OTHER NET
------------ ------------- ------------ ----------- ----- ----------- ----------- ---------- ------
(NLG MILLIONS)

United
Kingdom... 125 7,058 3,071 664 3,094 14,012 -- (2,902) 11,110
Germany... 6,164 1,531 1,009 365 2,327 11,396 -- (754) 10,642
Belgium... 82 3,904 3,507 180 844 8,517 -- (833) 7,684
France... 627 3,762 1,273 67 1,450 7,179 -- -- 7,179
United
States... 271 1,381 4,505 265 5,225 11,647 -- (5,031) 6,616
Japan... 7 1,006 958 6 3,321 5,298 -- (1,187) 4,111
Spain... 44 601 1,435 614 73 2,767 -- -- 2,767
Switzerland... -- 614 924 173 1,180 2,891 -- (321) 2,570
Italy... 227 769 461 155 1,094 2,706 -- (471) 2,235
The
Netherlands
Antilles... 1 17 926 61 2,521 3,526 -- (2,512) 1,014
Mexico... 2,357 204 724 19 26 3,330 (2,064) (982) 284
Brazil... 1,082 766 2,087 140 628 4,703 (801) (3,748) 154

AT DECEMBER 31, 1994
-------------------------------------------------------------------------------------------------------------------
GUARANTEES
GOVERNMENT & BANKS & OTHER TRADE
OFFICIAL FINANCIAL COMMERCIAL & GUARANTEES FIN., TOTAL
INSTITUTIONS INSTITUTIONS INDUSTRIAL COMMITMENTS OTHER TOTAL GROSS AND PLEDGES OTHER NET
------------- ------------- ------------ ----------- ----- ----------- ----------- ---------- ------
(NLG MILLIONS)

Germany... 8,604 867 643 46 836 10,996 -- (494) 10,502
United
Kingdom... 118 3,940 2,727 199 1,786 8,770 (131) -- 8,639
Belgium... 82 2,226 3,345 205 311 6,169 -- (304) 5,865
United
States... 33 3,131 4,035 190 4,499 11,888 -- (7,068) 4,820
Japan... 1,353 979 24 4,197 6,553 -- (1,906) 4,647
France... 89 2,416 761 146 1,138 4,550 -- -- 4,550
Italy... 60 1,135 964 2 735 2,896 -- -- 2,896
The
Netherlands
Antilles... -- 10 484 58 2,687 3,239 -- (2,687) 552
Brazil... 1,338 412 1,548 226 499 4,023 (287) (3,570) 166

Commitments such as irrevocable letters of credit are not included in the
tables above. These commitments amounted to NLG 4,041 million at December 31,
1996, NLG 2,709 million at December 31, 1995 and NLG 1,096 million at December
31, 1994.

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181

At December 31, 1996, 1995 and 1994, the following countries had
cross-border outstandings between 0.75% and 1% of total assets.

CROSS-BORDER
OUTSTANDINGS
AS AT DECEMBER 31
------------------
GROSS NET
------ ------

1996
----
Italy..................................................... 2,937 2,622
Canada.................................................... 2,513 2,487
South Korea............................................... 2,360 1,922
Poland.................................................... 2,611 1,641
Mexico.................................................... 2,878 764
Ireland................................................... 2,774 379
Philippines............................................... 2,901 55
1995
----
Hong Kong................................................. 2,128 2,128
Singapore................................................. 1,858 1,654
1994
----
Spain..................................................... 2,077 2,077
Switzerland............................................... 1,726 1,197
South Korea............................................... 1,725 1,077

LOAN CONCENTRATION

The following industry concentrations were in excess of 10% of total loans
as at December 31, 1996.

TOTAL OUTSTANDINGS
------------------
(NLG MILLIONS)

Service industry........................................... 52,559
Financial institutions..................................... 48,889
Manufacturing.............................................. 24,917

BAD AND DOUBTFUL DEBTS

A provision for loan losses is maintained for the banking operations that
is considered adequate to absorb losses arising from the existing portfolios of
loans. The provision for loan losses is made in accordance with the overall
supervisory direction of the Dutch Central Bank. Each operating company makes
provisions for bad and doubtful debts, based on centrally given instructions.
The provisions are reviewed on a quarterly basis by management. On the face of
the balance sheet, the provisions are deducted from lending and banks. The net
additions to or subtractions from such balance sheet provisions are reflected in
ING's profit and loss account, principally under value adjustments to
receivables.

In determining the amount of the provisions, corporate loans are assessed
on a case-by-case basis, and the following factors are considered:

-- the financial standing of the customer, including a realistic assessment
of the likelihood of repayment of the loan within an acceptable period
and the extent of ING's other commitments to the same customer;

-- the realizable value of any security for the loan; and

-- the costs associated with obtaining repayment and realization of any
such security.

For certain homogeneous groups of small personal and corporate loans,
provisions are also assessed using statistical techniques.

On certain foreign outstandings a country provision is calculated for which
detailed instructions are given by the Dutch Central Bank. This provision is
meant to reduce the risk of a foreign public authority

167
182

failing to fulfil its obligations or impeding the transfer of funds from debtors
in the country concerned to creditors in other countries, for reasons of a
financial (transfer risk) or other (political risk) nature.

When there is no prospect of recovering principal or interest, the
outstanding debt and any suspense balances are written off.

SUMMARY OF LOAN LOSS EXPERIENCE

The following table shows the movements in allocation of the provision for
loan losses on loans accounted for as loans and advances to banks and customers
for the past five years.

CALENDAR PERIOD
---------------------------------------------
1996 1995 1994 1993 1992
----- ----- ----- ----- -----
(NLG MILLIONS)

Balance at January 1............................ 3,644 3,554 3,383 3,154 2,467
Charge-offs:
Domestic:
Loans guaranteed by public authorities........
Loans secured by mortgages.................... (26) (10) (9) (1) (2)
Loans to or guaranteed by credit
institutions...............................
Other personal lending........................ (56) (62) (53) (58) (34)
Other corporate lending....................... (329) (505) (492) (468) (370)
Foreign:
Loans guaranteed by public authorities........ (2) -- -- -- --
Loans secured by mortgages.................... (15) -- -- -- --
Loans to or guaranteed by credit
institutions...............................
Other personal lending........................ 3 -- -- -- --
Other corporate lending....................... (202) (136) (239) (329) (143)
----- ----- ----- ----- -----
Total charge-offs..................... (627) (713) (793) (856) (549)
Recoveries:
Domestic:
Loans guaranteed by public authorities........ -- -- -- -- --
Loans secured by mortgages.................... 41 -- -- -- 2
Loans to or guaranteed by credit
institutions............................... -- 1 -- -- --
Other personal lending........................ 8 5 3 -- 4
Other corporate lending....................... 29 21 23 16 20
Foreign:
Loans guaranteed by public authorities........ -- -- -- -- --
Loans secured by mortgages.................... 1 1 -- -- --
Loans to or guaranteed by credit
institutions............................... -- -- -- -- --
Other personal lending........................ -- -- -- -- --
Other corporate lending....................... 5 3 9 8 --
----- ----- ----- ----- -----
Total recoveries...................... 84 31 35 24 26
----- ----- ----- ----- -----
Net charge-offs................................. (543) (682) (758) (832) (523)
Additions (included in value adjustments to
receivables).................................. 781 772 929 1,062 1,210
Balance at December 31.......................... 3,882 3,644 3,554 3,384 3,154
===== ===== ===== ===== =====
Ratio of net charge-offs to average loans and
advances to banks and customers............... 0.28% 0.40% 0.49% 0.51% 0.40%
===== ===== ===== ===== =====

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183

The following table shows the allocation of the provision for loan losses
on loans accounted for as loans and advances to banks and customers for the past
five years.

DECEMBER 31,
-----------------------------------------------------------------------------------
1996 1995 1994 1993 1992
--------------- --------------- --------------- --------------- ---------------
NLG %(1) NLG %(1) NLG %(1) NLG %(1) NLG %(1)
----- ------- ----- ------- ----- ------- ----- ------- ----- -------
(NLG MILLIONS)

Domestic:
Loans guaranteed by
public authorities..... 1 11.71 -- 15.06 -- 16.48 -- 19.36 -- 21.74
Loans secured by
mortgages.............. 221 38.20 42 38.54 32 37.02 20 32.67 38 30.89
Loans to or guaranteed by
credit institutions.... -- 1.29 -- 1.16 2 1.68 4 2.91 7 2.32
Other personal lending... 141 2.56 139 2.74 153 3.12 147 3.03 202 3.18
Other corporate
lending................ 1,803 19.29 1,783 20.34 1,830 20.87 1,725 22.56 1,468 23.04
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
Total domestic......... 2,166 73.05 1,964 77.84 2,017 79.17 1,896 80.53 1,715 81.17
Foreign:
Loans guaranteed by
public authorities..... -- 0.60 -- 0.58 -- 0.46 -- 0.77 -- 0.65
Loans secured by
mortgages.............. 300 1.39 -- 1.03 -- 1.51 -- 1.64 -- 1.24
Loans to or guaranteed by
credit institutions.... 105 3.04 108 2.44 171 2.07 313 2.43 222 2.45
Other personal lending... 12 0.35
Other corporate
lending................ 1,299 21.57 1,572 18.11 1,366 16.79 1,174 14.63 1,217 14.49
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
Total foreign.......... 1,716 26.95 1,680 22.16 1,537 20.83 1,487 19.47 1,439 18.83
----- ------ ----- ------ ----- ------ ----- ------ ----- ------
Total............. 3,882 100.00 3,644 100.00 3,554 100.00 3,383 100.00 3,154 100.00
===== ====== ===== ====== ===== ====== ===== ====== ===== ======

- ---------------
(1) The percentages represent the loans in each category as a percentage to the
total loan portfolio for loans and advances to banks and customers.

The following table shows the provision for loan losses on loans accounted
for as loans and advances to banks and customers as a percentage to the related
loan portfolio of the past five years.

DECEMBER 31,
----------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----

Domestic:
Loans guaranteed by public authorities............... 0.00% 0.00% 0.00% 0.00% 0.00%
Loans secured by mortgages........................... 0.27 0.06 0.05 0.04 0.09
Loans to or guaranteed by credit institutions........ 0.00 0.00 0.07 0.09 0.21
Other personal lending............................... 2.54 2.86 3.07 3.14 4.41
Other corporate lending.............................. 4.31 4.95 5.48 4.93 4.42
Total domestic............................... 1.37% 1.42% 1.59% 1.52% 1.47%
Foreign:
Loans guaranteed by public authorities............... 0.00% 0.00% 0.00% 0.00% 0.00%
Loans secured by mortgages........................... 9.96 0.00 0.00 0.00 0.00
Loans to or guaranteed by credit institutions........ 1.60 2.50 5.17 8.31 6.29
Other personal lending............................... 1.59 0.00 0.00 0.00 0.00
Other corporate lending.............................. 2.78 4.90 5.08 5.18 5.82
Total foreign................................ 2.94% 4.28% 4.61% 4.93% 5.30%
Total........................................ 1.79% 2.05% 2.22% 2.18% 2.19%

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184

DEPOSITS

The aggregate average balance of all ING's interest-bearing deposits (from
banks and customer accounts) increased by 18.9% to NLG 212 billion. Interest
rates paid reflect market conditions. The effect on net interest income depends
upon competitive pricing and the level of interest income which can be generated
through the use of funds.

Deposits by banks are primarily time deposits, the majority of which are
raised by ING's Amsterdam based money market operations in the world's major
financial markets.

Certificates of deposit represent 30% of the category debt securities (24%
at the end of 1995). These instruments are issued as part of liquidity
management with maturities generally of less than three months.

1996 1995 1994
------------------- ------------------- -------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
DEPOSIT RATE DEPOSIT RATE DEPOSIT RATE
------- ------- ------- ------- ------- -------
(NLG % (NLG % (NLG %
MILLIONS) MILLIONS) MILLIONS)

DEPOSITS BY BANKS

In domestic offices:
Demand -- non-interest
bearing.............. 1,236 1,117 230
-- interest bearing..... 2,886 4.8 2,084 4.6 1,632 5.7
Time........................... 33,804 5.3 21,884 6.1 18,126 7.0
------- ------- -------
Total domestic offices.... 37,926 25,085 19,988

In foreign offices:
Demand -- non-interest
bearing.............. 1,909 640 887
-- interest bearing..... 2,863 5.3 1,253 6.2 1,431 8.3
Time........................... 21,880 5.3 21,896 5.9 17,635 6.8
------- ------- -------
Total foreign offices..... 26,652 23,789 19,953
------- ------- -------

Total deposits by
banks.............. 64,578 48,874 39,941
======= ======= =======
CUSTOMER ACCOUNTS

In domestic offices:
Demand -- non-interest
bearing.............. 16,666 14,972 13,969
-- interest bearing..... 61,815 3.1 57,513 3.7 56,669 2.6
Savings........................ 38,061 4.2 22,517 5.0 17,161 6.5
Time........................... 28,817 5.5 38,729 5.6 37,291 6.8
------- ------- -------
Total domestic offices.... 145,359 133,731 125,090

In foreign offices:
Demand -- non-interest
bearing.............. 5,321 2,097 359
-- interest bearing..... 3,857 4.5 2,667 4.0 1,526 4.7
Savings........................ 2,651 15.5 415 5.3 257 2.4
Time........................... 15,455 3.7 9,434 7.2 8,179 7.3
------- ------- -------
Total foreign offices..... 27,284 14,613 10,321
------- ------- -------
Total customer
accounts........... 172,643 148,344 135,411
======= ======= =======

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185

DEBT SECURITIES

In domestic offices:
Debentures..................... 14,069 6.8 12,827 6.5 11,729 7.2
Certificates of deposit........ 172 3.4 42 7.1 285 6.3
Other.......................... 9 3.4 15 8.0 18 7.5
------- ------- -------
Total domestic offices.... 14,250 12,884 12,032

In foreign offices:
Debentures..................... 1,102 6.3 201 5.5 0 0.0
Certificates of deposit........ 7,359 5.9 5,081 7.7 2,632 6.4
Other.......................... 1,948 6.0 3,117 4.5 3,070 6.4
------- ------- -------
Total foreign offices..... 10,409 8,399 5,702
------- ------- -------
Total debt
securities......... 24,659 21,283 17,734
======= ======= =======

For the years ended December 31, 1996, 1995 and 1994, the aggregate amount
of deposits by foreign depositors in domestic offices was NLG 47,381 million,
NLG 32,150 million and NLG 26,555 million, respectively.

At December 31, 1996, the maturity of domestic time certificates of deposit
and other time deposits, exceeding ECU 25,000, was as shown in the following
table.

TIME CERTIFICATES OF
DEPOSIT OTHER TIME DEPOSITS
----------------------- -----------------------
(NLG % (NLG %
MILLIONS) MILLIONS)

3 months or less................................... 11,303 47.9% 43,251 78.4%
6 months or less but over 3 months................. 912 3.9% 4,546 8.2%
12 months or less but over 6 months................ 1,973 8.4% 2,241 4.1%
Over 12 months..................................... 9,420 39.8% 5,153 9.3%
------ ----- ------ -----
Total.................................... 23,608 100.0% 55,191 100.0%
====== ===== ====== =====

The following table shows the amount outstanding for time certificates of
deposit and other time deposits exceeding ECU 25,000 issued by foreign offices
at December 31, 1996.

DECEMBER 31, 1996
-----------------
(NLG MILLIONS)

Time certificates of deposit................................ 11,420
Other time deposits......................................... 34,788
------

Total............................................. 46,208
======

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186

ING BUSINESS OPERATIONS

GENERAL

YEAR ENDED DECEMBER 31,
------------------------------
1996 1995 1994
------- ------- -------
(NLG MILLIONS)

Total Income......................................... 47,551 41,203 37,048
Result before taxation(1)............................ 4,559 3,800 3,292
Net profit........................................... 3,321 2,649 2,302
Total assets......................................... 483,898 396,264 353,667
Shareholders' equity................................. 34,124 23,777 21,758

- ---------------
(1) Net of dividends on own Shares of NLG 72 million, NLG 58 million and NLG 51
million in 1996, 1995 and 1994, respectively.

In 1996 ING had gross written premiums of NLG 24,322 million, making it the
largest insurer in the Netherlands. Management believes that at December 31,
1995, ING was the 11th largest insurer in Europe and the 32nd largest insurer in
the world, based on gross premiums written. At the end of 1996, ING Bank had
total assets of NLG 311.4 billion which would make it the third largest bank in
the Netherlands. Management believes that at December 31, 1995, ING Bank was the
32nd largest bank in Europe and the 51st largest bank in the world, based on
total assets. Management also believes that, based on consolidated total assets
at December 31, 1995, ING was the 33rd largest financial institution in the
world. ING's products and services are marketed under a variety of
well-recognized and strong brand names, including Nationale-Nederlanden, ING
Bank and ING Barings worldwide; Postbank in the Netherlands; Mercantile Mutual
in Australia; NN Financial, Commerce Group, Belair, Halifax and Western Union in
Canada; and Life of Georgia, Southland Life, Security Life, Indiana Insurance,
Peerless Insurance and Excelsior Insurance in the United States. For the year
ended December 31, 1996, ING's total income was NLG 47,551 million and its net
profit was NLG 3,321 million. ING had consolidated total assets of NLG 483.9
billion at the end of 1996.

In the Netherlands, ING is the largest life and pension insurer and the
second largest non-life insurer, in each case based on gross premiums written in
1995. ING Bank, in addition to being the third largest bank in the Netherlands
based on total assets in 1996, also has the leading position in the Dutch
payments transfer system. ING, through its banking and insurance operations, has
a financial relationship with approximately 75% of households in the
Netherlands.

Outside the Netherlands, ING's international insurance operations
concentrate primarily on servicing individuals and small and medium-sized
enterprises in regional and national markets. ING occupies a leading position in
life insurance in several countries and has utilized the establishment of new
greenfield insurance operations as a key to its strategy for international
expansion in emerging markets outside the Netherlands. ING currently has
insurance activities in 25 countries outside the Netherlands. The international
banking operations of ING have gained a reputation for being leaders in emerging
markets corporate and investment banking and also have a significant presence in
international trade and commodity finance. ING offers international corporate
and investment banking services through a network of 125 offices in 51
countries. In recent years ING has rapidly expanded its asset management and
investment banking activities, most notably as a result of the acquisition of
the principal assets and liabilities of the United Kingdom merchant bank Barings
in March 1995.

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187

The following sets forth ING's income by geographic area for the years
indicated.

YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

The Netherlands................................................ 26,125 23,750 21,337
Rest of Europe................................................. 5,277 4,223 2,731
North America.................................................. 10,366 8,936 8,581
South America.................................................. 698 512 822
Asia........................................................... 2,096 1,839 1,466
Australia...................................................... 2,939 1,901 2,202
Other.......................................................... 345 340 298
Revenue between geographic areas............................... (295) (298) (389)
------ ------ ------
Total................................................ 47,551 41,203 37,048
====== ====== ======

BACKGROUND

On March 4, 1991, Nationale-Nederlanden N.V., the largest Dutch insurance
group, and NMB Postbank Groep N.V., the Netherlands' third largest bank, merged
to form ING. On that date, the newly formed holding company Internationale
Nederlanden Groep N.V. exchanged its shares for the shares of
Nationale-Nederlanden N.V. and NMB Postbank Groep N.V. The merger created a
group with varied business units with their own markets, product mix and strong
brand names.

On December 1, 1995, the registered name of Internationale Nederlanden
Groep N.V. was changed to ING Groep N.V. ING's principal subholdings, ING
Verzekeringen N.V. and ING Bank N.V., respectively, remained legally distinct
entities after the merger. These subholdings are subject to separate regulatory
supervision with respect to their respective insurance and banking activities.
However, since April 1995, ING's operational management structure has been
designed to ensure that maximum advantage is taken of the possibilities for
cooperation between ING's insurance and banking activities, strategically as
well as commercially, through the creation of four management centres, each of
which is headed by an Executive Committee. These management centres each have
responsibility for elements of both ING's insurance and banking businesses. See
"-- Management Structure". To facilitate the implementation of a single strategy
for ING as a whole, the chairman and certain other members of each Executive
Committee are also members of the Executive Board of ING.

The term greenfield is used by ING to describe the establishment of a new
insurance operation outside the Netherlands. ING Insurance has a history of
expanding into new markets outside the Netherlands. This history can be traced
back to the 19th century, when "N.V. Assurantie Maatschappij De Nederlanden van
1845", a predecessor company of Nationale-Nederlanden N.V., started doing
business in Indonesia shortly after its incorporation. In subsequent years, that
company expanded its activities to many other countries abroad. After the merger
with Nationale Levensverzekering-Bank N.V. in 1963, forming
Nationale-Nederlanden N.V., internationalization proceeded with acquisitions in
the United States, Canada and Australia in the 1970s and 1980s. In the late
1970s and 1980s greenfield operations were started in Spain, Greece, Japan,
Korea and Taiwan. In the 1990s, ING Insurance started greenfield life operations
in the emerging markets of Hungary, Poland, the Czech Republic, the Slovak
Republic, Mexico and Argentina.

MANAGEMENT STRUCTURE

ING's legal (as well as financial and tax reporting) structure is distinct
from its management structure. While for regulatory, financial reporting and tax
purposes ING functions on a legal entity basis, in order to better integrate the
various financial products and services provided by ING companies, in 1994 four
management centres -- ING Nederland, ING Financial Services International, ING
Corporate & Investment Banking and ING Asset Management -- were established
under the Executive Board of ING.

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188

Each management centre is headed by an Executive Committee, most members of
which are either members of the Executive Board or chief general managers of
business units belonging to that management centre.

The Executive Board (supported by corporate staff departments responsible
for strategy, communications, finance, risk control, controlling, actuarial,
accounting, tax, legal affairs and compliance) determines ING's corporate
strategy, prescribes solvency ratios and reserving levels, allocates resources,
sets financial performance targets and risk profiles for the management centres,
appoints senior management, manages ING's corporate image, establishes
information technology strategy, and monitors the realization of the objectives
established for ING. Certain actions of the Executive Board are subject to the
approval of the Supervisory Board, including the issuance or cancellation of
shares, acquisitions, the declaration of interim dividends, major capital
expenditures and matters concerning substantial changes in employee relations.
The Executive Committees formulate the strategic, commercial and financial
policy for the management centres in conformity with the strategy and
performance targets set by the Executive Board. Each Executive Committee is
responsible for the preparation of the annual budget of its management centre.
This budget is also approved by and monitored by the Executive Board. Each
Executive Committee also approves the strategy, commercial policy and the annual
budgets of the business units in its management centre and monitors the
realization of the policies and budgets of that management centre and its
business units. Within this framework the business units operate with a high
degree of autonomy.

The following sets forth ING's four management centres and the principal
organizational structure of each:

ING FINANCIAL ING CORPORATE &
ING SERVICES INVESTMENT ING ASSET
NEDERLAND INTERNATIONAL BANKING MANAGEMENT
(Insurance and (Insurance and retail (Corporate and (Own and third-party
commercial banking in banking outside the investment banking funds management
the Netherlands) Netherlands) worldwide) worldwide)
- --------------------- --------------------- --------------------- ---------------------

Direct Marketing Europe & South ING Bank ING Investment
America International Management
Independent
Intermediaries North America ING Barings Baring Asset
Management
Branches Asia & Australia Treasury, Trading &
Sales International
Tied Agents Commercial Banking Private Banking
Global Clients
Division ING Real Estate

Global Risk ING Trust
Management
Parcom

Baring Private
Equity Partners

ING NEDERLAND

The ING Nederland management centre, which employed approximately 29,400
people on December 31, 1996, encompasses ING's insurance and commercial banking
operations in the Netherlands. ING Nederland's activities are organized by
distribution channels: Direct Marketing, INDEPENDENT INTERMEDIARIES, Branches
and TIED AGENTS.

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ING FINANCIAL SERVICES INTERNATIONAL

The ING Financial Services International ("FSI") management centre, which
employed approximately 23,500 people on December 31, 1996, encompasses insurance
and retail banking operations provided to individual customers and small to
medium-sized enterprises in markets outside the Netherlands. FSI's insurance
activities are organized by three geographic regions, Europe & South America,
North America and Asia & Australia, while its retail banking operations are
managed on a worldwide basis by product line.

ING CORPORATE & INVESTMENT BANKING

The ING Corporate & Investment Banking ("CIB") management centre, which
employed approximately 8,200 people on December 31, 1996, encompasses the
corporate and investment banking and treasury activities for corporate and
institutional clients worldwide. CIB operates through three primary business
units: ING Bank International, ING Barings and Treasury, Trading and Sales. CIB
also includes ING's Global Clients Division and Global Risk Management
department, which are business units with worldwide responsibility for
coordinating relationships with ING's largest clients and for monitoring ING's
international credit and counterparty risks, respectively. The business units in
CIB will be integrated in the near future. See "-- ING Corporate and Investment
Banking".

ING ASSET MANAGEMENT

The ING Asset Management centre, which employed approximately 2,200 people
on December 31, 1996, is responsible for asset management on behalf of the
insurance operations within ING as well as management of the investments
representing the shareholders' equity of ING Insurance. ING Asset Management
also manages ING's own-label and third-party investment funds, and third-party
institutional and individual assets.

MANAGEMENT CENTRES

ING NEDERLAND

General

The management centre ING Nederland encompasses all of ING's insurance and
commercial banking operations in the Dutch market. The business units within ING
Nederland have strong market positions in many areas of financial services and
use all distribution channels currently available to financial service providers
in the Dutch market. As a result, ING Nederland has been able to develop and
market itself as a provider of integrated financial services in the Netherlands.
The banking and insurance operating companies within ING Nederland are grouped
under the following four distribution channels:

INDEPENDENT
DIRECT MARKETING INTERMEDIARIES BRANCHES TIED AGENTS
- ---------------- -------------- -------- -----------

Postbank Nationale-Nederlanden ING Bank Nederland RVS

Tiel Utrecht Westland/Utrecht Hypotheekbank

NN Financiele Diensten Crediet en Effecten Bank

Regio Bank ING Lease

NVB/VOLA
Nationale Borg-Maatschappij

These distribution channels are described more fully below under
"-- Distribution Channels".

Virtually all of the ING Nederland operating companies service their retail
and corporate markets through one of these four distribution channels, offering
customers a wide range of financial services under their own, widely recognized,
brand names. The operating companies within ING Nederland have tailored their
products and services to meet the needs of their target markets and the
distribution

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channels they employ. For example, through the Direct Marketing channel ING
Nederland principally offers basic retail insurance products and home banking
services, while other channels are suitable for selling complex products and
providing a higher level of personal service and specialized advice. The degree
of personal service and specialized advice is one of the key attributes by which
ING Nederland allocates its products and services to the four distribution
channels.

Products

ING's insurance and banking products and services are provided to the Dutch
market through each of ING Nederland's four distribution channels. The following
is a summary of the primary insurance and banking products offered.

Insurance Products

Through ING's Dutch insurance subsidiaries, ING Nederland markets a broad
line of life and non-life products and is the largest group of insurance
companies in the Netherlands based on 1995 gross premiums written. ING Nederland
had total life gross premiums written of NLG 7,860 million in 1996 and NLG 7,458
million in 1995, representing 46% and 50%, respectively, of all gross life
premiums written by ING in such years. In the non-life sector, ING Nederland had
gross written premiums of NLG 2,845 million in 1996, and NLG 2,651 million in
1995 representing 38% and 38%, respectively, of all non-life gross premiums
written by ING in such years. In individual life insurance and group life
insurance, ING is the largest provider of life insurance in the Netherlands,
with market shares of 22.9% and 30.2%, respectively, in 1995, the last year for
which Dutch industry data is available. ING is the second largest provider of
non-life insurance in the Netherlands, with a market share of 10.0% in 1995, the
last year for which Dutch industry data is available.

The following sets forth ING Nederland's gross premium income by product
for the periods indicated.

INSURANCE GROSS PREMIUM INCOME

YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
------- ------ ------
(NLG MILLIONS)

Life(1)
Individual............................................. 4,843 4,494 3,565
Group.................................................. 2,904 2,767 2,727
------ ----- -----
Total Life.......................................... 7,747 7,261 6,292
Non-life(1)
Fire................................................... 765 750 749
Automobile............................................. 649 580 515
Accident and health.................................... 976 866 860
Other.................................................. 364 365 361
------ ----- -----
Total Non-life...................................... 2,754 2,561 2,485
------ ----- -----
Total.......................................... 10,501 9,822 8,777

- ---------------
(1) Excluding life reinsurance assumed of NLG 113 million, NLG 197 million and
NLG 20 million, and non-life reinsurance assumed of NLG 91 million, NLG 90
million and NLG 93 million in each of 1996, 1995 and 1994.

Life Products

ING Nederland's life insurance products consist of a broad range of
participating (with profit) and non-participating (without profit) policies
written for both individual and group customers. Participating policies share in
either the results of the issuing company or investment returns on specified
assets. In

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recent years, an increasing number of ING Nederlands' policies consist of
policies that participate in the investment return of a specified investment
fund, consistent with the trends in the Dutch market.

Individual. ING Nederland's individual products include a variety of
ENDOWMENT, term and WHOLE LIFE INSURANCE policies designed to meet specific
market needs. ING Nederland offers single and periodic premium policies used
primarily for the funding of individual retirement benefits. These policies are
often connected with tax incentives offered by Dutch law. Benefits under these
policies are payable typically at age 60 to 65 or on premature death. The single
premium endowment policies are mainly excess interest sharing, whereby interest
above a guaranteed minimum rate is returned to the policyholder as a premium
discount or rebate.

In the Netherlands, tax incentives favor the use of individual insurance as
a means of funding residential mortgages. ING Nederland's tax-advantaged
mortgage funding products include periodic premium endowment policies, as well
as policies which combine term insurance and savings features. Periodic premium
endowment policies are also marketed as savings products.

In 1966 ING Nederland introduced a predecessor to unit-linked insurance
policies, where premiums and sums assured are expressed in fractions which
represent participations in an equity investment fund. In 1990 unit-linked
insurance with several different investment funds was introduced. As with the
earlier policies, the policyholder bears the investment risk. Premiums,
expressed in guilders, are invested in investment funds chosen by the
policyholder and the return on the investments is reinvested in the fund on
behalf of the policyholder. An optional death benefit at specified levels is
offered as well. Policy terms allow the policyholder to switch periodically
among funds.

ING also administers a savings deposit life insurance plan under which the
participants surviving for a fixed period of time participate in the value of
the savings deposits and accrued interest at that time. An optional
supplementary death benefit is provided by a term insurance policy.

In addition to the products described above, ING Nederland's portfolio
includes a comparatively small amount of term, whole life and family income
plans. The following table sets forth ING Nederland's individual life insurance
premiums by type of policy for the periods indicated.

YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1995
--------------- ---------------
NLG % NLG %
------ ----- ------ -----
(NLG IN MILLIONS)

Company bears investment risk:
Periodic Premiums
Participating.............................. 1,887 39 1,819 40
Non-participating.......................... 448 9 183 4
Single Premiums
Participating.............................. 1,945 40 1,974 44
Non-participating.......................... 114 2 19 0
Policyholder bears investment risk:
Periodic Premiums............................. 312 7 429 10
Single Premiums............................... 137 3 70 2
----- ----- ----- -----
4,843 100.0% 4,494 100.0%
===== ===== ===== =====

Group. ING Nederland's group policies are designed to fund private pension
benefits offered by a wide range of businesses and institutions as a supplement
to government provided benefits. These benefits include sums assured, annuities,
disability benefits and widow's and orphan's benefits. For large groups,
customized policies are offered to meet the needs of individual employers. For
other groups, standardized policies providing specified benefit levels are
offered. ING Nederland currently offers four types of group policies. The first
type comprises non-participating contracts which have generally been in force
for a long time. The second type consists of contracts with interest-sharing
elements, whereby at

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year end the policyholder's return is calculated by assuming the related policy
investments were made in a hypothetical portfolio of government bonds. ING
Nederland also offers single premium contracts which take into account expected
future excess interest (over the policy valuation rate) in establishing the
single premiums. The expected future excess interest is calculated based on a
portfolio of Dutch government bonds and an assumed reinvestment return. Finally,
ING Nederland offers large group contracts with yearly premiums of over NLG 2
million. Interest sharing for such contracts is based on the return on a
segregated portfolio of investments, often chosen in consultation with the
client. These investments are managed separately from other investments and ING
receives a related management fee.

The following table sets forth ING Nederland's group life insurance
premiums by type of policy for the periods indicated.

YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1995
--------------- ---------------
NLG % NLG %
------ ----- ------ -----
(NLG IN MILLIONS)

Company bears investment risk:
Periodic premiums
Participating.............................. 950 33 1,119 40
Single premiums
Participating.............................. 686 24 460 17
Policyholder bears investment risk:
Periodic premiums............................. 798 27 794 29
Single premiums............................... 470 16 394 14
----- ----- ----- -----
2,904 100.0% 2,767 100.0%
===== ===== ===== =====

Non-life Products

The following describes the primary non-life insurance products offered by
ING Nederland in the Netherlands. Non-life insurance products issued by ING
companies in other countries are substantially similar to the products described
below.

Fire. ING Nederland's fire insurance policies provide coverage to both
individual and commercial insureds. Fire policies generally provide coverage for
a variety of losses, including fires, storms, burglary and other perils.
Individual coverage is provided on both a single-risk and multi-risk basis, with
multi-risk policies providing coverage for loss or damage to dwellings, damage
to personal goods, and liability to third parties. Commercial coverage is
provided to Dutch companies for buildings and facilities in the Netherlands, and
includes ordinary and commercial risks.

Automobile. The automobile policies provided by ING Nederland in the Dutch
market provide coverages to individual and commercial (fleet) insureds for third
party liability (including property damage and bodily injury), as well as
coverage for theft, fire and collision damage. Coverage for third party
liability is required by Dutch law to be maintained with respect to each
licensed motor vehicle. Other coverage, including collision and first party
medical, is optional. Dutch law does not require that insurance be maintained
for damage suffered by the policyholder, the driver of the vehicle or the
vehicle itself. Each of the various types of coverages provided by ING Nederland
is available with deductibles, which allows policyholders to reduce the cost of
coverage by selecting higher deductible amounts. Policies are generally written
for a minimum period of one year.

Automobile insurance premium levels are not subject to rate regulation in
the Netherlands, and other than the minimum coverages provided by Dutch law as
described above, there is no regulation of policy forms or coverage. In
addition, the terms and features offered by ING Nederland are generally similar
to those offered by its competitors in the Dutch market. As a result of these
factors, competition in the Dutch automobile insurance market is based almost
entirely on price, making the premium rates which

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ING Nederland is able to charge subject to pressure to the extent competitors
may seek to gain market share by reducing rates. ING Nederland establishes its
premium rates on the basis of its own historical data and pricing and
underwriting experience. Premium levels are determined according to numerous
variables, including factors related to the age and make of the insured vehicle
as well as age, driving record and other factors related to the policyholder. In
addition to premium levels, the results of ING Nederland's automobile business
are affected by the frequency and severity of loss events. In recent years ING
Nederland has initiated various loss-control measures, including an anti-theft
campaign.

Accident and Health. Accident and health insurance is provided by ING
Nederland on both an individual and group basis, and represents ING Nederland's
largest line of non-life business. The types of risks covered by ING Nederland's
accident and health policies include death by accident, and temporary and
permanent disability. In the Netherlands the government's role is decreasing in
the field of disability insurance and sick pay, creating new opportunities for
insurance companies to provide private-sector coverage for benefits previously
provided by the Dutch government.

Other Non-life. Other non-life insurance consists of transport and
aviation insurance and third party liability insurance.

Banking Products

ING Nederland provides a wide array of banking products and services to
individual and corporate customers in the Netherlands. Individual products
include consumer loans, mortgage loans, funds transfer, electronic banking,
personal financial services, credit and debit cards, and savings and other
deposit accounts. Products and services provided to corporate customers include
corporate loans, cash management, funds transfer and payment systems, foreign
exchange and leasing.

The following sets forth certain data with respect to the banking
operations of ING Nederland.

YEAR ENDED
DECEMBER 31,
--------------------
1996 1995
-------- --------
(NLG MILLIONS, EXCEPT
STATISTICAL DATA)

Mortgage loans................................................. 79,146 64,543
Customer deposits.............................................. 141,080 133,593

Number of domestic branches.................................... 414 424
Number of ATMs................................................. 1,500 1,135

ING Bank is the largest provider of payment transfer services in the Dutch
market, with a market share of 48% in 1995 based on transaction volume. ING is
the second largest provider of residential mortgage loans in the Dutch retail
market, with a market share of 23% based on total outstanding mortgage loans and
is the third largest provider of loans in the Dutch corporate market, with a
market share of 17.1% in 1995 based on total outstanding corporate loans in
guilders.

Distribution Channels

ING Nederland provides insurance or banking services to approximately 75%
of Dutch households. This extensive market reach is achieved through the use of
a variety of distribution channels, each of which provides particular products
to specific market segments.

Direct Marketing

General

At the time ING was formed in 1991, NMB Postbank Groep N.V. consisted of
NMB Bank N.V. and its wholly-owned subsidiary Postbank N.V. NMB Postbank Groep
N.V. was formed in 1989 when NMB Bank N.V. acquired all the shares of Postbank
N.V. ING Nederland's Postbank business unit principally utilizes the direct
marketing distribution channel to access its clients, without having to resort
to offices or

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intermediaries. Postbank reaches its 6.3 million private customers via home
banking, telephone, mailings and electronic banking and through post offices.

Using direct marketing methods, Postbank has utilized its position as a
leading provider of current account services and payments systems as the basis
for supplying other financial services, such as savings accounts, mortgage
loans, consumer loans, credit card services, insurance products and security
orders. As approximately 60% of Dutch households have a financial relationship
with Postbank and Postbank has a market share of approximately 43% in Dutch
payments transfer, based on transaction volume, ING believes that Postbank's
large client database and market presence provide it with significant
opportunities for marketing such additional financial products and services.

Postbank's activities include Postbank payments systems, Postbank Retail
Banking, PTT-post offices, a joint venture with PTT Post, Postbank Insurance and
Chipper, a joint venture with PTT Telecom for the development of multifunctional
stored-value cards. (See "-- Stored-value cards: Chipper".) PTT Post and PTT
Telecom are subsidiaries of Koninklijke PTT Nederland N.V. ("KPN").

Postbank Payments Systems. For over a hundred years, Postbank has had a
leading position in the Dutch payments transfer system. Through its own Postal
Giro System, a nationwide system of current accounts used by approximately 60%
of Dutch households, Postbank allows a client to transfer an amount of money
directly to another member of the system. In addition to the Postal Giro System,
Postbank's payments services include national and international payments
services such as Postbank payment cards, Postbank transfer systems, Postbank
ATMs (Giromaten) and Postbank payment checks. Postbank's large, centrally
computerized customer database and direct marketing system has enabled Postbank
to develop its own market strategies for payments and other services, including
the Chipper electronic stored-value card described below.

The payment transfer systems and services of Postbank and of ING Bank are
managed by the Postbank Payments Systems department of Postbank, through which
approximately 900 million financial transactions per year, or 48% of all
payments transfers in the Netherlands, are carried out. The experience and
technology expertise developed by Postbank Payment Systems have been utilized by
ING in other areas of its business, such as direct bank marketing and the
automation of financial transaction processing.

In addition to the Postal Giro System, other Dutch banks, including ING
Bank, have developed a common bank payments system of which all Dutch banks are
members, whereby all individual members' payments systems are linked to a
central system, known as "Bank GiroCentrale". Payments services are indirectly
connected to the computers of the individual banks. At the request of the Dutch
Central Bank there has been a great deal of cooperation between these two
systems, which are linked by what is called the National Payments Circuit, but
which at the same time maintain their individual characteristics. Postbank also
operates a separate electronic banking service named Girotel for its personal
and corporate customers, which is currently offered in combination with Internet
services. Postbank was the first bank in the Netherlands to introduce such a
system for personal customers. The number of private Girotel subscribers
increased by 90,000 in 1996, bringing the total (including corporate users) to
250,000.

Postbank Retail Banking. Through Postbank Retail Banking, ING Nederland
provides direct marketing of bank products to the Dutch retail market. Drawing
on its position as the leader in the Dutch payments transfer market, Postbank's
strategy is to develop a full relationship with its customers by offering an
integrated package of retail banking and other financial products and services.
At the end of 1996, the Postbank Retail Banking Division had NLG 37.5 billion in
savings accounts, NLG 24.5 billion in residential mortgage loans outstanding,
NLG 15 billion in payment account balances, NLG 4.5 billion in investment funds,
and NLG 3 billion in outstanding consumer credits. Indicative of the commercial
image of Postbank is the unique and consistently maintained label and
distribution strategy: "Postbank as Home Bank".

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PTT-post offices. The PTT-post offices are additional outlets for
Postbank's home banking concept. To this end, Postkantoren B.V. was formed as a
50/50 joint venture between Postbank and PTT Post. With more than 2,300 offices
nationwide and 5,250 employees, Postkantoren B.V. operates the largest
distribution network in the Netherlands for postal and financial services, based
on number of outlets. The joint venture's products include payments transfer and
financial services for Postbank and postal services for PTT Post. Postbank has
the exclusive right to sell banking and insurance products through the PTT-post
offices. In addition, the PTT-post offices provide services to non-retail
customers, including the Government Department for Road Traffic, the Tax
Department, the National Lottery, the Manpower temporary agency, NBBS Travel
agency and others.

Postbank Insurance. Postbank Insurance provides direct marketing of
insurance products for ING Nederland. Postbank Insurance offers both life and
non-life insurance products, primarily to the Dutch retail market. In 1996 and
1995 its life premium income was NLG 359 million and NLG 326 million,
respectively.

Stored-value cards: Chipper. In 1996, a joint venture was formed between
Postbank and PTT Telecom to create a new technology known as the "Chipper". The
Chipper is a multifunctional stored-value card in which virtual money and other
data can be stored, and which can be used for cash payments, loyalty programs
and other purposes. In May 1997, Postbank began distributing payment cards with
"Chipper" technology to all clients. Postbank expects to have issued
approximately 4 million "Chippers" by the end of 1997 and to have distributed
"Chippers" to all current accountholders by the end of 1998.

Independent Intermediaries

ING Nederland also offers financial services to Dutch customers through
several thousand independent intermediaries. Independent intermediaries are
individuals or companies which represent a number of insurance companies in a
sales and service capacity as third party contractors. In this respect, ING
competes with other companies which provide financial products and services
through independent intermediaries. Independent intermediaries are paid on a
commission basis and are not employees of the companies they represent. The
independent intermediaries sell mainly life and non-life insurance products, but
also offer mortgages, personal loans and savings products. The independent
intermediary channel is utilized by a number of ING Nederland's business units,
including Nationale-Nederlanden, InterAdvies, Tiel Utrecht Verzekeringen ("Tiel
Utrecht") and Nationale Borg-Maatschappij ("Nationale Borg").

Nationale-Nederlanden. Through Nationale-Nederlanden ("NN"), ING Nederland
utilizes the independent intermediary channel to offer a wide range of products
and services in the field of life, pension, health and disability insurance,
mortgage loans, and savings and investment products. For more than 150 years, NN
has utilized the independent intermediary channel to sell its products. The NN
companies comprise Nationale-Nederlanden Leven ("NN Life"),
Nationale-Nederlanden Schade ("NN General") and Nationale-Nederlanden Zorg ("NN
Health Care"). All of the NN operating companies are managed jointly by a
general management team. In 1996 NN Life had premium income of NLG 6.5 billion,
and including investment income, its total income surpassed the NLG 12 billion
mark for the first time.

ING believes that market tendencies in the Netherlands are such that
certain clients increasingly seek specialized advice. The independent
intermediaries have accordingly become more specialized and professional, and as
the market has become more segmented, NN has provided more support for a focused
marketing approach by its intermediaries. These developments are reflected in
the changes which have taken place within both NN Life and NN General/Health
Care, as these companies have changed from product-centered organizations to
market-oriented organizations. In addition, the use of information technology
has become an essential element of NN's relationship with the independent
intermediaries, providing greater efficiencies in the areas of policy issuance
and administration, and the

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NN companies are increasingly taking a joint approach to the development of new
systems and commercial software.

NN's product development is concentrated on the life cycle of the customer.
In the individual market, there is rising demand for flexible products which
meet customers' varying needs in different phases of their lives. The reduction
of certain social security provisions by the Dutch Government has also created
new product demands in both the individual and group markets.

In the group market, as the Dutch government partly withdraws from the
social security field, a new market is being created for plans previously
covered by traditional "employee benefits". ING believes that NN's relationships
in the Dutch corporate market, the wide range of its activities and its high
degree of knowledge and experience, provide it with good opportunities in this
new market. To respond to this "employee benefits" market, NN in recent years
has developed a number of new products, including the Personnel Security Plan
(Personeels Zekerheids Plan). As part of the Personnel Security Plan concept, NN
has also developed new, flexible early retirement products for small and
medium-sized companies, reflecting changes in tax treatment and increasing
flexibility of pensions.

The Personnel Security Plan provides a package of products and services to
employers which make a wide range of products and services, including disability
pensions, medical and life insurance products, available to employees. Through
the Personnel Security Plan, NN also offers services to the employer. These
services are designed to enable the employer to limit the costs related to
employee illnesses, and include a help-desk which employers can utilize in case
of sick employees. Because NN has contacts within the field of healthcare, it
can select a source for medical treatment where the waiting period for treatment
is kept to a minimum. A customized advisory program for the employer is another
service which NN offers, in close cooperation with the independent
intermediaries. The Personnel Security Plan also provides clients with
convenience through a user-friendly automation system.

Through NN Life, NN also sells and administers a broad range of life
insurance and pension products and other financial and support services for both
the group and individual markets. In addition to life and pension products, NN
offers insurance products and services in the areas of medical expenses,
disability, accident insurance, and related areas through NN General and NN
Health Care. In 1996 the premium income written by NN General and Health Care
reached a record level, exceeding NLG 2.2 billion.

NN General also offers a broad range of non-life insurance products to
middle and upper income individuals and to small and medium-sized companies,
while NN Health Care offers medical expense insurance through NN as well as for
other ING subsidiaries such as RVS Insurances and Tiel Utrecht.

InterAdvies. InterAdvies offers banking products and combinations of
insurance and banking products through the independent intermediary channel. The
banking products are mostly simple savings and lending products, where
competition is mainly based on price. Since margins in the Dutch market are
declining as a result of heavy competition, InterAdvies has opted for a strategy
which focuses more on selling advice-sensitive, value-added products.

InterAdvies operates through three commercial marketing units: NN
Financiele Diensten, NVB/VOLA and Regio Bank. Each of these is responsible for
product development, marketing, sales and underwriting of the products sold
under its label, with product and client-based administration for all marketing
units being centrally managed. InterAdvies' different marketing units provide a
broad range of consumer credit, banking and bancassurance products to the retail
market. At December 31, 1996 InterAdvies had NLG 6.1 billion in savings
deposits, NLG 2.8 billion in outstanding mortgages and NLG 1.9 billion in
outstanding commercial loans.

In addition to NN and InterAdvies, ING Nederland's independent intermediary
channel is utilized by Tiel Utrecht Verzekeringen, which primarily sells
unit-linked individual life insurance, and by Nationale Borg, a specialized
provider of fidelity and surety products. In 1996, Tiel Utrecht and Nationale
Borg had premium income of NLG 483 million and NLG 55 million, respectively.

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Branches

ING Nederland's branch distribution channel utilizes the branch networks of
ING Bank Nederland, Westland/Utrecht Hypotheekbank, the Crediet en Effecten Bank
and ING Lease Holding, each of which targets a separate client and product base.

ING Bank Nederland. ING Bank Nederland ("IBN"), which conducts its
business through 390 branch offices in the Netherlands, offers a complete
package of financial services to large, medium and small-sized companies and
institutions, as well as self-employed and other individuals. IBN primarily
targets customers who require personal advice and service. IBN has a staff of
8,500. In an effort to establish closer relationships with its clients, IBN's
commercial activities are divided into six customer groups: corporate banking,
private banking, SME-market (small and medium-sized enterprises), large
enterprises, personal market and payment transfer. IBN provides a full range of
commercial banking activities and life and non-life insurance products. The
total portfolio of loans amounted to NLG 85 billion, NLG 32 billion of which
represented the residential mortgage portfolio. IBN's market share in
residential mortgage loans provided by banks continued to advance from
approximately 11% in 1995 to over 11.5% in 1996.

IBN's strategy is to further develop and implement the concept of fully
integrated financial services, drawing upon the knowledge and know-how developed
in the rest of ING. For example, since 1995, IBN has utilized the products,
systems and expertise of NN in providing bancassurance. The IBN bancassurance
formula allows IBN's branches to render integrated financial services by
delivering both bank and insurance products to the same client. As part of this
effort, IBN branch staff have been reinforced with specialists in the life and
non-life insurance fields. In addition, in conjunction with NN, IBN has
developed a range of insurance products for the corporate market, including
employee benefits products. Management believes that the IBN bancassurance
formula creates added value for ING by reducing unit costs, since insurance is
sold through the existing branch network and since the cross-selling of multiple
products to existing clients generates more income than acquiring new clients.

The reorganization of ING's corporate banking activities in connection with
the establishment of ING's four management centres has enhanced IBN's commercial
effectiveness in the upper segment of the corporate market. An important factor
here is the synergy which can be generated by combining the expertise of
different business units within ING. IBN is cooperating successfully with NN,
ING Barings and ING Investment Management in developing custom-made solutions
for a number of large and complex financing projects on behalf of clients. To
provide further support for the IBN branch network in corporate lending
activities, the head office departments specializing in the various sectors of
industry are being strengthened. Contacts with IBN's large corporate customers
are being supported by a specialized corporate banking department within IBN.
There is also increasing emphasis on bancassurance services.

Despite strong competition in the funds transfer market, IBN (including
Postbank Corporate Funds Transfer) has succeeded in advancing its position in
corporate funds transfer. Further efficiency gains were made and advantage was
taken of the synergy between Postbank and IBN, and new products and services
were developed which were well received by the market. IBN is participating in
the chipcard project of Interpay (a jointly owned service provider from Dutch
commercial banks) named the "Chipknip".

In March 1995, a 28.8% interest was acquired in Bank Mendes Gans, which was
recently increased to 59%. This company specializes in high-quality funds
transfer services for multinationals.

Private banking operations expanded substantially in 1996. As the
government withdraws from social security provision and the number of high net
worth individuals in the Netherlands increases -- as a result of transfers of
company ownership among other reasons -- the demand for tax-efficient capital
accumulation products is growing. Matters such as management succession,
individually tailored pension plans and the setting up of professional practices
require more personal and specialized advice and custom-made products and
services. By creating private banking teams to specifically address the

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growing market represented by high net worth individuals, IBN is able to focus
its services more effectively on this customer group.

Other Banking Units. The other banking units in the ING Nederland branch
distribution channel are Westland/Utrecht Hypotheekbank N.V. and Crediet en
Effectenbank N.V. Westland/Utrecht Hypotheekbank N.V. is engaged in medium and
long-term lending. Its two main activities are corporate and personal mortgage
lending. In 1996, the loan portfolio of Westland/Utrecht Hypotheekbank N.V.
amounted to NLG 13 billion, equally distributed between corporate and private
clients. Crediet en Effectenbank N.V. is one of the smaller banks in the
Netherlands and is focused on complete financial planning for wealthy
individuals and on financing the medical sector. In 1996, the total assets of
Crediet en Effectenbank N.V. amounted to over NLG 4 billion.

ING Lease. ING Lease Holding ("ING Lease") is the holding company of both
general and asset specialized leasing companies in the Netherlands and abroad.
Today the consolidated portfolio exceeds NLG 10 billion, placing ING Lease among
the ten largest European leasing companies. ING Lease has more than 40
subsidiary companies in ten European countries and representative offices in
Singapore and New York. ING Lease opened a representative office in Poland in
1996 and plans to open representative offices in the Czech Republic and Hungary
in 1997. More than 70% of new business written by ING Lease originates outside
the Netherlands. The principal components of ING Lease's strategy are
diversification of assets, expansion in Europe and specialization in asset
management, with an emphasis on products with a high value added such as vendor
leasing, international equipment finance and full service operating leases.

The asset-specialized subsidiaries of ING Lease concentrate on full service
leasing of cars, vans, trucks and agricultural equipment. The lease products
related to this type of asset management are usually sold through these
subsidiaries' own European network. CW Lease, one of the leading players in both
the Dutch and European car leasing markets, manages a fleet of 43,000 cars.
Subsidiaries in Belgium, Luxembourg, England, Germany and France belong to the
European chain of CW Lease companies. The number of trucks managed by Runoto,
via subsidiaries in the Netherlands, Germany and Belgium, amounts to 6,700.

Tied Agents

RVS Insurances (RVS Verzekeringen) ("RVS"). Several member companies of
ING, including RVS, make use of tied agents. A tied agent works exclusively for
one insurance company. This can take several forms. In the case of RVS, tied
agents are employees, and unlike independent intermediaries receive a fixed
salary plus a commission on the business produced. Independent intermediaries
work on commission basis only. RVS markets itself as a family insurer and offers
a unique combination of advice through its tied sales organization and
competitive products using modern direct marketing techniques. In the
Netherlands, RVS is the largest insurance company with a direct sales
organization. With a nationwide network of more than 1,100 agents, RVS supplies
service and advice to almost 1 million private customers. Despite competition in
the Dutch individual insurance market, RVS's premium income rose by 4.5% in 1996
to approximately NLG 1.1 billion. All RVS agents have been equipped with
advanced laptop computers which cover the entire product range and provide all
the information needed to advise their customers. With these innovations, RVS
has significantly enhanced its competitiveness in the Dutch individual market.

RVS has recently changed its organizational structure from a
product-oriented focus to a more customer-oriented focus. In early 1997, for
example, RVS was the first financial services provider in the Netherlands to
introduce a special package of services for senior citizens. This package
includes a number of financial products and care services. The basic package was
initially offered to 40,000 RVS customers in the 50+ age bracket, and was
subsequently offered to customers by other affiliated companies.

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ING FINANCIAL SERVICES INTERNATIONAL

General

ING Financial Services International ("FSI") comprises ING's international
insurance and retail banking operations located in 27 countries outside the
Netherlands, including the representative offices in China and Brazil. The
management of FSI's insurance operations is shared by three regional offices for
the respective geographic regions of Europe & South America, North America and
Asia & Australia, while its banking operations are managed centrally from the
Netherlands. FSI's extensive distribution networks are used as a channel to
facilitate selling a wide range of financial services to individual consumers
and small and medium-sized enterprises. FSI strives to offer integrated
financial services in markets where such integration provides added value to its
customers. In this respect FSI makes use of the expertise ING has gained with
integrated financial services in the Netherlands. The provision of integrated
financial services by FSI takes various forms in different countries, in each
case within the limits of local legislation and regulations for the banking,
insurance and investment businesses. As part of ING's integrated financial
services approach, FSI has in recent years acquired interests in retail banking
operations in Hungary, Italy and Poland as well as insurance and mutual fund
management businesses in Australia, Canada and the United States.

[ING FINANCIAL SERVICES INTERNATIONAL CHART]

- ---------------
* Representative offices only.

Since the 1970s, ING's strategy for its international insurance operations,
which have now been consolidated under FSI, has been to expand using three
approaches. The first approach has been to acquire well-respected local
companies, allowing them to retain a high degree of autonomy in determin-

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ing how to serve their markets. ING FSI has pursued this route to
internationalization in Australia, Belgium, Canada and the United States.

The second expansion route has been through the establishment of greenfield
life insurance companies, primarily in emerging markets, selling products
through tied agents. In countries where FSI has started greenfield operations,
the initial focus has been on one line of business, generally life insurance.
Once the operation has reached a more advanced stage, the introduction of
additional distribution channels and complementary products is considered. ING
FSI began building up greenfield businesses in Spain and Greece in the 1980s.
Since then, ING FSI has become the first European insurer to be granted licenses
to commence life insurance operations in Japan, South Korea, and Taiwan. ING FSI
was also one of the first Western companies to venture into the life insurance
markets in the Czech Republic, Hungary and Poland. In 1996, FSI started new life
operations in Argentina, Mexico and the Slovak Republic. FSI received licenses
for life operations in the Philippines and Romania in 1996 and 1997,
respectively, and expects to commence operations in these markets in 1997. FSI
intends to continue establishing greenfield operations in suitable countries in
the years ahead.

The third expansion route has been through the organic growth in ING's
existing markets. This approach allows FSI to leverage its market knowledge and
presence and to broaden its product and distribution capabilities in existing
markets. In the United States, such "goldfield" businesses have been established
in life reinsurance, institutional markets (such as GICs) and the stop-loss
business. In Ontario, Canada, a direct response non-life insurance operation has
been established, and in Australia a "goldfield" bank has been set up.

FSI Insurance

The following sets forth certain summary financial data for FSI's insurance
operations by geographic region for the periods indicated.

YEAR ENDED DECEMBER 31,
----------------------------
1996 1995 1994
------ ------ ------
(NLG MILLIONS)

Europe & South America(1)
Gross premiums written.............................. 2,337 2,049 1,764
Results before taxation............................. 184 85 62
North America
Gross premiums written.............................. 7,664 6,644 6,740
Results before taxation............................. 491 490 367
Asia & Australia
Gross premiums written.............................. 3,581 2,660 2,940
Results before taxation............................. 184 122 199
Total gross premiums written................ 13,582 11,353 11,444
Total results before taxation............... 859 697 628

- ---------------
(1) Excluding the Netherlands.

Europe & South America

FSI's insurance business in Europe (outside the Netherlands) is mainly made
up of mature business units in Western Europe and greenfields in Central and
Eastern Europe. In South America, FSI has mature business units in the
Netherlands Antilles and Aruba and is starting up a greenfield in Argentina.
Opportunities for setting up life operations in other countries in South America
are currently being studied. A representative office was established in Brazil
in 1996.

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The total premium income of FSI Europe & South America was NLG 2,337
million in 1996, comprised of NLG 1,800 million from life insurance and NLG 537
million from non-life insurance. The region's overall result before the effects
of taxation amounted to NLG 184 million in 1996.

The insurance products sold by FSI in Europe & South America vary depending
on the nature of the local operations and markets in a particular country. In
mature markets such as Belgium, a broad array of individual and group life and
individual and commercial non-life products are offered which are generally
similar to those offered by ING Nederland in the Dutch market. See
"-- Management Centres -- ING Nederland -- Products -- Insurance Products".
Through insurance greenfield operations, however, FSI generally offers a more
limited range of products, oriented primarily towards individual life insurance,
with particular terms and conditions dictated by local market conditions and
regulations. The following table sets forth the breakdown of FSI's life and
non-life premiums in Europe & South America for the years indicated.

YEAR ENDED
DECEMBER 31,
---------------
1996 1995
----- -----
(NLG MILLIONS)

Europe(1)
Life premiums
Individual................................................... 1,576 1,350
Group........................................................ 172 140
------ ------
Total........................................................ 1,748 1,490
Non-life premiums............................................... 450 426
South America
Life premiums
Individual................................................... 24 22
Group........................................................ 28 32
------ ------
Total........................................................ 52 54
Non-life premiums............................................... 87 79
------ ------
Total................................................... 2,337 2,049
====== ======

- ---------------
(1) Excluding the Netherlands.

Europe

Belgium. FSI serves the Belgian insurance market through two companies, De
Vaderlandsche and RVS Belgium, which sell individual, pension and group life
products and non-life products similar to products in the Dutch market. In
Belgium, FSI distributes insurance products through independent brokers as well
as through company sales agents. Investment-type life insurance and single
premium products are sold through a subsidiary established in 1994 in Luxembourg
which realized premium income from single-premium contracts of NLG 191 million
in 1996. ING's market share in 1996 was 3.7% in the Belgian life insurance
market and 3.8% in the non-life insurance market based on premiums written.
Total premium income was NLG 1,026 million in 1996 (including Luxembourg).

Czech Republic. In May 1992 Nationale-Nederlanden became the first foreign
company to obtain a license to operate in the Czech Republic insurance market,
and through NN Czech began selling a range of standard individual life insurance
products, including endowment, whole life and term products. In cooperation with
the largest Czech employers' association (the Association of Industry and Trade)
and an Austrian investment company (EPIC), a private pension fund was
established, which began operations in March 1995 and in which ING now holds a
100% interest.

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In 1996, NN Czech recorded premium growth of 59% in local currency. Gross
premiums written in 1996 were NLG 128 million. NN Czech's share of the Czech
individual life insurance market was approximately 19% in 1996.

Greece. FSI is represented in the Greek life and non-life insurance
markets by NN Greece. NN Greece mainly sells individual life insurance and
hospitalization riders, group life insurance and non-life insurance. Total
premium income in 1996 was NLG 277 million. The life portfolio represented a
market share of about 14%, making NN Greece the second largest life company in
the country. The non-life operation writes a modest book of fire and automobile
insurance. Funds under management for third parties by NN Greece rose to NLG 635
million in 1996 from NLG 356 million in 1995.

Hungary. In September 1991 NN Hungary started selling individual life
insurance. NN Hungary has a network of 30 sales offices throughout the country
and a sales force of some 2,300 agents. The acquisition of the principal assets
and liabilities of Dunabank by ING Bank in February 1996 will contribute to the
development of an integrated financial services business in Hungary. In 1996 NN
Hungary continued to grow, with gross premiums increasing to NLG 196 million
from NLG 161 million in 1995. The growth was partially attributable to life
insurance premiums having become partially tax-deductible as from 1995. With a
1996 market share of approximately 36% in terms of premium income, NN Hungary is
the largest provider of individual life insurance in Hungary, including whole
life and term products. In July 1996, NN Hungary launched a mutual fund to
provide alternative investment opportunities for private pension monies
following the privatization of the Hungarian pension system.

Italy. In connection with the acquisition of Sviluppo Finanziaria, ING
Insurance applied for a license to open a branch office for the purpose of
selling life insurance in Italy in 1992. Early in 1993, ING Insurance received
such a license and NN Italy started as a greenfield operation in April 1993.
Individual life and pension products are sold through ING Sviluppo's network of
professional financial advisers. NN Italy's gross premium income was NLG 110
million in 1996.

Poland. NN Poland started selling individual life insurance products in
January 1995. An investment-linked insurance product was successfully introduced
in the autumn of 1995, which was followed by group insurance products in 1996.
The products are mainly sold through tied agents and partly through the branch
offices of Bank Slaski (in which ING has a majority interest). Gross premiums
written in 1996 were NLG 35 million. Based on new business, NN Poland is already
among the five largest individual life insurance companies in the country.

Romania. In early 1997, ING received a life insurance license in Romania,
and expects to commence greenfield insurance operations during 1997.

Slovak Republic. NN Slovakia began selling insurance products in July
1996. Initially, the company will focus on individual life policies, which
products are being sold through a network of tied agents. NN Slovakia intends to
start selling an investment-linked insurance product in 1997.

Spain. In 1978 NN Spain started as a life insurance greenfield. The
products NN Spain sells include individual life insurance and term products. NN
Spain's life-related premium income continued to grow in 1996, with NLG 404
million in written premiums, an increase of NLG 74 million from NLG 330 million
in premiums in 1995. NN Spain is among the top five insurers in the individual
market in terms of premium income. Non-life premiums written in 1996 were NLG 21
million. NN Spain's products are marketed through a sales force of approximately
5,500 agents.

South America

Argentina. In 1995 ING bought a license to establish a life insurance
operation in Argentina, which started operations in November 1996. ING Insurance
Argentina is FSI's first greenfield operation in South America. The company is
selling individual life insurance products, including universal life and term
products to middle and higher income earners.

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Netherlands Antilles and Aruba. ING Fatum is headquartered in Curacao,
with sales offices in Aruba, St Maarten and Bonaire. In Curacao, where ING
Insurance has been active through general agents since 1904, a non-life branch
was established in 1938, followed by an office in Aruba in 1948. A complete
range of individual and group life and non-life products is offered, modeled
after Dutch products. ING Fatum offers individual as well as group life
insurance. Total premium income in 1996 was NLG 139 million. ING Fatum had a
market share of approximately 40% for both life and non-life in 1996.

North America

FSI North America is a multi-distribution network of insurance companies
throughout the United States, Canada and Mexico. FSI's insurance business in
North America is made up of mature business units in the United States and
Canada and a life insurance greenfield in Mexico which started operations in
January 1996.

Products

Total premium income reported by FSI North America was NLG 7,664 million in
1996, comprised of NLG 4,586 million from life insurance and NLG 3,078 million
from non-life insurance. The region's overall result before taxation was NLG 491
million, representing 57% of FSI's total result from insurance operations before
the effects of taxation.

FSI provides a wide range of life and non-life products in the United
States and Canada. The following table sets forth premium income for FSI's
United States and Canadian operations by product for the years indicated.

YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
----- -----
(NLG MILLIONS)

Life products:
Traditional life.................................................... 673 623
Interest sensitive.................................................. 1,365 1,334
Annuities........................................................... 172 132
GICs................................................................ 1,759 1,405
Other............................................................... 617 304
----- -----
Total life....................................................... 4,586 3,798
Non-life products:
Automobile.......................................................... 1,299 1,180
Personal property................................................... 512 465
Commercial.......................................................... 558 559
Workers' compensation............................................... 219 220
Medical stop-loss................................................... 205 166
Health.............................................................. 129 131
Other............................................................... 156 125
----- -----
Total non-life................................................... 3,078 2,846
----- -----
Total....................................................... 7,664 6,644
===== =====

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The following is a description of the primary life and non-life products
offered by FSI in North America.

Life

Traditional Life. Traditional life insurance policies generally consist of
whole life and term life. Whole life policies are permanent policies that
provide insurance over the insured's entire life and the face amount of the
policy is paid only upon death of the insured. Some whole life policies provide
for a CASH SURRENDER VALUE to be paid upon early termination of the policy. Term
policies are temporary and provide insurance over a specified period of time.

Interest-Sensitive Life. Interest-sensitive products consist primarily of
UNIVERSAL LIFE type policies, which provide both life insurance protection and a
savings component. Premiums paid by the policyholder are credited to the
contract value from which periodic charges for mortality and administrative
expenses are deducted. Interest is credited to the policy owner on the amount of
the contract value after the various charges have been deducted. The interest
rate is periodically determined by the company. The insured frequently may
change the face amount and premium amount during the life of the policy as
needed.

Annuities. An annuity contract is an arrangement whereby an annuitant is
guaranteed to receive a series of stipulated amounts commencing either
immediately or at some future date and includes both fixed and VARIABLE
PRODUCTS.

Guaranteed Investment Contracts (GICs). GICs are generally purchased by
large pension funds and provide a guaranteed rate of return over the life of the
contract with the insurance company accepting the spread risk. The GIC provider
(ING) guarantees that if participants withdraw their money from the plan, the
provider will pay to the plan the book value of the account, regardless of the
market value of the underlying assets.

Other. Other products include variable life, which is similar to
traditional whole life, separate account contracts, and group life insurance.
The separate account assets are segregated from other investments of the
insurance company, and they operate much like mutual funds. The contracts have a
deferral phase in which the assets (units) earn a return. At the end of the
deferral phase the contract holder selects a method of payout.

Non-Life

Automobile. Personal auto insurance covers individuals against financial
loss because of legal liability for automobile related injuries (bodily injury
and medical payments) or damage to the property of others caused by accidents
arising out of ownership, maintenance or use of an automobile. Commercial auto
insurance is generally the same as personal auto, but coverage is for a fleet of
automobiles for businesses or other organizations.

Personal Property. Homeowner's policies are typically the largest type of
insurance in this category, which cover perils such as fire, theft of personal
items, storm related losses, and additional living expenses.

Commercial. Generally, these types of policies do for commercial risks
what the homeowner's policy does for the individual, but with more emphasis on
liability to others.

Workers' Compensation. Workers' compensation policies cover businesses for
job related injuries to or disability or death of their employees, without
regard to fault.

Medical Stop-Loss. This type of coverage serves companies that self insure
up to a maximum (stop-loss) per employee.

Health. Generally, health insurance provides for protection against the
loss of income through partial or total disability and reimbursement of hospital
and other medical expenses.

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Other. Other non-life products include surety bonds, coverage for goods in
transit and product liability coverages.

United States

ING has a long history in the United States, and is committed to further
strengthening its existing operations in the United States and optimizing their
performance. In 1996, premium income from life insurance amounted to NLG 3,952
million and from non-life insurance amounted to NLG 1,606 million. To enhance
ING's position in the United States, potential acquisitions are being studied to
reinforce its position in the traditional life insurance, annuity, and
investment-linked (including variable life) markets.

FSI's market share was 1% of the United States life insurance market and
0.3% of the non-life market in 1995 based on premiums written. The United States
life and non-life markets, though consolidating, remain highly fragmented and
subject to intense competition as clients move towards investment, savings, and
pure risk products. Although banking and insurance operations are still in many
areas segregated by law, increasing bank participation in the insurance market
threatens to intensify competition. ING recognizes the increasing competitive
pressures as this marketplace consolidates and new investment product lines are
introduced. Therefore, ING's businesses are focusing on improving operating
fundamentals, in order to consolidate ING's position as a prominent and low-cost
producer in traditional insurance products. FSI's units are also strengthening
their ties with their distribution channels by offering a broader product line
(either provided by ING or provided by strategic business partners) in estate
preservation, retirement planning, and asset and income protection.

Life operations. The United States life operations market a wide variety
of individual life and annuity, group life, medical stop-loss insurance, GICs,
and life reinsurance products. FSI's life insurance corporate entities in the
United States include Columbine Life (incorporated in 1980), First ING Life of
New York (acquired in 1992), Life of Georgia (acquired in 1979), Midwestern
United (acquired in 1976), Security Life of Denver (acquired in 1977) and
Southland Life (acquired in 1989). The strategic business units are:

LIFE OF GEORGIA operates exclusively in the home service market and
has a full-time agency field organization numbering approximately 1,050.
The home service market generally includes lower to middle-income customers
with relatively simple insurance needs and who require relatively low
amounts of coverage. In the home service market, the agent typically
presents proposed insurance products in the prospect's home and would
likely visit again in addressing future needs such as death benefits or
policy loans, and may also collect premiums at a client's home. Generally,
the home service market is mature and is not growing. While it has
traditionally sold whole life products to the lower income market, Life of
Georgia has gradually moved toward the middle-income market with a more
diversified product range.

SECURITY LIFE INDIVIDUAL INSURANCE markets a broad range of life
insurance products through some 2,200 Personal Producing GENERAL AGENTS
("PPGAs"). PPGAs are INDEPENDENT AGENTS whose primary responsibility is
production, but who may contract sub-producers. Their primary source of
income is from commissions on personally produced business and to a much
lesser extent, override commissions on the business of sub-producers
(full-time agents or brokers working under the PPGAs). PPGAs work through
regional officers/directors of agencies and managing general agents.
Security Life of Denver, which is licensed to operate in 49 states, targets
professionals, affluent individuals and corporate and small business
customers. In 1994 this business unit began to sell variable life and
annuity products.

THE SOUTHLAND GROUP consists of a general agency group and a stop-loss
group. The general agency group distributes life insurance through 100
managing general agents and provides access to a field force of 5,000
independent agents. The general agency group has a strong presence in the
very competitive universal life segment and is licensed to operate in 47
states. The general agency

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group focuses on the upper middle-income bracket and caters to the
insurance needs of individuals and small business owners.

The stop-loss group is the fourth largest stop-loss underwriter in the
excess medical risk protection market. The core customers of the stop-loss
group are employers with self-insured medical plans. Its strength has been
its ability to profitably adapt to meet the needs of the changing United
States health care environment and build a distribution network.

SECURITY LIFE REINSURANCE is the professional life reinsurance arm of
ING in the United States and is the fourth largest life reinsurer in the
United States, based on 1995 sales. Its primary focus is assisting its
clients in total life insurance risk management; its primary activity is
individual life reinsurance, offered to insurance companies throughout the
United States. Security Life Reinsurance's focus has been to strengthen its
domestic reinsurance position and broaden its product line to new risk
transfer products, risk management services and structured finance.

ING INSTITUTIONAL MARKETS offers GICs and GIC alternatives to defined
contribution programs and other institutional buyers through Life of
Georgia, Security Life of Denver, and Southland Life. GICs offered by ING
Institutional Markets consist primarily of traditional products, which
guarantee a fixed rate of interest and a return of principal to the
contractholder. ING invests the cash received from the contractholder and
recognizes as net income the difference between the earnings on the assets
and the interest credited to the contractholder.

ING Institutional Markets also provides alternative GIC products
consisting of synthetic and separate account GICs, on a small but growing
scale. The contract holder selects an investment advisor to manage the
investments related to the GICs. Prior to the sale of the GICs, ING reviews
both the investment advisor and the investment guidelines. For both the
synthetic and separate account GICs, ING earns a fee for providing
book-value withdrawals to plan participants. All investment income, gains
and losses are recognized by the contractholder, and the asset default,
prepayment, reinvestment and interest rate risks all reside with the
contractholder. Withdrawals can result in a gain or loss for ING. The
majority of ING's GIC contracts are participating contracts under which
gains and losses resulting from withdrawals are passed through to the
contractholders via the book value accretion rate. Because a minimum
interest rate of 0% is guaranteed, ING is exposed to risk only when
withdrawals result in significant loss.

Non-life operations. The non-life insurance operations of FSI in the
United States are organized under The Netherlands Insurance Companies ("TNIC").
TNIC is a corporate family of regionally-focused independent companies writing
conventional non-life lines of business with an emphasis on account-based
personal lines and small to medium-sized traditional commercial risks through a
network of 1,450 independent property and casualty agents and 450 fidelity and
surety agents. TNIC had NLG 1,284 million in gross written premiums in 1996.

TNIC's principal member companies include Indiana Insurance, The
Netherlands Insurance and Peerless Insurance. The above noted insurance products
are marketed by these companies. Although sharing core support services, each
company focuses on a defined geographic area. The core operating territories are
located within 15 Eastern and Midwestern states.

Canada

ING has been present in Canada since 1956, when it acquired Commercial Life
Assurance, now integrated into NN Financial. In 1959, ING acquired Halifax
Insurance, Canada's oldest insurance company. In the Canadian market, ING's
strategic emphasis is on developing and enhancing the performance of existing
business units.

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The strategic priorities for FSI's Canadian operations are addressing the
following three major changes in the competitive environment in the industry:

-- consolidation;

-- the entry of banks and credit unions into the insurance industry; and

-- challenges to independent brokers from other distribution channels.

A major priority is to strengthen the relationships of the brokerage firms
(NN Financial, Commerce Group, Halifax Insurance, and Western Union) with their
independent intermediaries through technology, new products and marketing
assistance. In addition, ING's strong position in the non-life insurance market
will continue to be enhanced by taking advantage of the opportunities for
consolidation and acquisition in the Canadian marketplace. The direct response
channel, although currently relatively small, is expected to be ING's fastest
growing channel in Canada. Belair Insurance focuses on rapidly expanding its
direct response business, both through organic growth and geographic expansion.

Life operations. Since 1990 ING has been operating in the Canadian life
insurance market as NN Financial. Its gross life premium income was NLG 631
million in 1996. The distribution channels used are independent MANAGING GENERAL
AGENTS, independent intermediaries and life insurance brokers. NN Financial
distributes its products across Canada via a network of 63 Managing General
Agents representing more than 5,000 brokers. The products sold are individual
life and investment products. While NN Financial's market share of life
insurance in force is small, the company has grown to become a market leader in
terms of new sales in the universal life market.

Non-life operations. FSI's Canadian non-life operations are conducted
through Commerce Group, Halifax Insurance and Western Union, which distribute
their products through some 2,300 independent agents across Canada. Each company
focuses on a particular region of the country. Commerce Group offers all lines
of non-life insurance in Quebec. Halifax Insurance operates in Ontario and the
Maritimes, while Western Union operates in Alberta and British Columbia. The
companies focus on the personal and small to medium-sized commercial markets.

In 1995 ING acquired the Ontario-based Wellington, a medium-sized non-life
insurance company which sold fire, automobile and miscellaneous insurance
products through approximately 700 independent brokers to individuals and
companies. Wellington was subsequently integrated with other members of FSI's
Canadian non-life operations.

In addition to its independent agent channel, FSI provides non-life
insurance on a direct response basis through Belair Insurance. Belair manages
more than 200,000 home and automobile insurance policies to customers recruited
generally through radio and television campaigns, billboard advertisements, and
other media sources. Products are marketed and sold mainly by phone through two
call-centres and 35 branches in Quebec, Ontario and New Brunswick. Recently,
Belair has also focused on supporting rapid expansion of and investment in
state-of-the-art call centre technology.

In 1996 the combined gross premiums of the Canadian non-life insurance
activities were NLG 1,472 million. ING Canada ranked second in Canada in the
non-life sector, with a market share of more than 6% in 1995.

Mexico

Based in Mexico City, ING Seguros began selling individual life insurance
products in January 1996, utilizing a distribution force of 204 financial
advisers. It plans to increase the number of financial advisers and distribute
its products throughout Mexico. The company targets the middle and high income
market with retirement, college education and family protection plans. It has
also launched a universal life segregated funds product. ING entered the Mexican
pension administration business in February 1997, through a joint venture with
Bank Bital.

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Asia

In Asia, FSI's insurance operations concentrate mainly on selling life
insurance. Together with Central Europe and South America, Asia is a region
where FSI intends to expand its life insurance operations in the years ahead.

Products

Total income attributable to premiums reported by FSI's insurance
operations in Asia and Australia amounted to NLG 3,581 million in 1996,
comprised of NLG 2,888 million from life premiums and NLG 693 million from
non-life premiums. The overall result before tax in 1996 was NLG 184 million.
The following sets forth the breakdown of FSI's Asia and Australia insurance
premiums by type of product for the years indicated.

YEAR ENDED DECEMBER 31,
------------------------
1996 1995
----- -----
(NLG MILLIONS)

Asia
Life
Individual............................................... 1,429 1,267
Group.................................................... 17 17
------ ------
Total Life.......................................... 1,446 1,284
Non-life.................................................... 123 101
------ ------
Total............................................... 1,569 1,385
Australia
Life
Individual............................................... 159 113
Group.................................................... 1,283 646
------ ------
Total Life.......................................... 1,442 759
Non-life.................................................... 570 516
------ ------
Total............................................... 2,012 1,275
====== ======

Life

China. FSI expects the People's Republic of China to become an important
market for the long-term growth of ING's international insurance operations. In
1993 ING Insurance obtained licenses to open representative offices in Shanghai
and Beijing. Licenses for Guangzhou (1994), formerly known as Canton, and Dalian
(1996), have also been obtained. These representative offices carry out market
research, develop promotional activities and maintain contacts with government
institutions and companies. FSI expects, in the coming years, to obtain
permission to upgrade its representative offices into operating business units
which will sell life insurance to Chinese customers.

Indonesia. ING and its local partner Penta Group have applied for a
joint-venture life insurance license under the name PT ING Penta Insurance. The
joint venture expects to receive the license and commence operations in 1997.

Japan. In 1986 ING Insurance became the first European insurer to
establish a branch office for life insurance in Japan. The Japanese operations
became profitable in 1992, ahead of its business plan. In 1995 this greenfield
operation was converted from a branch office of NN Life into an independent
local company called ING Life Insurance Company ("ILIC"). ILIC Japan distributes
its life insurance products through a network of independent agents consisting
of independent agencies, tax consultants and certified public accountants.
Despite changes resulting in less favorable tax treatment of ILIC Japan's most
important product, ILIC Japan increased its premium income from the small to
medium enterprise market by 13%. Premium income amounted to NLG 1,281 million in
1996 and in local currency premium

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income grew by 25%. In 1996 the insurance portfolios continued to show strong
growth, which was realized through continued expansion of the number of
branches, offices and agencies. In addition, the opening of a second
distribution channel of tied agents also increased sales. In 1995, its share of
the life insurance market was 0.3%.

Philippines. In November 1996, ING obtained a license to sell life
insurance in the Philippines. Preparations are currently underway to commence
operations in the summer of 1997.

South Korea. The greenfield life insurance in South Korea commenced
operations in 1989, selling its products through independent part-time agents. A
full-time direct sales organization was set up at the end of 1990. In 1992 the
branch office was converted into a subsidiary called the Netherlands Life
Insurance Company which generated premium income of NLG 81 million in 1996. The
field organization of some 250 tied agents concentrates mainly on the individual
life market. Its share of the life insurance market was 0.1% in 1995.

Taiwan. The Taiwanese life greenfield started in 1989 as a branch of ING's
American subsidiary, Life of Georgia ("LOG"), as government regulations only
allowed United States insurance companies to operate alongside local companies.
LOG Taiwan uses some 1,200 tied agents with the support of 30 sales offices to
distribute its life insurance products. It sells a range of traditional whole
life policies as well as basic life covers, accident and health riders and
travel insurance. LOG Taiwan achieved a 38% increase in total premium income, to
NLG 127 million, in 1996.

Non-life

FSI also sells non-life insurance in Asia through branch offices in Brunei,
Hong Kong and Singapore. The Hong Kong and Singapore markets are highly
competitive, whereas Brunei is a small, underserved market. The branches sell
their products to corporate as well as to individual clients, mainly through
independent agents and brokers. The branches sell health insurance products
under the Blue Cross label for individual and family health plans, as well as
Blue Cross Label group products. The health insurance plans have contributed
greatly to the development of ING's insurance operations in this region. There
is no relationship between ING's Blue Cross name and the Blue Cross organization
in the United States. ING has registered the Blue Cross trade name and logo in
the countries for which ING acquired the right to use such trade name and logo.
Non-life branch office premiums in Asia were NLG 58 million in 1996.

Indonesia. FSI conducts its non-life insurance business (including the
sale of medical products) in Indonesia through an 80% participation in ING
Insurance Indonesia, a joint venture with the Indonesian Lippo Group established
in 1976. ING Insurance Indonesia markets standard non-life products. Its office
staff numbered 85, with a field staff of 8 in 1995. ING Insurance Indonesia
generated premium income of NLG 23 million in 1996. Its share of the non-life
insurance market was 0.9% in 1995.

Australia

In Australia, ING operates through Mercantile Mutual, a wholly-owned group
of companies, comprising a holding company with various subholdings. Mercantile
Mutual is one of Australia's leading financial services groups and offers a
broad range of products to its clients through independent intermediaries under
one label. Mercantile Mutual's products and services include life insurance,
non-life insurance, investment products, managed funds and superannuation funds.
The life products have a distinct investment bias, with benefits related to
investment performance. In Mercantile Mutual's capital-guaranteed business,
policyholders share in the actual investment results achieved through the
distribution of bonuses. The non-life operation generates fluctuating results,
partly due to weather-related factors and to underwriting results in compulsory
classes of automobile coverages. In 1995 the company was able to expand its
distribution capacity through the acquisition of Le Fort Capital Corporation.
This company operated RetireInvest, one of Australia's largest networks of
financial advisers, as well as a funds management operation and a life company.
The acquisition enabled RetireInvest advisers to have access to an expanded
range of financial products. In 1996 Mercantile Mutual acquired Pacific Mutual

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Australia, an investment management and life company. This acquisition will
extend Mercantile Mutual's operations into listed property trusts and the New
Zealand market. It will also expand its life and funds management business.
Mercantile Mutual had an office staff of 1,830 in 1996. It manages total assets
of over NLG 16 billion. In 1996 premium income was NLG 1,442 million from life
insurance and NLG 570 million from non-life insurance. Its market share was 4%
of the life insurance market and 4% of the non-life insurance market in 1995,
the latest year for which such information is available.

FSI Commercial Banking

Australia. ING Mercantile Mutual Bank originally commenced operations in
1971 under the name of Mercantile Mutual Finance. In December 1994 ING Bank was
granted a full banking license for Australia. The finance company was converted
into a bank without branches. It started selling a range of banking products to
private customers under the name of ING Mercantile Mutual Bank using the
intermediary distribution networks of the Mercantile Mutual insurance
organization. The bank's retail products include home (equity) loans, investment
loans and deposit facilities. The existing mortgage and leasing activities of
the finance company have been integrated into the new banking operation. ING
Mercantile Mutual Bank also provides corporate banking services, using the
resources of ING Bank's extensive worldwide network.

Belgium. De Vaderlandsche Spaarbank (a savings bank) started marketing
integrated financial services products in Belgium in March 1994. It is currently
marketing loans, savings products and mutual funds through the distribution
networks of ING's Belgian insurance companies, De Vaderlandsche and RVS Belgium.

Canada. In Canada, ING Bank N.V. operates through a wholly-owned federal
trust company subsidiary, which began a direct response retail banking program
in April 1997. Savings and consumer lending products are marketed through the
mass media, mail, and telephone and by fax.

Greece. ING Bank Greece, which focuses mainly on retail banking, started
its operations in August 1995. ING Bank Greece sells its products through
specially trained agents selected from the insurance sales force of NN Greece
who approach their clients with a broad financial services package. Banking
products include deposits (both in local and foreign currencies), treasury bills
and bonds, and VISA credit card facilities. The range of banking products
offered by the agents will gradually expand to include consumer loans and other
products. ING Bank Greece also provides treasury products and custodian services
to NN Greece and its associated mutual fund company.

Hungary. In February 1996, ING Bank acquired the principal assets and
liabilities of Dunabank (Budapest), a Hungarian bank. This has given FSI a
client base of more than 50,000 customers and a branch network of 10 offices as
a starting point to expand retail banking activities in Hungary. The core
businesses of Dunabank include the marketing of credit/debit cards and deposit
certificates.

Italy. ING Sviluppo, a Milan-based financial services group, provides a
wide range of financial products and services for private customers and
institutional investors, including capital market products, security
transactions, asset management, mutual funds and insurance. Currently ING
Sviluppo has a network of more than 800 financial advisers who work on a
commission basis and sell banking and investment products as well as NN Italy's
life insurance and pension products to personal customers. ING Bank Milan has
obtained "primary dealer" status for its trading in government bonds. The
Italian treasury paper telematic market is opened to all the dealers connected
with this network, but only "primary dealers" and "specialists" are entitled to
fix quantities and prices of the treasury bills bid and offered, while dealers
can only accept quantities and prices offered or requested by primary dealers.

Poland. In January 1994, ING Bank acquired a minority interest in Bank
Slaski in Katowice in connection with the privatization of Bank Slaski by the
Polish government, and in 1996 increased its stake to its current level of
54.1%. Bank Slaski covers the province of Silesia and its neighboring provinces
in southeastern Poland. Its main activities are corporate lending and savings
and deposits for the commercial and private markets. The bank has more than one
million account holders. Bank Slaski is also

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active in the money market and is one of the key players in Polish securities
brokerage. In recent years the bank has significantly extended its services in
the corporate market and is also developing new products in retail banking. At
year-end 1996, total assets amounted to NLG 5.1 billion and shareholders' equity
was NLG 298 million. Life insurance products developed by NN Poland have been
sold through the branches of Bank Slaski since January 1995.

ING CORPORATE & INVESTMENT BANKING

Introduction

The management centre ING Corporate & Investment Banking, which employed an
average of 7,700 employees in 1996, comprises three business units, IBI, ING
Barings, and Treasury, Trading & Sales. CIB also includes the group's Global
Clients Division and Global Risk Management department, which are central
support units with international responsibilities. ING Bank International and
ING Barings were supported by an international network outside the Netherlands
of 125 offices in 51 countries at the end of 1996. In 1996 the total loan
portfolio of ING Corporate & Investment Banking increased by 37.5% to NLG 53.9
billion, representing 26.7% of ING Bank's total loan portfolio.

Reorganization

In response to the rapid development and the increasing cooperation between
corporate and investment banking, the business units under the Executive
Committee ING Corporate & Investment Banking (IBI, Treasury, Trading & Sales and
ING Barings) will be integrated. A steering committee has been formed to oversee
the integration, headed by the Chairman of the CIB Executive Committee. All
members of this steering committee will be appointed to the newly formed
Executive Committee of CIB. It is intended to change the trade name of ING
Corporate & Investment Banking to ING Barings, although some units will retain
their current trade names, to the extent necessary. See "INFORMATION REGARDING
ING -- Maintain Leadership Position in Emerging Markets".

The international corporate and investment banking operations of ING have
gained a reputation for being leaders in emerging markets corporate and
investment banking. ING Bank also has a significant presence in international
trade and commodity finance. ING's international operations in the field of
investment banking have expanded rapidly in recent years, most notably as a
result of the acquisition of the United Kingdom merchant bank, Barings, in March
1995. The acquisition of the principal assets and liabilities of Barings has
contributed considerably to ING's international name recognition and access to
potential clients.

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[EMERGING MARKETS BANKING CHART]

ING Bank International

Most of ING's international corporate banking activities are concentrated
in IBI, with an international network outside the Netherlands of 77 branches in
48 countries at the end of 1996. IBI's activities are organized by Emerging
Markets Banking, International Corporate Banking and Financial Institutions
Banking Activities, conducted through local branch offices and include payments
and transfers handling, treasury products, capital market transactions, local
corporate finance activities, import/export finance, cross border finance, LDC
debt trading, debt conversion and debt reduction transactions, as well as
advisory services. In International Corporate Banking, IBI focuses on trade and
commodity finance, natural resources finance, export finance, power plant
finance, telecommunications finance, media finance, international loan
syndications, asset-backed finance and structured finance. In the area of
Financial Institutions Banking, IBI is engaged in commercial activities for
financial institutions in emerging markets (relationship management) and OECD
markets, interbank trade finance, loan and letter of credit syndications with
financial institutions, lending to financial institutions and interbank payment
and clearing services.

Emerging Markets Banking. IBI is particularly active in the emerging
markets of South America, Asia and Eastern Europe, and has gained a worldwide
reputation as a pioneer in this field. New offices were opened in 1996 in, among
others, the following countries: Malaysia (Labuan), South Africa (Johannesburg),
China (Xiamen) and Ecuador (Guayaquil). The representative offices in Mexico
(Mexico City), the Philippines (Manila), Ecuador (Quito) and Colombia (Bogota)
were also converted to full branches in 1996. Since the acquisition of Barings
in 1995 and the formation of ING Barings, ING Barings and IBI offices have
formed joint corporate finance teams in South America and Central and Eastern
Europe, containing representatives of both ING Barings and IBI. They share or
will share office space in most locations and will cooperate closely and
continue to integrate operations in the future. Such

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measures are designed to further enhance the cooperation between ING Barings and
IBI, in order to integrate the provision of investment banking and corporate
banking services in the emerging markets and leveraging IBI's extensive foreign
branch network, long history of international corporate banking and familiarity
with emerging markets. See "-- Reorganization".

International Corporate Banking. International loans to major corporations
are an increasingly important component of IBI's loan portfolio. The bank also
responds through the account management approach in which various ING business
units act jointly to provide complex, multi-disciplinary financing packages. ING
is also increasingly active as an arranger of international loans, is one of the
leading banks in the area of trade and commodity finance and is a major
participant in export and project finance. Despite increased competition and the
resulting deterioration of lending margins, IBI has been able to grow its
lending portfolio significantly while maintaining its selective lending policy.

Financial Institutions Banking. IBI's cooperation with foreign banks is
designed to assist IBI's corporate customers worldwide in the field of
commercial transactions. IBI has developed a global correspondent banking
network, numbering more than 3,000 banks in all. By concluding cooperation
agreements, IBI has also strengthened its position in international funds
transfer.

ING Barings

Acquired in March 1995, Barings is now fully integrated in the ING
organization. Barings' research and investment banking activities are included
within ING's corporate and investment banking activities as ING Barings, part of
the CIB management centre, while the asset management activities of Barings are,
as Baring Asset Management, part of the management centre ING Asset Management.

ING Barings is organized along five product lines worldwide, with strong
local and regional management. The five product lines include Equity Broking and
Research, which encompasses research, broking, trading and sales coordination;
Corporate Finance (emerging markets), which encompasses equity and debt
underwriting as well as advisory services, in particular related to cross-border
mergers and acquisitions; Corporate Finance (developed markets), which
encompasses acquisitions, dispositions, mergers and equity issues as well as
advisory services, in particular related to companies' capital structures and
strategy issues; Debt and Derivative Trading and Sales, which encompasses
emerging market debt transactions, equity derivatives trading, high yield assets
trading and debt financial products transactions; and Banking, Structured
Finance and Advisory, which encompasses debt advisory services, securitization
and private placements.

Equity Broking and Research. ING Barings' equity brokering and research
product line specializes in research, brokerage and trading and sales
coordination with respect to a broad range of listed and unlisted equity
securities. ING Barings' research capabilities have traditionally been focused
on emerging markets, where it has long been recognized as a leader in equity
research with respect to a broad range of companies and markets. In 1996 new
offices were opened in Central and Eastern Europe, India, Pakistan and South
Africa. ING Barings has invested in a new client and research management system
and employed new staff for research and trading.

Corporate Finance. ING Barings' corporate finance activities are directed
at both the emerging and developed markets, and encompass a full range of
traditional investment banking products and services, including underwriting and
other capital-raising activities and M&A advisory services. In the emerging
markets area, ING Barings is able to benefit from ING's long-standing strategic
orientation toward emerging markets and to draw upon the large international
scope and spread of the ING network, including offices in emerging markets which
are an important source of financing business in local markets. ING's
historically strong focus on advisory services in the fields of corporate
finance, project and trade finance, and in financial sector development and in
the areas of debt reduction and debt rescheduling has also benefitted ING
Barings' emerging markets investment banking activities. In 1996, IBI and ING
Barings lead-managed 26 equity and 22 bond issues, and arranged 82 syndicated
loans in emerging markets, totaling $14.6 billion. Utilizing its strong
relationships with "blue chip" Asian corporates and its substantial placing
power, ING Barings was an important equity underwriter in Asia

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and participated in several prominent transactions in 1996. ING Barings advised
on several important cross-border mergers and acquisitions in Brazil, Hong Kong,
Indonesia and South Korea.

In 1996, ING Barings' corporate finance activities in developed markets had
an excellent year. ING Barings completed 1996 at the top of the United Kingdom
mergers and acquisitions league tables, having concluded transactions with a
total value in excess of L11 billion. Baring Brothers, which exclusively
conducts corporate finance activities in the United Kingdom under this name,
advised on five of the United Kingdom's largest transactions. The ING Barings
offices in the United Kingdom and Continental Europe continued to work with
leading international companies. In the acquisitions area, ING is able to offer
a full range of financial services in the Dutch market, including the provision
of debt and equity capital, as well as advisory services through ING Barings.
ING Barings sponsored four listings on the London Stock Exchange and acted as
primary underwriter for six secondary issues.

Debt and Derivatives Trading and Sales. ING Barings' debt and derivatives
trading and sales unit engages in a broad range of trading and sales activities
in emerging market debt securities, as well as debt and derivative instruments
and other financial products in developed markets.

Banking, Structured Finance and Advisory. During 1995 ING Barings
structured finance and derivatives business was redirected to better accommodate
client requirements, and from the beginning of 1996, activities in the field of
derivatives have been combined into a separate subsidiary. ING Barings continued
to be very active as an adviser throughout 1996. Also in 1996, ING Barings
expanded its operations in Asia, and dedicated teams were established in New
York to provide support to the South American operations.

Treasury, Trading & Sales

The principal activities of Treasury Trading and Sales ("TT&S") are
treasury activities, which encompass the treasury management transactions
resulting from balance sheet management and cash management; trading, which
encompasses trading transactions with respect to OECD foreign exchange, money
market instruments, equities, bonds and derivatives; and sales, which
encompasses foreign exchange products, money market products, domestic bonds and
equities and futures and options. TT&S focuses on the management of the
liquidity of ING's global banking activities. TT&S seeks to ensure that all
funding obligations for ING's banking activities are met, utilizing a diversity
of funding sources, currencies and maturities.

Derivatives and foreign exchange products are important risk management
tools for TT&S and its customers. These contracts typically take the form of
futures, forward, swap and option contracts, and derive their value from
underlying interest rates, foreign exchange or equity instruments. TT&S as a
dealer enters into derivative and foreign exchange transactions with customers
separately or with other products to help them manage their risk profile, and
also trades for ING's own account. In addition, TT&S employs derivative and
foreign exchange contracts among other instruments as an end-user in connection
with its risk management activities.

In the Dutch bond market, TT&S is one of the major dealers and at the end
of 1996 had over 20% of the total market share in the dealing of Dutch
government bonds and 30% of the market share in the dealing of non-government
bonds.

At the end of 1996, TT&S had a 15% market share (in turnover) in the
trading of Dutch equities on the AEX Stock Exchange. TT&S is also one of the
largest market makers on the European Options Exchange in Amsterdam with a
market share of 10%. Also in 1996, TT&S expanded both its client base and its
sales of treasury products. In the corporate market, the transition from a
transaction-oriented approach to a more client-oriented approach was
successfully implemented, allowing TT&S to benefit from an increasing demand
from customers for treasury services.

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Global Clients Division

As part of its expansion over the last few years, ING has increased its
focus on multinational corporations. For these multinational corporations, ING
supplies a comprehensive range of products and services aimed at both parent
companies and their subsidiaries. The Global Clients Division ("GCD"), located
in the Netherlands, has relationship managers which initiate business and
coordinate contacts with clients; projects resulting from these contacts are
generally implemented by local branches. GCD, as the principal point of contact,
coordinates ING's global capabilities for its clients and identifies and follows
up on business opportunities.

GCD significantly extended its relationships with its customers and
enlarged its client base in 1996. ING's approach is aimed at offering worldwide
financial services, utilizing its specialization in emerging markets as an
important asset. In 1996, GCD assigned regional account officers to improve its
relationship with customers in each geographic region.

Global Risk Management

The Global Risk Management Department ("GRM") is a support department of
the management centre ING Corporate & Investment Banking and has specific
responsibility for the management of international credit and counterparty and
trading risks for CIB's international banking activities. In addition, GRM
maintains a watching brief in respect of credit and trading risks in the lending
portfolios of the management centres ING Financial Services International and
ING Asset Management.

Although the responsibility for individual client relationships (and the
associated credit risks) remains with commercial officers, day to day credit
risk management is carried out by dedicated teams in each business unit, with
reporting lines clearly separated from the commercial personnel. GRM, as a
central unit based in the head office, continually reviews the effectiveness and
efficiency of local credit control practices and procedures, including an annual
inspection by the credit inspection team of GRM. Specifically, GRM issues
standard credit procedures and policies, participates in the provisions of
standardized credit control software and leads in the design of appropriate
training schemes for credit risk management personnel. Further, the appointment
of the senior risk officer within any business unit of ING Corporate &
Investment Banking must be sanctioned by GRM, and in many cases GRM leads in the
identification of an appropriate candidate. For trading risk management, the
same local and central responsibilities apply.

ING ASSET MANAGEMENT

Introduction

ING Asset Management, with over NLG 246 billion in assets under management
at December 31, 1996, comprises the following seven business units:

- ING Investment Management
- Baring Asset Management
- International Private Banking
- ING Real Estate
- ING Trust
- Parcom
- Baring Private Equity Partners

At December 31, 1996, ING Asset Management had approximately 2,200
employees. The Executive Committee of Asset Management has decided to have a
strongly decentralized organization. This means that the business units are
independent and self-sufficient with regard to the daily operations.

ING Asset Management is responsible for asset management on behalf of the
insurance operations within ING, as well as the management of assets comprising
ING's own-label and third-party investment

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funds and third-party institutional and individual asset management. ING Asset
Management also manages the investments representing a portion of shareholders'
equity of ING Insurance.

The following sets forth information with respect to the assets under
management of ING Asset Management for the periods indicated.

AS OF DECEMBER 31,
------------------------
1996 1995 1994
---- ---- ----
(NLG BILLIONS)

Own Funds(1)................................................. 118 96 83
Third Party Funds(2)......................................... 128 113 42
--- --- ---
Total........................................................ 246 209 125

- ---------------
(1) See "ING Investment Management".
(2) Growth in Third Party Funds in 1995 was due principally to the acquisition
of Baring Asset Management.

ING Investment Management

ING Investment Management ("IIM") is responsible for managing the
investments of the insurance companies of ING, as well as managing equity and
fixed interest investments for institutional investors, individual clients and
the own-label investment funds sold by various ING companies, including ING
Bank, Postbank and Nationale-Nederlanden. IIM is also responsible for managing
the treasury activities of ING Insurance. The Executive Committee of ING Asset
Management defines and supervises ING Insurance's global investment policy.
Coordination of the policy is entrusted to IIM, and the policy is implemented by
the relevant business units of ING Asset Management.

The investment portfolios of ING's insurance operations managed by IIM
increased by 29% to NLG 104.4 billion at December 31, 1996. The fixed income
portfolios are designed to match the currency and maturity structure of the
corresponding insurance liabilities. The equity portfolio consists to a large
extent of holdings of 5% or more of the outstanding stock of Dutch companies.
Under Dutch tax law, dividends and capital gains of such holdings are tax
exempt.

Assets under management of IIM on behalf of Dutch institutional clients
increased by 20% to NLG 31 billion in 1996. The portfolio managed on behalf of
institutional clients consisted of fixed income securities (approximately 80%)
and equities (approximately 20%). The return on fixed income securities for 1996
was 8.1% and the return on equities was 29.2%. High priority was given to the
acquisition of new institutional clients in 1996, resulting in over NLG 2
billion in new assets under management from new clients.

The own-label investment funds managed by IIM increased in 1996 by more
than 20% to NLG 21.3 billion. A significant part of this increase can be
attributed to higher share and bond prices and investment income. IIM managed
investment funds in the Netherlands also increased due to the successful launch
of new funds like Postbank Nederland Fonds and ING Bank Mid Dutch Fonds. In
Australia, funds under management increased by NLG 2.5 billion as a result of
the acquisition of Pacific Mutual Australia. Outside the Netherlands, IIM
manages investment funds in Australia, Belgium, Greece, Italy and Luxembourg. A
further expansion in Europe is expected.

Baring Asset Management

Baring Asset Management provides a diversified spectrum of investment
management services to a variety of institutional and private clients, directly
and through the management of its own-label investment funds. It manages equity,
fixed-interest and balanced portfolios for pension funds, government agencies,
charitable bodies, companies and private individuals. As of December 31, 1996,
nearly 75% of its clients were in the United Kingdom and North America. It is
currently intended that Baring Asset Management will be the principal vehicle
for developing third party asset management, particularly

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in the United Kingdom, the United States and Japan. See
"-- Strategy -- Development of Asset Management".

Baring Asset Management's total assets under management at December 31,
1996 amounted to NLG 70 billion, as compared with NLG 63.5 billion at December
31, 1995. Despite a disappointing return on investments in the United Kingdom,
assets under management increased by 10%. During 1996, Baring Asset Management
successfully introduced domestic investment funds in Japan.

Baring Asset Management has a total of 14 offices in 11 countries. It has
investment and client service offices in London, Boston, Tokyo, Hong Kong and
Guernsey and it also maintains client service and marketing offices in Sydney,
Bahrain, Paris, Toronto and San Francisco. Its Trust and Banking operations are
located in London, Guernsey, Dublin and the Isle of Man.

International Private Banking

The International Private Banking ("IPB") business unit focuses primarily
on high net-worth Dutch individuals living abroad, affluent entrepreneurs in
emerging markets and other wealthy private clients in local markets. The
objective is the application of the "wealth management" concept to its client
target groups, whereby IPB seeks to contribute to the accumulation, maintenance
and transfer of all types of assets on behalf of its clients.

IPB is a client driven business and will maintain its focus on those
segments where ING's identity provides it with a sustainable competitive
advantage. ING believes that there are opportunities for synergy between IPB and
other ING Asset Management business units involved in individual funds
management.

In 1996, IPB's client base increased by 7%, while total assets under
management grew by 27% to NLG 15 billion. In addition, IPB further expanded its
international network, by opening offices in Guernsey and Warsaw.

ING Real Estate

ING Real Estate is divided into five sub-business units: Investment,
Development, Finance, International and Real Estate Funds. ING Real Estate
Investment manages the Dutch real estate investments of ING Insurance companies,
handling a total portfolio of NLG 6 billion at year-end 1996, compared to NLG
5.6 billion at December 31, 1995. ING Real Estate Development is involved in the
development of mainly retail projects in the Netherlands with a total portfolio
of NLG 1.9 billion at year-end 1996. The development projects relate to shopping
centers, residential property, office properties and city center developments.
ING Real Estate Finance targets professional investors and the commercial
property market and had a portfolio of NLG 4.4 billion at December 31, 1996.
International real estate investment is carried out by ING Real Estate
International through investments and development in Spain, Portugal, Belgium,
France, the United States and in emerging markets in Eastern Europe and the Far
East. In addition to the head office in The Hague, ING Real Estate International
has offices in Brussels, London, Paris, Washington, and Madrid. In 1996, the
Nationale-Nederlanden building in Prague, Czech Republic, and the Via Catarina
indoor shopping center in Oporto, Portugal, were completed, and work started in
Beijing on the construction of 550 owner-occupied apartments. ING Real Estate
International's portfolio totaled NLG 2 billion at the end of 1996, of which NLG
1.8 billion is invested in existing property and NLG 0.2 billion in development
projects. ING Real Estate Funds is involved primarily in management of Dutch
retail real estate investment funds. ING Real Estate is exploring the creation
of new real estate investment funds in light of increased demand therefor by
institutional and private clients.

ING Trust

ING Trust is an international organization which provides trust and
management services from nine locations around the world. The international
trustee operations achieved steady growth in 1996, during which commission
income increased by 32% to NLG 18.5 million.

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Parcom and Baring Private Equity Partners

Parcom and United Kingdom-based Baring Private Equity Partners both
specialize in private equity investments, with Parcom investing on behalf of ING
Insurance, while Baring Private Equity Partners invests primarily third-party
funds (with the exception of occasional sponsor capital supplied by ING). Parcom
is involved primarily in investments in management buy-outs and investments in
medium-sized international companies. At the end of 1996, the number of its
investments totaled 53, with a total book value of NLG 395 million. Baring
Private Equity Partners invests in private equities of all types of companies,
excluding seed- and start-up financing, on behalf of third parties, with a focus
on Europe, South America and Asia. At the end of 1996, Baring Private Equity
Partners had a portfolio with a book value of NLG 1.4 billion, an increase of
23% over 1995.

INFORMATION TECHNOLOGY

ING believes that the development and use of modern information technology
("IT") increasingly contributes to the success of ING and that continued
investment by ING in developing and updating new technology will be necessary to
maintain its competitive position. IT has enabled ING to offer specialized and
integrated financial services to retail, corporate and institutional clients and
will play an increasingly important role in the areas of introducing new
products, creating new distribution channels and tailor-made services.

In addition to the traditional areas of client, product and management
information systems, IT is used in the areas of global communication networks,
integrated client databases, risk management systems, direct marketing
techniques, and electronic services such as call centers.

The development and implementation of ING's IT activities is largely
decentralized. As a result, business units are able to efficiently and quickly
adopt IT for development of new products and services. The business units can
consult the professional internal IT support organization which is based in
Amsterdam and offers services such as datacenters and infrastructure development
as well as the coordination of IT research, IT policy and IT knowledge exchange.

By seeking to make optimal use of IT opportunities, ING has established a
leading position in Dutch postal giro payments transfers (based on transaction
volume, ING Bank was the market leader with a market share of 48% in 1995).
Additionally, IT has created opportunities for the development of home-banking
systems, direct marketing distribution channels and multifunctional stored-value
cards.

IT is an integral part of ING's strategy and ING believes that development
and enhancement of ING technology will positively influence ING's presence at a
global level, enhance ING's presence in its existing markets and lower the
entrance barriers in new markets. Because ING uses uniform IT in its greenfield
operations, ING is able to establish new businesses promptly after the receipt
of a license. Additionally, management believes that IT will help ING to control
expenses and increase productivity per employee.

The strategic emphasis of IT for ING is also reflected in the continued
high level of investments by ING in IT systems and processes. Expenditures in
the information technology area over the past three years have totaled in excess
of NLG 5 billion, including allocated personnel and overhead costs, internally
and externally developed software and hardware purchases.

EMPLOYEES

The number of staff employed on a full-time equivalent basis of ING
averaged 58,106 in 1996, of which approximately 29,412, or 51%, were employed in
the Netherlands. The geographical distribution of

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employees with respect to ING's insurance operations and banking operations over
the past three years was as follows (full time equivalents):

INSURANCE OPERATIONS BANKING OPERATIONS TOTALS
------------------------ ------------------------ ------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
------ ------ ------ ------ ------ ------ ------ ------ ------

The Netherlands... 9,483 9,410 8,991 19,929 19,213 19,944 29,412 28,623 28,935
Rest of Europe.... 5,263 3,977 3,838 7,917 4,790 1,859 13,180 8,767 5,697
North America..... 8,036 8,061 7,623 1,200 1,213 594 9,236 9,274 8,217
South America..... 304 250 359 1,081 1,007 781 1,385 1,257 1,140
Asia.............. 937 868 791 1,969 1,720 618 2,906 2,588 1,409
Australia......... 1,830 1,543 1,555 81 72 2 1,911 1,615 1,557
Other............. 17 20 19 59 -- 1 76 20 20
------ ------ ------ ------ ------ ------ ------ ------ ------
Total........ 25,870 24,129 23,176 32,236 28,015 23,799 58,106 52,144 46,975

In addition, the number of staff employed by joint ventures included in
ING's consolidated accounts averaged 356 in 1996, 281 in 1995 and 275 in 1994.
The percentage of ING's employees allocated to the four management centers was
as follows for each of the years 1996 and 1995:

1996 1995
---- ----

ING Nederland................................................................ 47% 52%
ING Financial Services International......................................... 36 29
ING Corporate & Investment Banking........................................... 13 12
ING Asset Management......................................................... 3 5
Other (mainly central staff departments)..................................... 1 2
--- ---
100% 100%

Substantially all of ING's Dutch employees are subject to collective
bargaining agreements covering the banking and insurance industries. ING
believes that its employee relations are generally good.

PROPERTIES

In the Netherlands, ING owns substantially all of the land and buildings
which are used in the normal course of its business, and leases headquarters
space in Amsterdam. Outside the Netherlands, ING predominantly leases all of the
land and buildings which are used in the normal course of its business. At
December 31, 1996 ING had more than 1,200 branch, representative and similar
offices worldwide, of which approximately 450, principally branch offices, were
located in the Netherlands. In addition, ING has part of its investment
portfolio invested in land and buildings. Management believes that ING's
facilities are adequate for its present needs in all material respects.

LEGAL PROCEEDINGS

ING companies are involved in litigation and arbitration proceedings in the
Netherlands and in a number of foreign jurisdictions, including the United
States, involving claims by and against them which arise in the ordinary course
of their businesses, including in connection with their activities as insurers,
lenders, employers, investors and taxpayers. In certain of such proceedings,
very large or indeterminate amounts are sought, including punitive and other
damages. While it is not feasible to predict or determine the ultimate outcome
of all pending or threatened legal and regulatory proceedings, management does
not believe that their outcome will have a material adverse effect on ING's
financial position or result from operations.

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ING RISK MANAGEMENT

INTRODUCTION

The primary risks faced by ING include market, liquidity, legal and
operational risks on an ING-wide basis; investment-related, credit, ACTUARIAL,
underwriting and catastrophe risk in its insurance operations; and interest and
foreign exchange, credit and liquidity risk in its banking operations. ING has
established comprehensive risk management processes to facilitate, control, and
monitor the management and accumulation of such risks, including the
establishment of risk control mechanisms at different levels throughout ING. ING
continuously evaluates its processes and procedures for managing its risk
profile as business activities change in response to market, product and
regulatory conditions. ING continually seeks to strengthen its risk management
procedures through investments in research, technology and training.

The Executive Board places a high priority on risk management and, with
ING's Chief Financial Officer ("CFO"), as a member of the Executive Board, takes
an active role in supervising ING's risk management guidelines and activities,
including the short and long-term risk profiles of ING across its four
management centres and its insurance and banking activities, including a
weighing of risk taking.

The CFO is advised by Group Actuarial and Risk Control ("A&R") whose
objective is to oversee ING's worldwide risk management processes. A&R reports
directly to the CFO. A&R reviews periodically trends in ING's risk profiles and
financial performance, as well as significant developments in risk management
policies and controls. A&R further develops, communicates, and implements an
institutional view of and process for managing risk across ING with a focus on:
(i) monitoring the risk profile of ING, through the use of various risk
management tools in order to support portfolio management decisions and risk
profile evaluations for the desired aggregate exposure levels of ING and its
overall insurance and banking activities; (ii) analyzing (crucial) current and
potential risks; (iii) judging the way (crucial) risk factors are managed; (iv)
recognizing and determining potential risk areas in order to formulate concepts
for handling such risks relevant for the ING organization; and (v) evaluating
risks at the ING level, with particular attention to possible interdependence or
accumulation of current or potential risks. A&R is independent of ING's
management centres and performs independent reviews (including specific
assignments of the CFO).

Operating within well-defined corporate policies and standards and subject
to independent overview, ING's business managers are responsible for managing
the risks pertaining to the operational activities and markets in which they do
business. ING relies on its local managers and their knowledge of changes in
market, industry, credit, economic, and political conditions in their respective
countries and their experience, supported by various risk management tools, to
direct their businesses and revise their specific operating strategies within
ING's overall strategy.

Various risk management departments and committees are involved in
analyzing and monitoring risks to ensure that the insurance and banking business
units are operating within established corporate policies and limits. For ING's
domestic and international insurance operations, A&R monitors the risk position
(e.g., adequacy of provisions, expected profitability, natural catastrophe risk,
risk profile, resilience) of the business units. For the domestic and
international banking operations, separate credit and trading risk control
departments (operating independently from the business units) and Risk
Committees have been established to monitor market, credit, and liquidity risk
positions for ING's banking activities. Within each of ING's business units ING
aims to ensure that there is a separation of functions between front-office,
back office and risk management functions. In addition, the periodic reviews
performed by internal auditors, regulators, and independent auditors provide
further review of ING's risk management processes and procedures.

ING

ING is subject to market risk, liquidity risk, legal risk and operational
risk firmwide, as well as additional specific risks in its insurance and banking
operations. Market risk at the ING level can be

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defined as the risk of loss related to adverse fluctuations and trends in the
financial markets in which ING operates, along with the related impact on ING's
liquidity and risk profiles. Liquidity risk is associated with the general
funding of the activities of ING. It includes the risk of being unable to fund
its portfolio of assets and liabilities at appropriate maturities and rates.
Legal risk arises from the uncertainty of the enforceability, through legal or
judicial processes, of the obligations of ING's clients and counterparties,
including contractual provisions intended to reduce credit exposure by providing
for the offsetting or netting of mutual obligations (particularly where risks
may be greater because applicable laws and regulations may be relatively recent
or incomplete). ING seeks to minimize such uncertainty through consultation with
internal and external legal advisors in all countries in which it conducts
business. Operational risk can be defined as the potential for loss caused by a
breakdown in information, communication, transaction processing, settlement
systems and procedures and can include failure to obtain proper internal
authorizations or to properly document transactions, equipment failure,
inadequate training or errors by employees. ING seeks to minimize operational
risk by maintaining a comprehensive system of internal controls and back-up
systems at each business unit level. ING's Internal Audit Department provides an
independent appraisal function which examines and evaluates the adequacy and
effectiveness of ING's internal control systems, conducts the review and audit
of financial statements, and carries out special investigations and assignments
at the request of management.

ING INSURANCE RISK MANAGEMENT

The following is a summary of the additional significant risks related to
ING's insurance activities and the management thereof by ING.

MANAGEMENT OF ACTUARIAL AND UNDERWRITING RISK

Actuarial risk arises in connection with the adequacy of ING Insurance's
solvency and reserves relative to its insurance obligations. Underwriting risk
is inherent in the process whereby applications submitted for insurance coverage
are reviewed and it is determined whether the coverage being requested for an
agreed premium will be provided. ING Insurance's actuarial and underwriting
risks are managed and overseen by A&R, which has responsibility for (i)
monitoring the adequacy of ING Insurance's solvency and reserves; (ii) providing
guidelines for and the monitoring of product design, underwriting and pricing
criteria and risk profiles; (iii) reviewing insurance-related risk controls and
asset and liability management; and (iv) providing guidelines for and monitoring
the analysis and calculation of the embedded value of ING's insurance business
units. ING's actuarial risk management procedures require all actuaries of ING
worldwide to communicate with A&R on a regular basis. In addition, A&R functions
as a central consultant and provides advice to those business units which
require additional actuarial expertise.

Insurance underwriting is performed at the business unit level. When a new
market is entered or a new product line is developed, A&R monitors the expected
risk exposures and the expected return. It also tests whether the valuation
methodology employed in analyzing new markets or products is in conformity with
ING's accounting and actuarial principles.

A&R reviews the effectiveness of each business unit's risk assessment
procedures through periodic audits. These audits are performed together with ING
Controller, IIM and others.

MANAGEMENT OF CATASTROPHE RISK

ING Insurance's non-life businesses are subject to losses from volatile and
unpredictable natural and man-made events, including hurricanes, windstorms,
earthquakes, fires and explosions, the frequency and severity of which are
inherently uncertain. ING Insurance generally seeks to manage its exposure to
catastrophe losses through selective underwriting practices, including the
monitoring of risk accumulations geographically, and through the use of
catastrophe reinsurance. A provision for the possible financial impact of
natural catastrophes has also been established in accordance with Dutch GAAP,

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which allows for the creation of pre-event catastrophe reserves. See Note
1.6.2.9 of Notes to the Consolidated Financial Statements.

REINSURANCE MANAGEMENT

Like most insurers, ING Insurance manages its overall exposure to single
risks or events through the purchase of reinsurance coverage on both a TREATY
and a FACULTATIVE basis. Nationale-Nederlanden Reinsurance ("NN Re"), a separate
legal entity domiciled in the Netherlands, acts as an internal reinsurance
carrier for most, but not all, of ING's non-life insurance companies worldwide,
by assuming reinsurance on an intra-ING basis from such companies and
centralizing the placement of outgoing reinsurance with third-party carriers.

In life insurance, for which reinsurance is less centralized than non-life,
the risk retention on new policies within individual business units ranges from
NLG 0.1 million to NLG 2.9 million per insured life, depending on the size of
the business unit. Mortality risk in excess of the retention is reinsured with
third parties.

The retention levels applicable to ING's non-life insurance business are
established by risk category and determined by the business units in
consultation with NN Re. Third-party non-life reinsurance coverage for all
insurance operations other than in the United States, Canada and Australia is
managed by NN Re. ING Insurance's United States and Canadian operations arrange
third-party reinsurance coverage directly, with NN Re in a risk advisory role on
non-life reinsurances. Reinsurance is placed with insurance companies based on
evaluation of the financial security of the reinsurer, terms of coverage and
price. ING's internal evaluation involves both qualitative and quantitative
analysis. While ING remains liable as a primary insurer notwithstanding the
ceding of reinsurance to third parties, ING's evaluation criteria, which include
the claims-paying and debt ratings, capital and surplus levels, and marketplace
reputation of its reinsurers, are such that ING believes any risks of
collectibility to which it is exposed are minimal. ING companies have not
experienced difficulty in collecting from their reinsurers. Reserves for
uncollectible reinsurance are provided as deemed necessary, and were NLG 12
million at December 31, 1996. Other than Security Life of Denver, which assumes
life reinsurance from third parties, no business units currently assume
reinsurance from third parties, except for compulsory participations in pools
and industry associations.

LIQUIDITY AND CREDIT RISK

Because of ING Insurance's policies of matching assets and liabilities, the
long-term nature of most of its liabilities, and the sizable cash flow from its
investment portfolio, ING Insurance believes that its liquidity risk is limited.
ING Insurance's policy of having a fixed-income investment portfolio, with an
average credit quality of AA- means that the credit risk in that portfolio is
relatively small. The quality of ING Insurance's investment portfolio is
monitored on a quarterly basis by ING Asset Management.

Investments are held partially for ING Insurance's own risk and partially
for the risk of policyholders, the latter including fiduciary investments on
behalf of third parties, such as pension funds.

Investments by ING Insurance in fixed-income securities (including private
placement), equities and real estate are subject to detailed internal approval
processes (with the exception of investments in governmental and
quasi-governmental entity securities). The general managers responsible for
investments are authorized to approve investments up to specified amounts,
depending on the issuer, investment and currency involved. Proposed investments
that exceed such thresholds require the approval of the Executive Committee of
ING Asset Management. If the proposed investment exceeds the approval limits of
the Executive Committee, the investment proposals require the approval of ING's
Executive Board.

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ASSET AND LIABILITY MANAGEMENT

In its fixed-income portfolio ING Insurance follows a strategy of closely
matching the duration of its assets with those of its liabilities. ING Insurance
closely matches the currencies of its assets with those of its liabilities. With
respect to investments representing the surplus of ING's non-Dutch insurance
companies, ING limits the impact of exchange rate fluctuations by hedging not
less than 60% of the average net exposure to foreign currencies represented by
such investments. This policy is carried out centrally in the Netherlands and is
supervised by the Executive Committee of ING Asset Management. Some product
portfolios are managed using cash flow matching which is carried out on a
contract basis (for guaranteed investment contracts in the United States), on a
group of investment policies basis or on a portfolio basis.

Pursuant to Dutch GAAP, unrealized gains and losses on ING Insurance's
invested assets are not reflected in its profit and loss account, and gains or
losses realized on the disposition of investments are amortized over time rather
than being recognized immediately. See Note 7.1 of Notes to the Consolidated
Financial Statements.

In many markets, ING Insurance sells profit sharing life insurance policies
(including relatively low fixed interest rate guarantees, i.e. 4% in the
Netherlands). This profit sharing may be based either on total profits or on
excess interest margins. In both cases, profit sharing dampens the impact of
interest rate fluctuations on ING's profit, by transferring a portion of total
profits or excess interest margins to policyholders in the form of a premium
discount or an experience refund.

ING Insurance sells products in which investment risks are largely
transferred to policyholders (subject to further contractual clauses which can
include guaranteed returns of 4% linked to contractual durations of at least 10
years). Examples are unit individual linked policies and segregated fund pension
plans in group business. At December 31, 1996, approximately 15% of ING
Insurance's investment portfolio consisted of investments relating to insurance
policies where gains or losses arising from interest rate fluctuations were
largely for the account of policyholders.

While the product design and certain Dutch accounting features noted above
operate to reduce the interest rate sensitivity of ING Insurance results (to the
extent interest rates are higher than the guaranteed interest rates), changes in
interest rates could have an impact on such business to the extent they result
in changes to interest income and to the extent they affect the levels of new
product sales or surrenders and withdrawals of business in force. Based on its
current profit sharing levels and other product features and taking into account
the impact on new policies and withdrawals, ING Insurance estimates that, with
respect to its Dutch operations, any increase or decrease of 100 basis points
(1%) in long-term (8-10 year) worldwide government bond rates would have had a
corresponding impact of approximately 2% on its 1995 net profit levels.

Premium levels and provisions for life policy liabilities are calculated on
the basis of prudent prospective actuarial methods. Prudent interest assumptions
are used, at least in line with local actuarial standards. However, a long-term
decrease in interest rates below the interest rate credited on the policies
would have a serious impact on profit and surplus levels.

ING BANK RISK

The following is a summary of the significant additional risks related to
ING's banking activities, and the management thereof by ING.

INTEREST RATE AND FOREIGN EXCHANGE RATE RISKS

Interest Rate and Foreign Exchange Rate Risks relate to the effect on ING
Bank's future earnings of changes in interest rates and foreign exchange rates.
This exposure arises in the normal course of ING Bank's core businesses. As more
fully described below, ING Bank has established procedures for managing these
risks as market risks within its domestic and international business units.

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Key control variables to manage interest rate risks and foreign exchange
rate risks in ING Bank's foreign and domestic operations are "value-at-risk"
("VAR") and event risk indicators. The VAR per portfolio is calculated on a
daily basis and based on the last three months' market movements. The interest
rate event risk indicator quantifies the maximum single week loss given current
positions. This event indicator makes use of the last five years of historical
interest rate movements. The event indicator for foreign exchange makes use of
scenario analysis. ING believes that the assumptions and methods utilized by it
are selected in such a way that the risks are conservatively measured.

ING Bank uses a variety of financial instruments to manage market risks,
both cash-based financial instruments and derivative financial instruments.

LIQUIDITY RISK

Liquidity risk is associated with ING Bank's ability to fund its
liabilities upon maturity or demand and to meet or exceed the capital
requirements of its business units. It includes both the risk of unexpected
increases in the cost of funding and the risk of not being able to liquidate a
position in a timely manner at a reasonable price.

CREDIT RISK

Credit risk arises from the possibility that borrowers and financial
counterparties may default on their obligations to ING Bank and cause ING Bank
to suffer a loss. Such obligations arise from ING Bank's lending activities, the
implicit extension of credit in its trading and investment activities, and from
its participation in payment and securities settlement transactions on its own
behalf and as agent or financial intermediary for ING Bank's clients.

ING BANK RISK MANAGEMENT

The following is a summary of ING Bank's risk management practices related
to the management of interest and foreign exchange risks, liquidity and credit
risk.

MARKET RISK

Central Limit Committee

The Central Limit Committee ("CLC") evaluates and monitors the market risk
profile of the banking activities of ING. CLC includes Executive Board members
and is chaired by ING's CFO. CLC is responsible for reviewing and controlling
the overall risk profile of the banking activities of ING by defining risk
management policies and risk management techniques, and approving trading
limits. CLC is informed at least weekly on the positions within the ING Bank's
dealing rooms. Part of the operational responsibilities of CLC is delegated to
the ING Bank Trading Risk Committee. The Trading Risk Committee approves trading
risk limit proposals up to a certain level. Proposals exceeding the limit of the
Trading Risk Committee are subject to approval by CLC. The Trading Risk
Committee includes representatives from the commercial senior management and
trading risk senior management of CIB. The Trading Risk Committee is chaired by
the general manager of the Global Risk Management Department of CIB.

Asset & Liability Committee

The banking Asset & Liability Management Committee ("ALCO") is responsible
for monitoring the maturity/repricing gaps between assets and liabilities,
establishing the liquidity limits for ING Bank and reporting to the Dutch
Central Bank. The regulatory requirements relating to ING Bank's liquidity
differ from country to country. In the Netherlands, monthly reporting takes
place in accordance with a format prescribed by the Dutch Central Bank. The
liquidity directive of the Dutch Central Bank is based on the maturity
characteristics of a bank's balance sheet components. ING Bank is well within
liquidity limits set by the Dutch Central Bank. TT&S is responsible for managing
the liquidity limits set by ALCO and at the

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same time has to ensure that the cash flows of the domestic banking operations
are appropriate. ALCO includes representatives of senior management from the
economic, commercial and financial controlling departments of the banking
operations. ALCO is chaired by ING's CFO. TT&S monitors ING Bank's cash position
on a daily basis and makes daily and monthly projections.

CREDIT RISK

All banking business units of ING have their own credit approval procedures
and credit approval bodies, with powers of approval up to specified limits,
which are set by the Executive Board. If a credit proposal exceeds the business
unit's approval authority, the proposal is submitted to Central Credit Committee
Netherlands within management centre ING Nederland ("Domestic Credit Committee")
supported by Credit Risk Management Nederland Department or the CIB Credit
Committee within management centre ING Corporate & Investment Banking
("International Credit Committee") supported by Global Risk Management
Department. If the approval authority of these committees is exceeded the credit
proposals must be submitted to the Central Credit Committee ("CCC"). All
Executive Board members of ING are members of the CCC.

ING Bank employs a "one obligor principle" such that global exposures to a
single borrower or borrower group are treated as a single total exposure for ING
Bank. As such, approval authority for individual credits within this total
exposure is delegated to the appropriate higher level credit committee and is
not within the approval power of the individual business unit. Furthermore, all
significant problem loans and troubled lending are overseen by a specialist unit
within the Credit Risk Management Nederland Department and the GRM, where the
necessary skills are concentrated to minimize the risk of losses and help to
restore, where possible, the borrowers to financial health.

The installation of credit risk management departments and credit risk
committees in the branch organization of ING Bank Nederland and the banking
business units of the management centre ING Nederland is in progress. This is
accompanied by the optimization of credit risk management information systems.

Credit Risk Management Nederland Department

The Credit Risk Management Nederland Department ("CRMN") is a support
department of the management centre ING Nederland. CRMN is responsible for
credit risk management within ING's domestic banking operations. Credit analysis
units within CRMN are organized on the basis of particular industry sectors
(such as shipping, transport, healthcare, real estate, agriculture and project
financing) in order to ensure a concentration of knowledge and experience.
Special monitoring takes place as to the quality of the management centre ING
Nederland's credit portfolio, to oversee the composition of the portfolio,
notably in terms of borrower quality, and industry. CRMN is supported by systems
such as a borrower rating system, borrower information systems and portfolio
analysis systems. Approval requirements include at least annual review of all
credits, while CRMN also conducts on-site reviews of facilities and borrowers.

CRMN supports the domestic ING Bank branch organization. CRMN is also
responsible for credit risk management within the branches of IBN and the other
banking business units of the management centre ING Nederland. The banking
business units within the Netherlands have their own credit risk committees.
Above a certain threshold the credit proposals must be submitted to the Domestic
Credit Committee where CRMN assists in the review and approval process.

Global Risk Management Department

The GRM is a support department of the management centre ING Corporate &
Investment Banking and has specific responsibility for the management of
international credit and counterparty risks within this management centre. In
addition, GRM monitors credit risks in the lending portfolios of the management
centres FSI and ING Asset Management, including the international private
banking activities booked in the latter. Furthermore, the Trading Risk
Management department unit of GRM

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manages trading risks within the business units of the management centre ING
Corporate & Investment Banking.

While the responsibility for individual client relationships (and the
associated credit risks) rests with commercial officers, day to day credit
management is carried out by dedicated teams in each business unit, with
reporting lines clearly separated from the commercial personnel. Credit approval
requirements including (at least) annual review of all credits as well as
regular monitoring and reporting procedures employ credit evaluation techniques
commensurate with the size and risk profile of the credits. Specifically, a
formal credit rating system is in place such that the amount of approval
authority delegated to business units is determined not simply by the size of
the credit but also by the quality of the borrower and the associated
collateral. GRM also conducts on-site reviews.

Within GRM there is also a specialist unit, which is responsible for the
management of counterparty risk (banks and certain non-bank financial
institutions). This unit is, inter alia, responsible for the processing of limit
requests through to the relevant credit committees for the majority of the
bank's counterparty clients worldwide, although some limited delegation of
approval authority exists for certain business units. This unit is also
responsible for ensuring the bank's capability to monitor global exposure to
counterparties. In this regard, a considerable investment in systems has been
and continues to be made.

As an international bank specializing in business within emerging markets,
special attention is paid to the management of exposures to individual
countries, with GRM managing country limits established by CCC. Careful
attention is paid to the quality of ING Corporate & Investment Banking's credit
portfolio and a monitoring capability has been established to oversee the
composition of the portfolio. While GRM considers the portfolio to be adequately
diversified at present, limits are set by the International Policy Committee for
certain industry sectors in order to maintain the desired level of risk
diversification.

INTEREST RATE RISK IN BANKING ACTIVITIES

Interest rate risk arises from ING's banking activities in all four
management centres: ING Nederland, FSI, ING Corporate & Investment Banking and
ING Asset Management. Interest rate risk is measured and managed in ING's
trading activities as well as in its non-trading activities.

INTEREST RATE RISK FROM TRADING ACTIVITIES

Interest rate risk from trading activities in ING Bank's foreign and
domestic operations is managed and overseen by the Trading Risk Management
Department. Key control variables are VAR and event risk. These indicators give
a comprehensive and concise picture of overnight risk or loss potential on a
97.5% statistical confidence basis. In its trading and investment portfolio, ING
employs the VAR methodology to estimate potential losses that could arise from
adverse developments in market conditions. The VAR figures per portfolio are
calculated per trading portfolio on a daily basis. The event risk indicator
quantifies the maximum single week loss based on the last five years of
historical interest rate movements. ING believes that the assumptions and
methods are chosen in such a way that the risks are conservatively measured.
Nonetheless, market movements are unpredictable and no assurance can be given
that actual results in other portfolios or periods will not differ materially
from the potential outcome predicted by VAR.

At December 31, 1996 the VAR was NLG 27 million. The average VAR in the six
months ended December 31, 1996 was NLG 40 million, and ranged from a high of NLG
45 million to a low of NLG 27 million over such period.

INTEREST RATE RISK FROM NON-TRADING ACTIVITIES

ING's non-trading interest rate risk is primarily present in its domestic
banking activities. The non-trading interest rate risk is managed by, on a
centralized basis, ALCO, which is chaired by the ING CFO. On a monthly basis,
the Asset & Liability Management Department reports to ALCO on the structural

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227

interest mismatch position of ING Bank and changes in the maturity profile of
ING Bank's assets and liabilities. The amount of permitted mismatch is subject
to limits set by the Executive Board and corrective action is taken where
necessary.

An internal transfer pricing system is used to allocate funding to
operating units consistent with the structure of business opportunities that
arise in their normal course of business. As a result, interest rate risk is
concentrated and accumulated at the centralized ALCO level. Incremental new
activity is initiated by the centralized treasury management to adjust risk
positions to more desirable levels within overall risk limits. Incremental
activity consists of investment portfolio transactions, the issuance of new debt
obligations or the use of derivative financial instruments. The primary
derivatives utilized are interest rate swap agreements. Derivatives used for
risk management purposes generally are not recorded in the financial statements
under Dutch GAAP except for the recording of periodic payments as an adjustment
to net interest income and currency transaction amounts. Under U.S. GAAP,
interest rate risk management derivatives are required to be carried at fair
value with changes in fair value recorded in income currently, since the
derivatives are not specifically contemporaneously designated as hedges of
specific assets, liabilities or pools of similar items. See Note 7 of Notes to
the Consolidated Financial Statements.

The following table indicates the repricing profile of ING Bank's domestic
non-trading assets, liabilities and off-balance sheet exposures at December 31,
1996, excluding those of ING Lease, ING Vastgoed (real estate) and Crediet en
Effecten Bank. Foreign operations are not included.

INTEREST RATE SENSITIVITY GAP
--------------------------------------------------------------------------------
OVER
THREE OVER SIX OVER ONE
MONTHS MONTHS YEAR BUT
NOT MORE BUT NOT BUT NOT NOT MORE NON-
THAN THREE MORE THAN MORE THAN THAN OVER FIVE INTEREST
MONTHS SIX MONTHS ONE YEAR FIVE YEARS YEARS BEARING TOTAL
---------- ---------- --------- ---------- --------- ------- -------
(NLG MILLIONS)

ASSETS:
Short term bills.......... 3,792 576 111 3 -- -- 4,482
Banks..................... 8,850 3,244 1,442 723 206 -- 14,465
Loans & advances to
customers............... 26,611 4,256 8,491 44,263 25,008 -- 108,629
Debt securities........... 2,875 461 728 5,706 25,113 -- 34,883
Other assets.............. 1,775 374 662 2,709 1,289 3,553 10,362
------- ------- ------- ------- ------ ------- -------
43,903 8,911 11,434 53,404 51,616 3,553 172,821
LIABILITIES:
Banks..................... 8,336 1,682 837 141 106 -- 11,102
Customer accounts......... 96,209 1,156 2,884 10,798 5,186 15,146 131,379
Debt securities........... 1,779 110 159 1,511 4,368 -- 7,927
Other liabilities......... 6,104 -- -- 24 3,085 -- 9,213
Subordinated loans........ 604 715 33 1,176 4,443 -- 6,971
------- ------- ------- ------- ------ ------- -------
113,032 3,663 3,913 13,650 17,188 15,146 166,592
------- ------- ------- ------- ------ ------- -------
Net assets (Net
liabilities)............ (69,129) 5,248 7,521 39,754 34,428 (11,593) 6,229
------- ------- ------- ------- ------ ------- -------
Off-balance sheet
instruments............. (582) 9,447 (2,699) (11,322) 5,156 -- n.a.
------- ------- ------- ------- ------ ------- -------
Interest rate repricing
gap..................... (69,711) 14,695 4,822 28,432 39,584 (11,593) n.a.
------- ------- ------- ------- ------ ------- -------
Cumulative interest rate
repricing gap........... (69,711) (55,016) (50,194) (21,762) 17,822 6,229 n.a.
======= ======= ======= ======= ====== ======= =======

While the foregoing table is based upon the contractual repricing intervals
of ING Bank's non-trading related domestic assets and liabilities and
derivatives, ING's internal risk analysis takes into account other factors, such
as historical price behavior and the expected withdrawal characteristics of
customer demand accounts, which appear as liabilities with contractual
maturities of three months or less. ING also

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228

utilizes the value-at-risk (VAR) methodology in analyzing the interest rate risk
in its domestic non-trading operations. For the year 1996, the VAR at month-end
for such operations averaged NLG 67 million, and ranged from a high of NLG 85
million to a low of NLG 42 million.

DERIVATIVES

Derivative financial instruments are contracts whose value is derived from
underlying financial instrument(s) or indices inherent in the contract.
Derivatives are subject to the same type of market, credit, liquidity and
operational risks as cash-based financial instruments and are managed by ING in
a similar manner. ING Insurance uses derivatives to hedge interest rate and
currency risks associated with specific assets or liabilities or certain
anticipated investment transactions. ING Insurance does not use derivatives for
trading purposes. ING Bank is an active participant worldwide in derivatives
markets on behalf of clients as well as for proprietary positions. ING Bank uses
derivatives for both trading and risk management purposes. The primary
instruments used include swaps, forward rate agreements, futures, options and
combinations thereof. Derivatives are important risk management tools for ING
Bank's customers and ING Bank itself. Derivatives used for risk management of
ING's banking activities are used to hedge specific risks of certain designated
assets or liabilities, and also in place of cash-based financial instruments.

The following is a detailed description of the types of derivatives
utilized by ING.

Interest rate contracts. Interest rate contracts include interest rate
swaps, forward rate agreements, futures and interest rate options, caps and
floors. An interest rate swap is an agreement between two parties to exchange
fixed and floating rates of interest by means of periodic payments based upon
notional principal amounts and the interest rates defined in the contract. In a
forward rate agreement, two parties agree to a future settlement of the
difference between an agreed and a future interest rate applied to a notional
principal amount. The settlement is the present value of the payment that would
otherwise be made at the end of that period. Interest rate futures are
agreements to purchase or sell a standard amount of a specified fixed income
security or time deposit at an agreed interest rate on or before a specified
date. Interest rate options are contracts in return for a premium payment that
provide the buyer with the right, but not the obligation, to purchase or to sell
a financial instrument at a specified price or interest rate on or before a
specified date. Interest rate caps and floors (which are a type of interest rate
option) obligate the seller to compensate the buyer for changes in interest
rates respectively above or below the cap or floor reference rate, applied to
the notional principal amount, while the collar is a combination of a cap and a
floor.

Currency contracts. Currency contracts include forward foreign exchange
contracts, cross currency swaps, currency options and similar instruments.
Forward foreign exchange contracts are agreements to purchase or sell fixed
amounts of currency at agreed rates of exchange on a fixed date. Cross currency
swaps are agreements to exchange, and on termination of the swap re-exchange,
principal amounts denominated in different currencies. Cross currency swaps may
involve the exchange of interest payments in one specific currency for interest
payments in another specified currency at specified future dates. Currency
options give the buyer the right, but not the obligation, to purchase or sell a
fixed amount of a currency at a specific exchange rate on or before a future
date. With a written currency option there is the obligation to sell or buy a
fixed amount of a currency at a specific exchange rate on or before a future
date, if the option is exercised. As compensation for writing such an option,
the option writer generally receives a premium at the start of the option
period.

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229

The outstanding notional amounts of ING's derivative contracts at December
31, 1995 and 1996 were as follows.

DECEMBER 31,
-------------------
1996 1995
------- -------
(NLG MILLIONS)

INTEREST RATE CONTRACTS
Over the counter(1)
Swaps................................................ 285,715 241,855
Forward contracts.................................... 72,612 38,840
Options.............................................. 16,496 22,886
Listed(2)
Options.............................................. 5,332 488
Futures.............................................. 18,367 18,578
CURRENCY CONTRACTS
Over the counter(1)
Swaps............................................. 17,653 9,747
Forward contracts................................. 140,872 112,747
Options........................................... 11,090 5,153
Other............................................. -- 916
Listed(2)
Options........................................... 89 2
Futures........................................... 2,528 --
OTHER CONTRACTS
Over the counter(1).................................... 17,824 2,241
Listed(2).............................................. 4,315 146
------- -------
TOTAL.................................................. 592,893 453,599

- ---------------
(1) Over the counter derivatives are not traded on a recognized exchange, but
generally may be terminated or assigned with the consent of the original
counterparty. In general, the terms and conditions of these contracts are
negotiated with counterparties to meet their individual requirements.

(2) Listed derivatives consists of exchange-traded financial derivatives, which
generally consist of standardized contracts.

Credit exposure. Counterparty exposure for derivatives represents the
amount of loss that ING would suffer if every counterparty in derivative
contracts to which ING is exposed were to default at once. This exposure does
not represent the expected loss amounts, or the costs to replace the derivative
contracts with respect to interest and foreign exchange rates in effect at a
certain moment. The total credit exposure is calculated as the sum of the
replacement cost and an estimate of the potential increase in the replacement
cost over the remaining life of the instrument should market rates change.

ING manages its credit exposure to derivatives as part of the overall
extension of credit to individual counterparties, subject to the same approvals,
limits, and monitoring procedures it uses for other activities. ING attempts to
limit the likelihood of realizing potential losses from counterparty failure by
entering into derivative transactions primarily with banks and other commercial
entities which are highly rated.

The following table presents the aggregate notional amounts of ING's
derivative contracts outstanding as of December 31, 1996 and related credit
equivalents and weighted lending equivalents by categories of counterparties.
The weighted lending equivalent is calculated by weighting the credit

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230

equivalent by a factor which corresponds to the degree of risk of the
counterparty established in accordance with the standards of the Dutch Central
Bank.

NOTIONAL CREDIT WEIGHTED LENDING
AMOUNT EQUIVALENT EQUIVALENT
-------- ---------- ----------------
(NLG MILLIONS)

Counterparties
Government......................................... 1,689 233 --
Banks.............................................. 498,604 12,782 2,612
Other.............................................. 92,600 2,168 1,083
------- ------ -----
592,893 15,183 3,695

Whenever ING assumes a trading position by means of a currency contract or
interest rate contract, it is exposed to market risk from fluctuations in the
underlying exchange rate or interest rate. The maximum level of risk applicable
to each banking business unit is established in accordance with policies adopted
by the Trading Risk Committee.

The bulk of ING's derivatives business is conducted within the scope of its
banking activities. The total notional amount of derivatives used for ING's
insurance activities was NLG 17 billion at December 31, 1996, or less than 3% of
the total notional amount for ING, and such derivatives are only used for
hedging specific assets or liabilities.

The Dutch Central Bank requires a minimum capital adequacy of 8% of the
weighted lending equivalent of the derivatives used by ING Bank. For the
derivatives portfolio at December 31, 1996 this equaled NLG 296 million, which
was less than 1% of ING equity at such date.

ING does not generally require collateral for currency contracts or
interest rate contracts with banks and other financial institutions. Exchange
traded futures and options are subject to initial and daily variation margin
requirements of the stock exchange on which these instruments are traded.

The notional amounts of ING's derivative contracts used for trading and
derivatives used for non-trading at December 31, 1996 is as follows.

TRADING NON-TRADING TOTAL
------- ----------- -------
(NLG MILLIONS)

Interest rate contracts................................... 246,028 152,494 398,522
Currency contracts........................................ 40,248 131,984 172,232
Other..................................................... 19,376 2,763 22,139
------- ------- -------
305,652 287,241 592,893

Contracts for trading purposes are undertaken for ING Bank's own account
and to service its corporate customer base, including designing structured
products to meet the specific requirements of customers. Transactions undertaken
for trading purposes are marked to market (fair value) and the change in the
market value is recognized in the income statement as "result from financial
transactions".

Derivatives held for trading purposes. The notional amounts and maturities
of trading derivatives entered into with third parties at December 31, 1996 are
shown below.

1 YEAR 5 YEARS OR LESS OVER 5
OR LESS BUT OVER 1 YEAR YEARS TOTAL
------- --------------- ------ -------
(NLG MILLIONS)

Interest rate contracts...................... 96,189 122,516 27,323 246,028
Foreign exchange contracts................... 30,430 7,276 2,542 40,248
Other contracts.............................. 18,472 904 0 19,376
------- ------- ------ -------
145,091 130,696 29,865 305,652

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231

Derivatives held for non-trading purposes. For non-trading interest rate
swaps, the notional amount of fixed pay swaps and the weighted average variable
receive and fixed pay rates by maturity at December 31, 1996 were as follows.

1 YEAR 5 YEARS OR LESS OVER 5
OR LESS BUT OVER 1 YEAR YEARS TOTAL
------- --------------- ------ ------
(NLG MILLIONS)

Pay-fixed swaps notional amount................ 13,231 36,034 17,238 66,503
Average receive percentage..................... 3.31% 3.93% 3.57% 3.72%
Average pay rate............................... 6.01% 6.23% 7.05% 6.40%

For non-trading interest rate swaps, including cross currency interest rate
swaps, the notional amount of fixed receive swaps and the weighted average fixed
receive and variable paid rates by maturity at December 31, 1996 were as
follows.

1 YEAR 5 YEARS OR LESS OVER 5
OR LESS BUT OVER 1 YEAR YEARS TOTAL
------- --------------- ------ ------
(NLG MILLIONS)

Receive fixed swaps notional amount............ 16,758 22,264 21,295 60,317
Average receive percentage..................... 6.30% 6.90% 6.25% 6.50%
Average pay rate............................... 5.11% 4.08% 3.59% 4.19%

INVESTMENTS

GENERAL

At December 31, 1996, 1995 and 1994 funds invested by ING totalled NLG 188
billion, NLG 154 billion and NLG 138 billion, respectively.

The table below shows the land and buildings and securities investments of
ING by category, valued according to Dutch GAAP and including for 1996, 1995,
and 1994 land and buildings wholly or partially in use by ING or its
subsidiaries, valued at NLG 3,115 million in 1996, NLG 2,994 million in 1995 and
NLG 3,244 million in 1994.

ING's total land and buildings and securities investments were allocated to
its insurance and banking activities as follows for the periods indicated.

AT DECEMBER 31,
-------------------------------------------------------
1996 1995 1994
--------------- --------------- ---------------
NLG % NLG % NLG %
------- --- ------- --- -------- ---
(NLG MILLIONS)

Insurance activities.................. 151,988 79 129,059 82 112,500 81
Banking activities.................... 41,507 21 28,330 18 25,777 19
Eliminations.......................... (5,026) (3,631) --
------- --- ------- --- ------- ---
Total....................... 188,469 100% 153,758 100% 138,277 100%
======= === ======= === ======= ===

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232

The analysis by category of investments is as follows.

Land and buildings(1)................. 10,749 6 9,990 7 10,059 7
Shares and convertible
debentures(2)....................... 26,390 14 19,754 13 16,233 12
Fixed-interest securities............. 127,136 68 103,313 67 92,381 67
Interests in investment pools of the
insurance operations................ 617 -- 720 -- 679 --
Deposits with insurers................ 58 -- 52 -- 46 --
Investments for risk of policyholders
and investments of annual life
funds............................... 23,519 12 19,929 13 18,879 14
------- --- ------- --- ------- ---
Total....................... 188,469 100% 153,758 100% 138,277 100%
======= === ======= === ======= ===

- ---------------
(1) Including commuted ground rents.

(2) Shares and convertible debentures include some shareholdings representing
more than 20% of other issuers' equity securities that are treated as
investments and not as participating interests, and exclude shares in ING
Groep N.V. held by Group companies.

The balance sheet value of shares and convertible debentures represents
market value, and includes revaluations of NLG 13,095 million in 1996, NLG 8,133
million in 1995 and NLG 5,648 million in 1994, the purchase price amounting to
NLG 13,295 million in 1996, NLG 11,622 million in 1995 and NLG 10,585 million in
1994. For a description of ING's investment accounting policies, see Note
1.6.2.4 of Notes to the Consolidated Financial Statements.

The balance sheet value of listed and unlisted shares and convertible
securities held by ING Insurance and ING Bank is as follows.

1996 1995 1994
------- ------- -------
(NLG MILLIONS)

Shares and convertible debentures
Insurance operations
Listed....................................................... 27,255 19,594 15,039
Unlisted..................................................... 1,571 1,582 986

Banking operations
Listed....................................................... 266 85 75
Unlisted..................................................... 52 134 133

Listed shares and convertible debentures include shares, related options
and convertible debentures traded over the counter and on the NASDAQ National
Market in the United States.

Investments for risk of life policyholders and investments of annual life
funds include separate investment pools held for the account and risk of
policyholders, investments held in stock deposits with contractual sharing of
results and the investments of the annual funds of the annual life fund
operations.

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233

INVESTMENTS OF ING'S INSURANCE OPERATIONS

The analysis by category of investments of ING's insurance operations is as
follows.

1996 1995 1994
------- ------- -------
(NLG MILLIONS)

Land and buildings(1)....................................... 8,924 8,165 8,168
Shares and convertible debentures:
listed.................................................... 27,255 19,594 15,039
unlisted.................................................. 1,571 1,582 986
------- ------- -------
Total Shares and convertible debentures........... 28,826 21,176 16,025
Fixed-interest securities:
Debentures and other interest-earning securities
listed(2).............................................. 33,448 28,557 24,506
unlisted............................................... 9,307 6,675 4,526
Private loans(3).......................................... 20,306 19,426 16,727
Mortgage loans............................................ 23,816 21,495 20,249
Other fixed-interest investments:
policy loans........................................... 1,890 1,655 1,642
deposits with credit institutions...................... 710 328 179
loans to self-employed professionals................... 512 473 452
Other financial investments............................... 55 408 422
------- ------- -------
Total fixed-interest securities................... 90,044 79,017 68,703
Investments in investment pools of the insurance
operations................................................ 617 720 679
Deposits with insurers...................................... 58 52 46
Investments for risk of policyholders and investments of
annual life funds:
Land and buildings........................................ 225 203 208
Shares.................................................... 3,307 2,126 2,873
Fixed-interest securities................................. 18,590 16,714 14,671
Other investments......................................... 1,397 886 1,127
------- ------- -------
Total of investments for risks of policyholders... 23,519 19,929 18,879
Total investments................................. 151,988 129,059 112,500
======= ======= =======

- ---------------
(1) Including commuted ground rents.

(2) The balance sheet value of listed securities in 1996 and in 1995 includes
NLG 617 million and NLG 529 million in respect of listed securities issued
by ING.

(3) See Note 2.4 of Notes to the Consolidated Financial Statements.

The fair value of the investments in fixed-interest securities of ING's
insurance activities at Decem-
ber 31, 1996 and 1995 amounted to.

1996 1995
------ ------
(NLG MILLIONS)

Debentures and other interest-earning securities......... 45,683 38,280
Private loans............................................ 22,616 20,859
Mortgage loans........................................... 25,170 21,664
Other fixed-interest investments......................... 3,147 2,823
------ ------
Total.......................................... 96,616 83,626
====== ======

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234

The following table sets forth the consolidated investment income of ING's
insurance operations for the years indicated.

1996 1995 1994
------------------- ------------------- -------------------
PRE-TAX PRE-TAX PRE-TAX
INCOME YIELD(1) INCOME YIELD(1) INCOME YIELD(1)
------ -------- ------ -------- ------ --------
NLG % NLG % NLG %
------ -------- ------ -------- ------ --------
(NLG IN MILLIONS)

Land and buildings............... 803 9.4 788 9.6 762 9.0
Fixed-interest securities(1)..... 6,994 8.2 6,191 8.2 5,974 8.8
Shares and convertible
debentures..................... 961 3.8 778 4.1 655 3.6
Investments for the risk for
policyholders and investments
of annual life funds........... 2,315 1,848 811
------ ----- -----
Total.................. 11,073 9,605 8,202

- ---------------
(1) Pre-tax yield is calculated using interest, rental, dividend and other
income received for each period, divided by the average of beginning and
year-end balances in related assets.

Insurance Investment Strategy

ING Insurance's overall investment strategy is to maximize long-term total
return on its investments while remaining within the risk parameters set by the
Executive Board. The risk parameters relate primarily to the quality of ING
Insurance's investments and the matching of its assets and liabilities. It is
ING Insurance's policy to closely match the maturities and currencies of its
assets and liabilities. The matching of maturities is monitored by extensive
duration and cash flow analyzes and is supervised by actuarial, risk control and
investment committees. The matching of the currencies of ING Insurance's assets
to the currencies of its insurance liabilities is monitored by ING Asset
Management. Each of ING's insurance company subsidiaries must also operate and
manage its investments in compliance with applicable local laws and regulations.
IIM and ING Real Estate manage 81% and 6%, respectively, of ING Insurance's
total investments, with the remaining 13% consisting primarily of Dutch
residential mortgage loans managed directly by the domestic operating companies
of ING Insurance. IIM works closely with ING's insurance company subsidiaries,
particularly in the areas of asset and liability management and product
development.

The tax treatment of asset categories in the countries in which ING
conducts insurance activities is also taken into account. For example, under
Dutch tax law, a Dutch insurance company holding 5% or more of the equity
securities of any Dutch company is not subject to corporate taxation on the
income or capital gains from such equity securities. This partially accounts for
the relatively high percentage of ING Insurance's investment portfolio invested
in equity securities of Dutch companies. The total return on other equity
investments generally is fully taxable.

Fixed-interest securities constitute approximately 70% of ING Insurance's
investment portfolio. On average, ING Insurance's NLG 107 billion fixed-interest
securities portfolio at December 31, 1995 has a rating comparable to a Standard
& Poor's rating of AA- , while non-investment-grade securities constitute less
than 1% of the portfolio. The credit quality of ING Insurance's fixed-interest
securities portfolio has been very strong; less than 0.1% of the face amount of
the portfolio was written off in each of 1996 and 1995. In some countries,
mainly the Netherlands and the United States, ING also participates in the
mortgage market. In the Netherlands it consists primarily of mortgages on
residential housing. In the United States, such participation is mainly in the
form of investing in mortgage-backed securities with a guarantee from a
governmental or quasi-governmental body. At December 31, 1996 and 1995, the
Dutch residential mortgages held by ING Insurance totaled NLG 19.4 billion and
NLG 17.8 billion, respectively. At December 31, 1996 and 1995, the
mortgage-backed securities held by ING Insurance's United States life operations
totaled NLG 5.6 billion and NLG 5.0 billion, respectively. The credit quality of
ING

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235

Insurance's mortgage and mortgage-backed securities portfolio has historically
been very strong; less than 0.1% of the face amount of the portfolio was written
off in each of 1996 and 1995.

ING Insurance is subject to minimum solvency ratios imposed by the Dutch
Insurance Board. It is ING Insurance's policy to have solvency surpluses that
are sufficient to sustain simultaneous substantial declines in stock market
prices and real estate valuations without falling below the Dutch Insurance
Board's minimum solvency ratios. For these purposes, a decline of 40% from the
prior year-end's book value is considered substantial in the case of stock
prices, while for real estate a decline of 30% from the prior year-end's book
value is considered substantial.

ING Insurance uses derivative financial instruments to reduce its exposure
to market and interest rate risk on its invested assets, as well as to improve
asset/liability management. ING Insurance is exposed to credit-related losses in
the event of nonperformance by counterparties to financial instruments. However,
such nonperformance is not expected because, consistent with general ING
policies, ING Insurance utilizes highly rated counterparties, establishes risk
control limits, and maintains ongoing monitoring procedures.

INVESTMENTS OF ING'S BANKING OPERATIONS

The following table shows the balance sheet value under Dutch GAAP of the
investments of ING's banking operations.

DECEMBER 31,
-----------------------------
1996 1995 1994
------- ------- -------
(NLG MILLIONS)

Dutch government....................................... 8,720 7,538 7,049
German government...................................... 15,409 5,887 8,488
Central banks.......................................... 2,698 4,655 1,779
Other governments...................................... 8,078 3,211 2,023
Corporate debt securities
Banks and financial institutions..................... 1,801 1,916 2,541
Other corporate debt securities...................... 498 860 1,085
U.S. Treasury and other
U.S. Government agencies............................... 302 279 15
Other debt securities.................................. 1,858 1,940 698
------ ------ ------
Total debt securities............................. 39,364 26,286 23,678
Shares and convertible debentures...................... 318 219 208
Land and buildings(1).................................. 1,825 1,825 1,891
------ ------ ------
Total........................................ 41,507 28,330 25,777
====== ====== ======

- ---------------
(1) Including commuted ground rents.

Banking Investment Strategy

ING's investment strategy for its investment portfolio related to banking
activities is formulated by ALCO. The exposures of the investments to market
rate movements are managed by modifying the asset and liability mix, either
directly or through the use of derivative financial products including interest
rate swaps, futures, forwards and purchased option positions such as interest
rate caps, floors and collars. See "-- Introduction -- ING Bank Risk
Management".

The investment portfolio related to banking activities primarily consists
of fixed-interest securities (95% of the investment portfolio in 1996). More
than 99% of the land and buildings owned by ING Bank are wholly or partially
occupied by ING companies.

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236

Portfolio Description

The following table analyzes the maturities and weighted average yields of
debt securities of ING's banking operations at December 31, 1996.

BETWEEN 1 YEAR
1 YEAR OR LESS AND 5 YEARS
--------------------------- ---------------------------
BOOK VALUE YIELD(1) BOOK VALUE YIELD(1)
-------------- -------- -------------- --------
(NLG MILLIONS) (NLG MILLIONS)

Dutch government........................ 929 3.1% 1,392 5.7%
German government....................... 11 4.5% 1,962 4.9%
Central banks........................... 2,520 6.1% 80 5.4%
Other governments....................... 841 14.4% 3,820 7.4%
Banks and financial institutions........ 290 9.0% 1,223 6.9%
Corporate debt securities............... 170 4.5% 175 5.4%
U.S. Treasury and other U.S. government
agencies.............................. 277 11.3% 8 --
Other debt securities................... 819 5.5% 370 9.0%
----- -----
Total......................... 5,857 7.7% 9,030 5.1%

BETWEEN 5 AND 10 YEARS OVER 10 YEARS
----------------------- -----------------------
BOOK VALUE YIELD(1) BOOK VALUE YIELD(1)
---------- -------- ---------- --------

Dutch government............................. 6,520 5.8% 34 7.7%
German government............................ 13,677 6.0% -- --
Central banks................................ 62 6.6% 30 6.5%
Other governments............................ 1,445 8.2% 1,753 7.6%
Banks and financial institutions............. 153 8.5% 143 6.1%
Corporate debt securities.................... 27 6.9% 124 5.1%
U.S. Treasury and other U.S. government
agencies................................... 7 6.7% 4 6.8%
Other debt securities........................ 352 5.9% 194 3.6%
------ ---- ----- ----
Total.............................. 22,243 6.1% 2,282 6.8%
====== ==== ===== ====

TOTAL
WITHOUT MATURITY ---------------------------------------
--------------------- PREMIUM/ BALANCE SHEET
BOOK VALUE YIELD(1) BOOK VALUE (DISCOUNT) VALUE
---------- -------- ---------- ---------- -------------

Dutch government...................... 8,875 155 8,720
German government..................... 15,650 241 15,409
Central banks......................... 2,692 (6) 2,698
Other governments..................... 7,859 (219) 8,078
Banks and financial institutions...... 1,809 8 1,801
Corporate debt securities............. 496 (2) 498
U.S. Treasury and other U.S.
government agencies................. 296 (6) 302
Other debt securities................. 6 8.0% 1,741 (117) 1,858
-
---- ------ ---- ------
Total....................... 6 8.0% 39,418 54 39,364
= ==== ====== ==== ======

- ---------------
(1) Since substantially all investment securities held by the banking operations
of ING are taxable securities, the yields are on a tax-equivalent basis.

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237

At December 31, 1996, ING also held the following securities for the
banking operations, which exceeded 10% of shareholders' funds.

BOOK MARKET
VALUE VALUE
------ ------
(NLG MILLIONS)

German government...................................... 15,650 15,948
Dutch government....................................... 8,875 9,065

COMPETITION

There is substantial competition in the Netherlands and the other countries
in which ING does business for the types of insurance, commercial and investment
banking and other products and services provided by ING. Such competition is
more pronounced in ING's more mature markets of the Netherlands, the Rest of
Europe, the United States, Canada and Australia than in the so-called "emerging
markets". In recent years, however, competition in emerging markets has
increased as insurance and banking industry participants from more developed
countries have sought to establish themselves in markets which are perceived to
offer higher growth potential, and as local institutions have become more
sophisticated and competitive and have sought alliances, mergers or strategic
relationships with certain of ING's competitors.

In the Netherlands, which is the largest national market for ING's
insurance and banking operations, a national policy historically favoring open
markets and the presence of large domestic competitors in both the insurance and
banking sectors has resulted in intense competition for virtually all of ING's
products and services. In addition, the Dutch market is a mature market and one
in which ING already maintains significant market shares in most lines of
business. Management believes, however, that notwithstanding these factors,
further growth in the Dutch markets in which ING is present will arise in coming
years as the government withdraws from social security and various other
programs and the coverages and services provided thereunder are shifted to the
private sector. In this regard, the four distribution channels maintained by ING
Nederland allow it to allocate resources to different sectors of the Dutch
market as growth opportunities arise, and in management's view provide ING with
significant competitive advantages.

Competition with respect to the products and services provided by ING in
both developed and emerging markets is based on many factors, including name
recognition, scope of distribution systems, customer service, products offered,
financial strength, investment performance in the case of investment-linked
insurance products and asset management services, and price. Management believes
its major competitors are the larger Dutch, other European, United States and
Japanese commercial and investment banks, insurance companies and asset
management and other financial services companies.

RATINGS

Each of ING Groep N.V.'s, ING Verzekeringen N.V.'s and ING Bank N.V.'s
long-term senior debt was rated AA- by Standard & Poor's in 1996. The "AA"
rating is the second highest of the seven ratings assigned by Standard & Poor's,
which range from "AAA" to "C". Ratings from AA to B may be modified by the use
of a plus or minus sign to show relative standing of the issuer within those
rating categories.

ING Bank N.V.'s long-term debt was rated AA by IBCA, Inc. The "AA" rating
is the second highest of the nine ratings assigned by IBCA, Inc. which range
from "AAA" to "C". Ratings from AA to B may be modified by the use of a plus or
minus sign to show relative standing of the issuer within those rating
categories.

ING Verzekeringen N.V.'s short term debt was rated A1+ by Standard & Poor's
and Prime 1 by Moody's in 1996. ING Bank's short term debt was rated A1+ by
Standard & Poor's and Prime 1 by Moody's in 1996. The "A1+" rating is the
highest possible of the seven ratings assigned by Standard & Poor's, which range
from "A1+" to "D". The "Prime 1" rating is the highest possible of the three
ratings assigned by Moody's, which range from "Prime 1" to "Not Prime".

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On January 1, 1997, ING's U.S. insurance subsidiaries, Security Life of
Denver, Life of Georgia, Southland Life, Columbine Life, First ING Life of New
York and Midwestern United, were awarded AA claims-paying ability ratings by
Standard & Poor's. Standard & Poor's states that the "AA" rating is assigned to
those companies which, in its opinion, offer excellent financial security. The
"AA" rating is the second highest of the eight claims-paying ratings assigned by
Standard & Poor's, which range from "AAA" (Superior) to "R" (Regulatory action).

On January 1, 1997, ING's U.S. insurance subsidiaries, Security Life of
Denver, Life of Georgia and Southland, were awarded an A+ rating by A.M. Best
and Midwestern United and The Netherlands Insurance Companies were awarded an A
rating by A.M. Best. A.M. Best states that the "A+" rating is assigned to those
companies which, in its opinion, have demonstrated superior overall performance
and have a very strong ability to meet their obligations to policyholders over a
long period of time and that the "A" rating is assigned to those companies
which, in its opinion, have demonstrated excellent overall performance and have
an excellent ability to meet their obligations to policyholders over a long
period of time. The "A+" rating is the second highest of 15 ratings assigned by
A.M. Best, which range from "A++" (Superior) to "F" (In Liquidation).

None of the foregoing ratings is an indication of the historic or potential
performance of ING's stock and should not be relied upon with respect to making
an investment in ING Groep N.V.'s Ordinary Shares, Bearer Receipts or ADSs.

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REGULATION AND SUPERVISION OF ING BUSINESSES

GENERAL

The insurance, banking, asset management and broker dealer businesses of
ING are subject to detailed, comprehensive regulation in all the jurisdictions
in which ING does business. In addition, certain European Community ("EC")
directives discussed more fully below have had and will have a significant
impact on the regulation of the insurance and banking industries in the EU as
such directives are implemented through legislation adopted within each member
state, including the Netherlands.

A group of companies in the Netherlands may be engaged in both insurance
and banking, although direct mergers between banking and insurance companies are
not permitted. The Dutch Central Bank and the Insurance Supervisory Board
(Verzekeringskamer), in consultation with the Ministry of Finance and with
representatives of the banking and insurance industries, have entered into a
protocol for the purpose of jointly regulating groups with interests in both
banks and insurance companies (the "Protocol"). The first Protocol became
effective on January 1, 1990. The presently effective Protocol was adopted by
the Dutch Central Bank and the Insurance Supervisory Board on January 8, 1997.
In a group of companies consisting of at least one bank and one insurance
company (a "Mixed Group"), the banks continue to be regulated by the Dutch
Central Bank and the insurers continue to be regulated by the Insurance
Supervisory Board. ING Groep N.V., as the holding company of a Mixed Group in
which banking and insurance operations account for a considerable proportion of
total operations (a "Mixed Financial Group"), must furnish financial information
to the Insurance Supervisory Board and the Dutch Central Bank twice per year,
including information as to (1) equity of the banks, (2) the solvency margins of
the insurance companies, (3) capital, reserves, and subordinated loans of the
other subsidiary companies and (4) information as to the solvency of ING on a
consolidated basis, and must state the investments, loans, and comparable
undertakings (except for insurance agreements) by each bank or insurance company
within ING, in respect of other companies in ING. See "-- Insurance -- The
Netherlands" and "-- Banking -- Netherlands Regulation". The Dutch Central Bank
and the Insurance Supervisory Board meet periodically to monitor holding
companies of a Mixed Financial Group and will contact one another when a
reporting institution encounters difficulties.

ING Groep N.V. and its subsidiaries are in compliance in all material
respects with the applicable banking and insurance regulations and
capitalization and solvency requirements of each applicable jurisdiction.

INSURANCE

THE NETHERLANDS

Insurance companies in the Netherlands are supervised by the Dutch
Insurance Supervisory Board under the mandate of the Insurance Companies
Supervision Act of 1993 (the "Act") (Wet Toezicht Verzekerings-bedrijf). Under
this Act, ING Insurance's life and non-life subsidiaries in the Netherlands are
required to file detailed annual reports. Such reports are audited by ING
Insurance's independent external auditors and include balance sheets, profit and
loss statements, actuarial statements, detailed descriptions of real estate,
security ownership, mortgages, guarantees granted and received, and private
placement loans. Dutch insurance companies are initially licensed by the
Insurance Supervisory Board and then monitored closely through annual filings.
The authorization granted by the Insurance Supervisory Board stipulates the
class or classes of business which an insurer may write, and is required for
every proposed new class of business. In addition, the Insurance Supervisory
Board may require an insurer to submit any other information the Insurance
Supervisory Board requests and may conduct an audit at any time. Generally, the
Insurance Supervisory Board performs an audit every five years. The Insurance
Supervisory Board is not empowered to intervene in the running of an insurance
company, but can make recommendations with regard to its management. If these
recommendations are not followed, the Insurance Supervisory Board can publish
them and, under certain circumstances, thereafter withdraw the license of the
insurer.

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By law, Dutch life insurance companies are required to maintain a
shareholders' equity level of not less than 5% of actuarial reserves. The
required shareholders' equity level for Dutch non-life insurers is the greater
of two calculations, one based on premiums and one on claims. The former is
based on 16% of gross premiums for the year, the latter is based on 23% of a
three-year average of gross claims. As of December 31, 1996, the shareholders'
equity of ING's Dutch insurance subsidiaries substantially exceeded these
minimum standards and amounted to NLG 19.3 billion, or 31% of actuarial
reserves. Shareholders' equity is referred to in the Dutch insurance industry as
the "solvency margin". See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION -- Liquidity and Capital Resources".

The 1992 EC insurance Directives were incorporated into Dutch legislation
in July 1994. These Directives are founded on the "home country control"
principle, according to which the ongoing regulation of insurance companies,
including their foreign insurance operations, is the responsibility of the home
country insurance regulatory authority. The home country insurance regulatory
authority monitors compliance with applicable regulations, the solvency of the
insurer and its actuarial reserves, as well as the assets of the insurer which
support such reserves. As a result of the implementation of these Directives, an
insurance company that has been licensed to conduct insurance business in one
jurisdiction of the EU may do business directly or through foreign branches in
all other jurisdictions of the EU without being subject to licensing
requirements under the laws of the other EU member-states.

In 1994 the Insurance Supervisory Board also issued revised actuarial
principles relating to the overall adequacy of technical reserves and the
profitability of new products.

UNITED STATES

ING's United States insurance subsidiaries are subject to regulation and
supervision in the individual states in which they transact business.
Supervisory agencies in the various States have broad powers to grant or revoke
licenses to transact business, regulate trade practices, license agents, approve
policy forms and certain premium rates, set standards of solvency and reserve
requirements, determine the form and content of required financial reports,
examine insurance companies and prescribe the type and amount of investments
permitted. Insurance companies are subject to a mandatory audit every three to
five years (depending on the State of domicile) by the regulatory authorities
and every year by the independent auditors.

United States Federal legislation has recently been proposed which would
allow the restructuring of financial services companies so that a financial
services holding company can have insurance, banking and securities
subsidiaries. Other Federal legislative proposals are anticipated which would
similarly expand permitted banking activities to encompass the insurance
business. ING cannot assess the likelihood of passage of any such legislation,
the financial terms of any enactment, or what the ultimate impact on ING of the
adoption of any such proposed enactment might be.

Since 1993, insurers, including the companies comprising ING Insurance's
United States operations, have been subject to risk-based capital ("RBC")
guidelines. These guidelines provide a method to measure the adjusted capital
(statutory capital and surplus plus other adjustments) that insurance companies
should have for regulatory purposes, taking into account the risk
characteristics of the company's investments and products. An insurance
company's RBC ratio will vary over time depending upon many factors, including
its earnings, the mix of assets in its investment portfolio, the nature of the
products it sells and its rate of sales growth, as well as changes in the RBC
formulas required by regulators. The RBC guidelines are intended to be a
regulatory tool only, and are not intended as a means to rank insurers
generally. Each of the companies comprising ING Insurance's United States
operations was above its target and statutory minimum RBC ratios at year-end
1996.

On the basis of statutory financial statements filed with state insurance
regulators, the National Association of Insurance Commissioners ("NAIC")
annually calculates a number of financial ratios to assist State regulators in
monitoring the financial condition of insurance companies. A "usual range" of
results for each ratio is used as a benchmark. Departure from the "usual range"
on four or more ratios

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generally leads to inquiries from individual State insurance commissioners.
Based on these ratios, the NAIC examiner team assigns a "priority" to each
insurance company which is used by the State regulatory authorities in
prioritizing their workload.

The NAIC has undertaken a comprehensive codification of statutory
accounting practices for insurers. Once codification has been completed and the
new principles adopted and implemented, these could have a significant impact on
the United States Insurance group's statutory results and financial position.
Codification is not expected to be completed prior to 1997.

Insurance holding company statutes and regulations of each insurer's State
of domicile require periodic disclosure concerning the ultimate controlling
person (i.e., the corporation or individual which controls the domiciled insurer
in each State). Such statutes also impose various limitations on investments in
affiliates and may require prior approval of the payment of certain dividends by
the registered insurer to ING or various of its affiliates. ING is subject, by
virtue of its ownership of insurance companies, to certain of these statutes and
regulations.

BELGIUM

Insurance supervision in Belgium is conducted by the Insurance Control
Office (Controle Dienst Verzekeringen) under the supervision of the Minister of
Economic Affairs. Belgian solvency requirements are based on the EU Directives
and are the same as those in the Netherlands.

CANADA

ING Holdings Inc. owns one life insurance company in Canada, NN Life
Insurance Company of Canada ("NN Life"), which is federally incorporated and is
licensed to sell life insurance in all 10 provinces and 2 territories. NN Life
sells its products through independent brokers who are individually or
corporately licensed to sell in the provincial jurisdiction in which they do
business.

As a federally incorporated company under the Insurance Companies Act, NN
Life must meet certain regulatory requirements regarding its capital and
solvency. The Office of the Superintendent of Financial Institutions Canada
("OSFI") is the primary regulator with regard to solvency, reserve levels, and
general business conduct, which may include issues of policyholder rights,
investment practices, audit policies, related party transactions, and corporate
policies regarding the issue of shares and shareholders' rights. NN Life is also
provincially regulated in respect of the sale of its products, the licensing of
agents, policy terms and other issues relating to enforcement and policy
payments on maturity, death or otherwise.

NN Life is required to file quarterly reports with OSFI and an annual
report known as the OSFI 54. This document provides detailed calculations on
such items as reserves, solvency and investment holdings and contains a copy of
NN Life's annual report to its shareholders. The annual reports are prepared
according to Canadian GAAP standards and are audited by a firm of external
auditors. NN Life is also required to meet certain solvency tests under the
Minimum Continuing Capital and Surplus Requirements ("MCCSR") and Test of
Adequacy of Assets each year. NN Life has passed these tests each year since its
predecessor, the Commercial Life Assurance Company, was acquired in 1956.

ING Canada Holdings Inc. ("ING Canada") currently owns seven non-life
insurance companies. The Commerce Group and Wellington are regulated federally
under the Insurance Companies Act. Western Union is an Alberta company, Belair
Insurance and St. Maurice are Quebec chartered companies and the Prince Edward
Island Insurance Company is chartered in that province. ING Canada Holdings Inc.
is a federal company incorporated pursuant to the Canada Business Corporations
Act. Halifax was incorporated by a special act of the Nova Scotia legislature,
and is as a result a provincial company. The Insurance Companies Act, however,
grants special status to Halifax so that it may be administered under federal
regulation. Halifax files the same OSFI reports as do the other OSFI-regulated
companies and for all intents and purposes is administered as if it were
incorporated federally. ING Canada is currently seeking a special act of the
Nova Scotia legislature to continue Halifax's federal jurisdiction.

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The various provincial statutes are almost identical. The law of Quebec,
which is based on a Civil Code (modeled on the Napoleonic Code of France),
varies in form but not substance from that of the other provinces. There are few
significant differences between provinces in the administration of the insurance
statutes, other than in the area of agent regulation. Ontario has recently
introduced provisions which make insurers absolutely liable for the actions of
their agents, even if that agent is acting outside the scope of his or her
appointment. The only defense available to the insurer is one of fraud. Due
diligence may be pleaded; however, unless the insurer can prove that its
standards of education, monitoring and auditing of agents are of the highest
level, the insurer will be held responsible for the agents' action. Quebec also
has a statute which similarly makes the insurer responsible for the acts of its
agents.

JAPAN

Japan's financial market is highly regulated by the Insurance Business Law
and by numerous Ministry of Finance ("MOF") regulations and guidelines. The
supervision of insurers is the duty of Japan's Insurance Department under the
Banking Bureau of the MOF. This department has two supervisory offices, one for
life insurance and the other for non-life insurance business. Both offices have
extensive powers of inspection and control which span the entire range of
insurance activities. An insurer wishing to enter the Japanese market must first
obtain a licence from the MOF. NLIC's predecessor company, NN Life, obtained its
license in 1986.

New products, revisions of existing products and changes in policy
provisions require approval by the MOF. Premiums are, in most cases, uniform,
varying only between participating and non-participating products. MOF
ordinances stipulate the types of assets in which an insurance company can
invest. In addition, ordinances limit the proportion of assets that an insurance
company may invest in certain categories of investments (for example, insurance
companies may invest no more than 30% of total assets in domestic equities, 20%
in real estate, 30% in foreign currency denominated assets).

The Insurance Business Law further requires that an insurance company set
aside a liability reserve for each policyholder every business period to provide
for the fulfilment of future obligations on insurance contracts. The MOF also
specifies the method of calculation, the level of expected mortality and other
assumptions which are applied in calculating liability reserves for long-term
contracts. An external audit is required for all insurers with equity of more
than Y500 million or with total liabilities of more than Y20 billion. The
auditors must report on whether the balance sheet and income statements show
fairly the status of the insurer's assets and liabilities in conformity with
relevant laws, MOF ordinances and the insurer's articles of incorporation. In
addition to the external audit, internal statutory auditors must be elected to
examine whether there have been any serious violations of the law, relevant MOF
ordinances or the insurer's articles of incorporation by the insurer's
directors. The internal auditors are also responsible for accounting matters,
depending on the results produced from the external audit and are required to
draw up a report covering financial and non-financial issues which is included
in the annual report to shareholders.

Japan's solvency requirements are also specified in MOF ordinances. The MOF
examines the soundness of an insurance company by taking into consideration its
solvency margin divided by its total amount of risk which is calculated in a
similar way as the U.S.'s RBC calculation. If the MOF deems it necessary, it may
require the company to submit a plan for improvement.

Only insurance products approved by the MOF can be marketed. Each insurance
product must be described by its policy provisions, documents describing the
insurer and a document showing the basis of the calculation of premiums and the
liability reserve. Any alterations in these documents must be approved by the
MOF.

AUSTRALIA

Life insurance is governed by Federal legislation, specifically, the Life
Insurance Act, 1995 (the "1995 Act"). The industry is regulated by the Insurance
and Superannuation Commission ("ISC")

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which has been granted wide-ranging powers under the 1995 Act. In addition, the
legislation defines statutory roles for a company's appointed actuary and the
approved auditor which include specific responsibilities to report to the ISC.

The primary supervisory tool in Australia is the annual return to the ISC
which includes financial statements and a comprehensive financial condition
report prepared by the actuary. Financial statements are currently not subject
to Australian Accounting Standards, which are presently being drafted, but
rather to regulations prescribed by the ISC. Australian life insurance companies
are required to meet two tests of financial soundness, a solvency test and a
capital adequacy test. These tests are defined in standards issued by the Life
Insurance Actuarial Standards Board and are enforced by the ISC. The solvency
test is comparable to a liquidation test. The penalty for failure is placement
under judicial management. The capital adequacy test is an ongoing business
test. The penalty for failure is a prohibition on dividend payments and the
requirement to follow the directions of the ISC.

The Insurance Commissioner (within the ISC) is appointed under the 1995 Act
to implement its provisions relating to non-life insurers. The Commissioner uses
the information collected in specified returns to assess the value of assets and
liabilities and hence an insurer's solvency. The Commissioner also examines the
insurer's solvency, liquidity, and claims provisions of profitability, including
the security and adequacy of reinsurance arrangements. The Insurance Act, 1993
specifies that an insurer's solvency must be the greater of two million
Australian dollars, twenty percent of net written premiums or fifteen percent of
net outstanding claims.

Financial statements for non-life insurers are required under the
Corporations Law and Insurance Act and are based on Australian audited
accounting standards.

Self regulation by non-life insurers is regulated by the Insurance Council
of Australia ("ICA") which has a Claims Review Panel for handling consumer
claims complaints. The ICA also has a Code of Practice with which all insurers
must comply. This code addresses policy disclosure, "Plain English" wordings,
dispute resolution and the establishment of internal compliance mechanisms.

State legislation principally relates to specific classes of insurance,
particularly employers' liability and motor bodily injury insurance. Presently,
for employers' liability insurance, State governments underwrite plans in four
States with three of these having their claims managed by private insurers; the
remaining four States and territories have insurer underwritten schemes. Motor
bodily injury insurance is underwritten in five States by the state government
with three insurer underwritten schemes. State legislation also controls the
level of certain fees and levies which are applied to insurance contracts.

BANKING

BASLE STANDARDS

The bank regulatory authorities of the group of ten countries (the "Group
of Ten"), which includes the United States, the Netherlands and eight other
major industrialized countries, have cooperated in an effort to develop
international capital adequacy guidelines based on the relationship between a
bank's capital and its credit risks. In this context, on July 15, 1988, the
Basle Committee on Banking Regulations and Supervisory Practices adopted
risk-based capital guidelines (the "Basle guidelines"), which have been
implemented by banking regulators in the countries that have endorsed them. The
Basle guidelines are intended to strengthen the soundness and stability of the
international banking system. The Basle guidelines are also intended to reduce
an existing source of competitive inequality among international banks by
harmonizing the definition of capital and the rules for the evaluation of asset
risks and by establishing a uniform target solvency ratio (capital to
risk-weighted assets). Supervisory authorities in each jurisdiction have,
however, some discretion in determining whether to include particular
instruments as capital under the Basle guidelines and to assign different
weights, within a prescribed range, to various categories of assets. The Basle
guidelines have been adopted by the European Community and have been made part
of Netherlands law.

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EUROPEAN COMMUNITY STANDARDS

The European Community, of which the Netherlands is a member, has adopted a
capital adequacy regulation for credit institutions in all its 15 member states
based on the Basle guidelines. In 1989, the EC adopted the Council Directive of
April 17, 1989 on the "own funds" of credit institutions (the "Own Funds
Directive"), defining qualifying capital ("own funds"), and the Council
Directive of December 18, 1989 on a solvency ratio for credit institutions (the
"Solvency Ratio Directive" and, together with the Own Funds Directive, the "EC
Directives"), setting forth the required ratio of own funds to risk-adjusted
assets and off-balance sheet items. The EC Directives required the EU member
states, including the Netherlands, to transform the provisions of the Solvency
Ratio Directive and the provisions of the Own Funds Directive into national law
directly binding on banks doing business in the member states. The EC Directives
permit EU member states, when transforming the EC Directives into national law,
to establish more stringent requirements, but do not permit more lenient
requirements.

The EC Directives are aimed at harmonizing banking regulations and
supervision throughout the EU by laying down certain minimum standards in key
areas, and requiring member states to give "mutual recognition" to each other's
standards of regulation. The concept of "mutual recognition" has also been
extended to create the "passport" concept: the freedom to establish branches in,
and to provide cross-border services into, other EU member states once a bank
has been licensed in its "home" state. The EC Directives contain detailed (and
often complex) provisions. The single market program for banking was completed
when the Capital Adequacy Directive ("CAD") was implemented in the Netherlands
with effect from January 1, 1996. In particular, the CAD introduces a new
requirement for banks to provide capital for market risk. The implementation of
CAD has had no material impact on ING's total capital position.

A Dutch credit institution is not permitted to start operations through a
branch in another EU member state until it has received confirmation from the
Dutch Central Bank that the information required by the Second Directive on the
Coordination of Legislation to the Taking Up and Pursuit of the Business of
Credit Institutions (the "Second Banking Coordination EC Directive") has been
submitted to the Dutch Central Bank and until, following this confirmation, a
period of two months has elapsed or until, before the expiry of this period, it
has received confirming information by the Dutch Central Bank.

The EC Directives require a bank, commencing with the end of the 1992
financial year, to have a solvency ratio of own funds to risk-adjusted assets
and certain off-balance sheet items of 8%. At least one-half of the own funds in
the numerator of the ratio must be "original own funds", or "Tier 1" capital.
The rest may be "additional own funds", or "Tier 2" capital. As of January 1,
1997, Tier 1 capital consists solely of paid-up capital plus share premium
accounts, other reserves and the fund for general banking risks less a deduction
for goodwill. Tier 2 capital includes revaluation reserves, value adjustments
and certain other funds and securities (such as fixed-term cumulative
preferential shares and subordinated debt). The aggregate of a bank's
subordinated loans and fixed-term cumulative preferential shares may not exceed
50% of the bank's Tier 1 capital.

To compute the denominator of the solvency ratio, the assets of a bank are
assigned to five broad categories of relative credit risk (0%, 10%, 20%, 50% and
100%) and the balance sheet value of each asset is multiplied by the percentage
weight applicable to its risk category to arrive at the risk-adjusted value.
With respect to off-balance sheet items, such as financial guarantees, letters
of credit and foreign currency and interest rate contracts, first, their face
value is adjusted according to their risk classification depending on the type
of instrument (0%, 10%, 20%, 50% and 100%), then they are assigned, like on-
balance sheet assets, to the credit risk categories depending on the type of
debtor and multiplied by the applicable percentage weights.

The Dutch Central Bank implemented the Basle guidelines on January 1, 1991
and the EU Directives in 1992.

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NETHERLANDS REGULATION

ING's banking activities in the Netherlands are supervised and extensively
regulated by the Dutch Central Bank on behalf of the Netherlands Minister of
Finance under the mandate of the Act on the Supervision of Credit Institutions
(the "Credit Institutions Supervision Act") (Wet Toezicht Kredietwezen 1992).

The Credit Institutions Supervision Act was amended in 1992 to implement
the Second Banking Coordination EC Directive and to introduce a number of other
changes, including implementing an EC Directive on the supervision of credit
institutions on a consolidated basis and permitting the Dutch Central Bank to
issue recommendations and general directives for the management of credit
institutions.

The principal aspects of the Credit Institutions Supervision Act are
discussed below.

SCOPE OF THE ACT. Any enterprise whose business it is to receive
funds repayable on demand or subject to notice and to grant credits or make
investments for its own account, is a credit institution. ING Bank is a
credit institution and, because it is engaged in the securities business as
well as the commercial banking business, a "universal bank" under the terms
of the Credit Institutions Supervision Act. ING Bank may accordingly be
restricted from making capital contributions or loans to its subsidiaries.

AUTHORIZATION SYSTEM. An institution is prohibited from pursuing the
business of a credit institution in the Netherlands unless it has obtained
authorization from the Dutch Central Bank. In the event of the provision of
cross-border services, involving the acceptance of repayable funds, to be
provided by an institution established in another member EU state, the
Dutch Central Bank must be informed of the contemplated operations, and the
institution must have obtained authorization to pursue the business of a
credit institution in the other EU member state.

REGULAR SUPERVISION. The Dutch Central Bank determines whether a
credit institution meets the authorization requirements, prudential
requirements, the requirements as to the structure of its administrative
organization and the requirements relating to its structural policy and
monetary supervision. A credit institution must inform the Dutch Central
Bank of any change in the number, the identity or the history of the
persons determining its day-to-day policy. Furthermore, a credit
institution must inform the Dutch Central Bank if it fails to comply, or to
comply fully, with the Dutch Central Bank's standards regarding solvency,
liquidity or administrative organization.

PRUDENTIAL SUPERVISION. The Dutch Central Bank exercises prudential
supervision to safeguard the solvency and liquidity of credit institutions
in order to protect creditors' interests. Prudential supervision is
exercised by the Dutch Central Bank, with due observance of the relevant EC
directives, on the basis of solvency and liquidity directives for the
credit institutions.

SOLVENCY DIRECTIVES. Solvency directives are aimed at measuring the
ratio of risk-bearing operations to available capital. Depending on the
degree of risk involved in the various operations, the related assets are
assigned a weighting coefficient. The total risk-weighted value of both on-
and off-balance sheet items is divided by actual funds to obtain a ratio.
Internationally, it has been agreed that this ratio should be at least 8%.

LIQUIDITY DIRECTIVES. The basic principle of the liquidity directives
is that liquid assets must be held against "net" liabilities of credit
institutions (after netting out claims and liabilities in a maturity
schedule), so that the liabilities can be met on the due dates or on
demand, as the case may be.

STRUCTURAL SUPERVISION. A declaration of no objection must be
obtained from the Dutch Central Bank for a credit institution to acquire a
"qualified participation" of 10% or more in another enterprise. A
declaration of no objection must also be obtained for the acquisition by
any person of a "qualified participation" in a credit institution greater
than 5%. A "qualified participation" as referred to herein is an interest
greater than 5% directly or indirectly owned in the share capital of a
business enterprise or institution, or the direct or indirect voting power,
or comparable voting interest, greater than 5% within the business
enterprise or institution. Stipulations will be attached to declarations of

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no objection granted to holding companies of both credit institutions and
insurance companies, as has been agreed in the Protocol.

The Dutch Central Bank also supervises the administrative organization of
the individual credit institutions, including ING Bank, their financial
accounting system and internal controls. The administrative organization must be
such as to ensure that a credit institution has at all times a reliable and
up-to-date overview of its rights and obligations. Furthermore, the electronic
data processing systems, which form the core of the accounting system, must be
secured in such a way as to ensure optimum continuity, reliability and security
against fraud. As part of the supervision of administrative organizations, the
Dutch Central Bank has also stipulated that this system must be able to prevent
conflicts of interests, including the abuse of insider information.

Credit institutions such as ING Bank must submit monthly returns to the
Dutch Central Bank (quarterly returns for the international banking operations).
These returns, which must be based on the reporting institutions' own accounting
systems, must provide a true and fair view of the financial position and
results. The detailed financial returns of the banking entities of ING are
audited by ING's internal auditors and include balance sheets and liquidity and
solvency ratios.

ING Bank also files monthly and annual reports with the Dutch Central Bank.
These reports are consolidated as far as they concern ING Bank's subsidiaries in
the Netherlands, unless the subsidiaries file their own reports with the Dutch
Central Bank. The annual reports are audited by ING Bank's independent auditors.

UNITED KINGDOM

The framework for supervision and regulation of banking and financial
services in the United Kingdom has been heavily influenced by EU directives
which are required to be implemented in member states through national
legislation. The principal legislation concerning the regulation of banks in the
United Kingdom is the Banking Act 1987 (the "Banking Act"). Based on the Banking
Act, the Bank of England acts as supervisory authority and has wide
discretionary powers over banks authorized by it to carry on banking business.
As part of its supervisory role, the Bank of England sets standards and ratios
which serve as guidelines for the banks under its supervision. Each bank has to
report on a regular basis to the Bank of England. Solvency requirements are in
line with those prevailing in the Netherlands.

UNITED STATES

ING's banking activities in the United States are restricted to broker and
dealer activities. Current U.S. legislation restricts the scope of banking
activities that may be conducted in the United States by a company affiliated
with a company engaged in a full range of insurance activities in the United
States. See "-- Broker-Dealer and Investment Management Activities".

OTHER COUNTRIES

Elsewhere, ING's banking operations are subject to regulation and control
by local central banks and monetary authorities.

BROKER-DEALER AND INVESTMENT MANAGEMENT ACTIVITIES

Certain separate accounts supporting the variable products of First ING
Life Insurance Company of New York, Security Life of Denver Insurance Company,
and Southland Life Insurance Company are also registered under the Securities
Act of 1933 and the Commission's regulations thereunder. ING America Equities,
Inc., a subsidiary of Security Life of Denver Insurance Company ("ING-AE"), and
ING Barings (through ING Barings (US) Securities Inc.) are registered as
broker-dealers under the Exchange Act. ING-AE and ING Barings are subject to
extensive regulations and are members of, and subject to regulation by, the
National Association of Securities Dealers ("NASD") and various other
self-regulatory organizations ("SROs"). As a result of registration under the
Exchange Act and SRO memberships,

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ING-AE and ING Barings are subject to overlapping schemes of regulation which
cover all aspects of their securities business. Such regulations cover matters
such as capital requirements, the use and safekeeping of customers' funds and
securities, recordkeeping and reporting requirements, supervisory and
organizational procedures intended to assure compliance with securities laws and
rules of the SROs and to prevent improper trading on "material non-public"
information, employee-related matters, limitations on extensions of credit in
securities transactions, and clearance and settlement procedures. A particular
focus of the applicable regulations concerns the relationship between
broker-dealers and their customers. As a result, ING-AE and ING Barings in some
instances may be required to make "suitability" determinations as to certain
customer transactions, and are limited in the amounts that they may charge
customers.

Certain financial services subsidiaries of ING are also registered as
investment advisers under the Investment Advisers Act of 1940, as amended (the
"Investment Advisers Act") and the Commission's regulations thereunder. Many of
the investment companies managed by these financial services subsidiaries,
including a variety of mutual funds and other pooled investment vehicles, are
registered with the Securities and Exchange Commission under the Investment
Company Act. All aspects of such financial services subsidiaries' investment
advisory activities are subject to various U.S. Federal and State laws and
regulations and to the law in those other countries in which they conduct
business. Such laws and regulations relate to, among other things, limitations
on the ability of investment advisers to charge performance-based or
non-refundable fees to clients, recordkeepers and reporting requirements,
disclosure requirements, limitations on principal transactions between an
adviser or its affiliates and advisory clients, as well as general anti-fraud
provisions. The failure to comply with such laws or regulations may result in
possible sanctions, including the suspension of individual employees,
limitations on the activities in which the investment adviser may engage,
suspension or revocation of the investment adviser's registration as an adviser,
censure and/or fines.

Baring Asset Management, a London-based broker-dealer, is regulated by the
Securities and Futures Authority ("SFA") in the United Kingdom and, accordingly,
is subject to the financial resources requirements of the SFA. A Tokyo-based
broker-dealer is regulated by the MOF. ING, ING-AE, ING Barings and Baring Asset
Management have consistently operated in excess of their respective regulatory
requirement and management believes that they currently do and will continue to
do so.

Certain other U.S. and non-U.S. subsidiaries are subject to various
securities, commodities and banking regulations and capital adequacy
requirements promulgated by the regulatory and exchange authorities of the
countries in which they operate. The subsidiaries have consistently operated in
excess of their applicable local capital adequacy requirements.

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TAXATION

The following is a summary of the Netherlands tax consequences, and the
United States Federal income tax consequences, of the ownership of Bearer
Receipts or ADSs by U.S. Shareholders (as defined below). For purposes of this
summary a "U.S. Shareholder" is a holder of ADSs or Bearer Receipts that is an
individual citizen or resident of the United States, a corporation organized
under the laws of the United States or of any state of the United States or any
other person subject to United States Federal income tax on a net income basis
in respect of an ADS or a Bearer Receipt.

The summary is a general description of the present Netherlands and United
States Federal income tax laws and practices as well as the relevant provisions
of the present double taxation treaty between the Netherlands and the United
States (the "Treaty"). It should not be read as extending to matters not
specifically discussed, and prospective investors should consult their own
advisors as to the tax consequences of their purchase, ownership and disposal of
Bearer Receipts or ADSs. In particular, the summary does not take into account
the specific circumstances of any particular investor (such as banks, insurance
companies, dealers in securities, investors liable for alternative minimum tax,
investors that actually or constructively own 10% or more of the voting stock of
ING Groep N.V. or investors that hold Bearer Receipts or ADSs as part of a
straddle or a hedging or conversion transaction), some of which may be subject
to special rules. The Netherlands rules applying to holders of a "substantial
interest" -- in broad terms, individuals who hold or have held directly or
indirectly either independently or jointly with certain close relatives at least
5% of the nominal paid-up capital or of any class of shares in ING Groep
N.V. -- are not addressed in this summary. With respect to U.S. Shareholders,
this summary generally applies only to holders who hold Bearer Receipts or ADSs
as a capital asset. The summary is based in part upon the representations of the
Depositary and the assumption that each obligation in the Deposit Agreement and
any related agreement will be performed in accordance with its terms.

In general, for United States Federal income and Netherlands tax purposes,
holders of Bearer Receipts will be treated as the owners of the Ordinary Shares
underlying the Bearer Receipts, holders of ADRs evidencing ADSs will be treated
as the owners of the Ordinary Shares evidenced by Bearer Receipts, and exchanges
of Ordinary Shares for Bearer Receipts and then for ADSs, and exchanges of ADSs
for Bearer Receipts and then for Ordinary Shares, will not be subject to United
States Federal or Netherlands income tax.

It is assumed for purposes of this summary that a U.S. Shareholder is
entitled to the benefits of the Treaty.

NETHERLANDS TAXATION

The following summary of the Netherlands tax consequences of the ownership
of ADSs by U.S. Shareholders is based on the opinion of KPMG Meijburg & Co.
Except as otherwise noted, the tax consequences described below also apply to
U.S. Shareholders who own Bearer Receipts.

WITHHOLDING TAX ON DIVIDENDS

The Netherlands imposes a withholding tax on a distribution of a dividend
at the rate of 25%. Stock dividends paid out of ING's paid-in share premium
recognized for Netherlands tax purposes are not subject to the above withholding
tax.

Under the Treaty, dividends paid by ING Groep N.V. to a resident of the
United States (other than an exempt organization or exempt pension trust, as
defined in the Treaty) who is the beneficial owner of the dividends are
generally eligible for a reduction of Netherlands withholding tax to 15%,
provided that such resident does not have an enterprise which carries on
business in the Netherlands through a permanent establishment or a permanent
representative to which or to whom the ADSs are attributable. The Treaty
provides for a complete exemption from withholding for dividends received by
exempt pension trusts and other exempt organizations, as defined in the Treaty.
Except in the case of exempt organizations other than exempt pension trusts,
such reduced dividend withholding rate can be applied for at source upon

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payment of the dividend, provided that the proper forms have been filed in
advance of the payment. Exempt organizations other than exempt pension trusts
remain subject to withholding at the rate of 25% and are required to file for a
refund of the tax withheld.

A U.S. Shareholder (other than an exempt organization) generally may claim
the benefits of a reduced withholding tax rate pursuant to the Treaty by
submitting a Form IB 92 USA, which form includes a banker's affidavit stating
that the ADSs are in the bank's custody in the name of the applicant, or that
the ADSs have been exhibited to the bank as being the property of the applicant.
If the Form IB 92 USA is submitted prior to the dividend payment date, the
reduced withholding tax rate can be applied to the dividend. A U.S. Shareholder
unable to claim withholding tax relief in this manner can obtain a refund of
excess tax withheld by filing a Form IB 92 USA and describing the circumstances
that prevented a claim for withholding tax relief at source.

Qualifying exempt organizations (other than exempt pension trusts) may seek
a refund of the tax withheld by submitting Form IB 95 USA, which also includes a
banker's affidavit.

There is currently an arrangement with the Netherlands Ministry of Finance
under which U.S. holders of outstanding American Depositary Receipts (but not
holders of Bearer Receipts) of ING Groep N.V. may obtain the lower 15%
withholding rate under the Treaty without filing the forms described above. The
arrangement also applies to exempt pension trusts but not to other exempt
organizations. ING Groep N.V. intends to enter into similar arrangements with
respect to the ADSs evidenced by ADRs. Any such arrangement may not apply to
U.S. Shareholders who own Bearer Receipts.

NET WEALTH TAX

Only individuals are subject to Netherlands Net Wealth tax, and as a
consequence no net wealth tax will be imposed in respect of ADSs held by U.S.
corporate shareholders. A U.S. Shareholder who is an individual will not be
subject to the Netherlands Net Wealth tax provided that i) the individual is not
a resident or a deemed resident of the Netherlands within the meaning of
Netherlands tax legislation and ii) such individual does not have an enterprise,
or an interest in an enterprise, which carries on business in the Netherlands
through a permanent establishment or a permanent representative to which or to
whom the ADSs are attributable.

TAXES ON INCOME AND CAPITAL GAINS

A U.S. Shareholder will not be subject to Netherlands income tax or
corporation tax, other than the withholding tax described above, or capital
gains tax, provided that i) such shareholder is not a resident or deemed a
resident of the Netherlands and ii) such shareholder does not have an enterprise
or an interest in an enterprise, which in its entirety or in part carries on
business in the Netherlands through a permanent establishment or a permanent
representative to which or to whom the ADSs are attributable.

GIFT, ESTATE OR INHERITANCE TAX

No Netherlands gift, estate or inheritance tax will be imposed on the
acquisition of ADSs by gift or inheritance from a holder of ADSs who is neither
resident nor deemed resident in the Netherlands, provided that i) a holder does
not die within 180 days after having made a gift, while being on the moment of
his death a resident or deemed resident of the Netherlands and ii) the ADSs are
not attributable to an enterprise which in its entirety or in part is carried on
through a permanent establishment or a permanent representative in the
Netherlands and in which enterprise the donor or the deceased owned an interest.

UNITED STATES TAXATION

In the opinion of Sullivan & Cromwell, special U.S. counsel to ING Groep
N.V., the following are the material United States Federal income tax
consequences of the ownership of Bearer Receipts or ADSs by U.S. Shareholders.
To the extent that the following summarizes the Netherlands taxation rules on
the

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reduction of the amount of dividend withholding tax to be paid over to the
Netherlands Tax Administration, it is based upon the advice of KPMG Meijburg &
Co.

TAXES ON INCOME

For United States Federal income tax purposes, a U.S. Shareholder will be
required to include in gross income the full amount of a cash dividend
(unreduced by Netherlands withholding tax) as ordinary income when the dividend
is actually or constructively received by the U.S. Shareholder, in the case of
Ordinary Shares, or by the Trust in the case of Bearer Receipts, or by the
Depositary in the case of ADSs. For this purpose, a "dividend" will include any
distribution paid by ING Groep N.V. with respect to the Bearer Receipts or ADSs,
but only to the extent such distribution is not in excess of ING Groep N.V.'s
current and accumulated earnings and profits as defined for United States
Federal income tax purposes. Such a dividend will constitute income from sources
outside the United States.

Subject to the limitations provided in the United States Internal Revenue
Code, a U.S. Shareholder may generally deduct from income, or credit against its
United States Federal income tax liability, the amount of any Netherlands
withholding taxes. The Netherlands withholding tax will likely not be creditable
against the U.S. Shareholder's United States tax liability, however, to the
extent that ING Groep N.V. is allowed to reduce the amount of dividend
withholding tax paid over to the Netherlands Tax Administration by crediting
withholding tax imposed on certain dividends paid to ING Groep N.V. Currently
ING Groep N.V. may, with respect to certain dividends received from qualifying
non-Netherlands subsidiaries, credit taxes withheld from those dividends against
the Netherlands withholding tax imposed on a dividend paid by ING Groep N.V., up
to a maximum of the lesser of (i) 3% of the portion of the gross amount of the
dividend paid by ING Groep N.V. that is subject to withholding and (ii) 3% of
the gross amount of the dividends received from qualifying non-Netherlands
subsidiaries. The credit reduces the amount of dividend withholding tax that ING
Groep N.V. is required to pay to the Netherlands Tax Administration but does not
reduce the amount of tax ING Groep N.V. is required to withhold from dividends.
ING Groep N.V. will endeavor to provide to U.S. Shareholders information
concerning the extent to which it has applied the reduction described above with
respect to dividends paid to U.S. Shareholders.

Because payments of dividends with respect to Bearer Receipts and ADSs will
be made in Dutch guilders, a U.S. Shareholder will generally be required to
determine the amount of dividend income by translating the guilders into United
States dollars at the "spot rate" on the date the dividend distribution is
includible in the income of the U.S. Shareholder. Generally, any gain or loss
resulting from currency exchange fluctuations during the period from the date
the dividend distribution is includible in the income of the U.S. Shareholder to
the date such payment is converted into United States dollars will be treated as
ordinary income or loss. Such gain or loss will generally be income from sources
within the United States for foreign tax credit limitation purposes.

A distribution of Ordinary or Preference Shares to a U.S. Shareholder
pursuant to a distribution in which shareholders have the right to choose to
receive cash or shares will be taxable to the same extent that a dividend of
cash would be taxable.

TAXES ON CAPITAL GAINS

Gain or loss on a sale or exchange of Bearer Receipts or ADSs by a U.S.
Shareholder will generally be a capital gain or loss for United States Federal
income tax purposes. If such U.S. Shareholder has held the Bearer Receipts or
ADSs for more than eighteen months, such gain or loss will generally be long
term capital gain or loss. In general, gain from a sale or exchange of Bearer
Receipts or ADSs by a U.S. Shareholder will be treated as United States source
income for United States Federal income tax purposes.

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PASSIVE FOREIGN INVESTMENT COMPANY

ING Groep N.V. believes that it is not a passive foreign investment company
(a "PFIC") for United States Federal income tax purposes. This is a factual
determination that must be made annually and thus may change.

If ING Groep N.V. was a PFIC any gain from the sale or disposition of
Bearer Receipts or ADSs by a U.S. Shareholder would be allocated ratably to each
year in the holder's holding period and would be treated as ordinary income. Tax
would be imposed on the amount allocated to each year prior to the year of
disposition at the highest rate in effect for that year, and interest would be
charged at the rate applicable to underpayments on the tax payable in respect of
the amount so allocated. The same rules would apply to "excess distributions",
defined generally as distributions exceeding 125% of the average annual
distribution made by ING Groep N.V. over the shorter of the holder's holding
period or the three preceding years.

A U.S. shareholder who owns Bearer Receipts or ADSs during any year that
ING Groep N.V. is a PFIC must file Internal Revenue Service Form 8621.

INFORMATION REGARDING THE COMPANY

Equitable of Iowa Companies, a Des Moines, Iowa based insurance holding
company organized in 1977, is a provider of individual annuity and life
insurance products, targeting individuals and families throughout the United
States. Through its insurance subsidiaries, Equitable Life, Golden American and
USG, the Company offers its products in all fifty states, Puerto Rico and the
District of Columbia. First Golden, a wholly-owned subsidiary of Golden
American, was incorporated on May 24, 1996 and was capitalized in December 1996.
On January 2, 1997, First Golden became licensed as a life insurance company in
the State of New York and has recently received product regulatory approvals
with respect to its initial product. Equitable Life was founded in 1867 and is
the oldest life insurance company west of the Mississippi River. The Company
began actively marketing annuity products in 1988, principally through USG,
which was acquired by the Company in 1988. Golden American, which offers
variable insurance products, was acquired by the Company on August 13, 1996.

The mailing address of the principal executive office of the Company is 909
Locust Street, P.O. Box 1635, Des Moines, Iowa 50306-1635 and the telephone
number is (515) 698-7000.

Additional information concerning the Company is included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, its reports on
Form 10-Q for the periods ended March 31, 1997 and June 30, 1997 and other
documents incorporated by reference in this Prospectus/Proxy Statement. See
"AVAILABLE INFORMATION" and "INCORPORATION BY REFERENCE".

MANAGEMENT OF ING

ING Groep N.V. has a Supervisory Board and an Executive Board. The
Executive Board is responsible for the management of ING Groep N.V. and as such
has responsibility for the policy and central management of ING, under the
supervision of the Supervisory Board. The Supervisory Board advises the
Executive Board and is responsible for supervising the policy of the Executive
Board and the general course of business within ING. In the performance of their
duties, the members of the Supervisory Board must serve the interests of ING.
The members of the Executive Board are employees of ING Groep N.V. and are
appointed to the Executive Board by the Supervisory Board. Members of the
Executive Board are appointed for an indefinite period. Certain transactions
affecting ING as a whole, such as, inter alia, the issuance, cancellation or
acquisition of Shares, the declaration of (interim) dividends, major capital
expenditures and all matters concerning substantial changes in employee
relations require the approval of the Supervisory Board.

The Supervisory Board appoints its own members. The Executive Board, the
General Meeting of Shareholders, and the General Works Council may recommend
candidates. The latter two also have a

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right to object to candidates proposed for appointment by the Supervisory Board.
No employee of ING is eligible for appointment to the Supervisory Board. Members
of the Supervisory Board are appointed for a maximum term of four years and may
be reappointed. However, members are required to retire at the end of the annual
general meeting of shareholders in the year in which they reach the age of 70
unless an exemption is granted by the Supervisory Board, in which case the
Supervisory Director concerned must resign at the end of the annual general
meeting of shareholders in the year in which he or she reaches the age of 72.

Set forth below is certain information concerning the members of the
Supervisory and Executive Boards of ING Groep N.V.

SUPERVISORY BOARD OF ING GROEP N.V.

YEAR
APPOINTED POSITION
--------- ------------------------------------

M. Ververs, Chairman............... 1994 Former chairman of the Executive
Board of Wolters Kluwer N.V.
G. Verhagen, Vice-Chairman......... 1994 Former vice-chairman of the
Executive Board of Royal Pakhoed
N.V.
Mrs. L.A.A. van den Berghe......... 1994 Professor of Insurance at Erasmus
University Rotterdam
J.W. Berghuis...................... 1991 Former vice-chairman of the
Executive Board of Royal Pakhoed
N.V.
P.F. van der Heijden............... 1995 Professor of labor law at the
University of Amsterdam
J. Kamminga........................ 1994 Governor of the Province of
Gelderland in the Netherlands
O.H.A. van Royen................... 1994 Former chairman of the Executive
Board
of Royal Hoogovens N.V.
J.J. van Rijn...................... 1992 Former chairman of the Executive
Board of ING Groep N.V. and ING
Verzekeringen N.V.
J.D. Timmer........................ 1996 Former chairman of the Executive
Board of Philips Electronics N.V.
J. Stekelenburg.................... 1997 Mayor of the City of Tilburg in the
Netherlands; former Chairman of
the Federation of Dutch Trade
Unions

EXECUTIVE BOARD OF ING GROEP N.V.

YEAR APPOINTED
--------------

A.G. Jacobs, Chairman................................................. 1991
G.J.A. van der Lugt, Vice-Chairman.................................... 1991
J.H. Holsboer......................................................... 1991
E. Kist............................................................... 1993
J.H.M. Lindenbergh.................................................... 1995
C. Maas............................................................... 1992
M. Minderhoud......................................................... 1991
A.H.G. Rinnooy Kan.................................................... 1996

COMPENSATION OF DIRECTORS AND OFFICERS

Aggregate remuneration for the members of the Executive Board, including
pension contributions, amounted to NLG 14 million in 1996 and NLG 18 million in
1995. Aggregate remuneration for the members of the Supervisory Board amounted
to NLG 1 million in each of 1996 and 1995.

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ING Groep N.V. has granted stock option rights to a number of senior
executives, which may be exchanged for Bearer Receipts exchangeable for Ordinary
Shares of ING Groep N.V during limited periods at predetermined exercise prices.
As of September 15, 1997, members of ING Groep N.V.'s Supervisory Board and
Executive Board owned rights to acquire an aggregate of up to 860,351 Bearer
Receipts.

At December 31, 1996, aggregate loans and advances outstanding to members
of the Executive Board and the Supervisory Board amounted to NLG 14 million, at
an average interest rate of 4.9%.

EXPERTS

The Consolidated Financial Statements and schedules of ING at December 31,
1996 and 1995 and for each of the three years in the period ended December 31,
1996 appearing in this Prospectus/Proxy Statement have been audited by Moret
Ernst & Young Accountants, independent auditors, as set forth in their report
thereon appearing elsewhere herein which is based in part on the report of KPMG
Accountants N.V., independent auditors. The financial statements referred to
above are included in reliance upon such reports given upon the authority of
such firms as experts in accounting and auditing.

The Consolidated Financial Statements and schedules of the Company at
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996 incorporated herein by reference in this Prospectus/Proxy
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon incorporated by reference herein. The financial
statements referred to above are incorporated herein by reference in reliance
upon such reports given upon the authority of such firm as experts in accounting
and auditing.

LEGAL OPINIONS

The validity of the ADRs offered as the Stock Consideration will be passed
upon on behalf of ING by Sullivan & Cromwell, United States counsel for ING. The
validity of the Ordinary Shares and the Bearer Receipts will be passed upon by
Jan Willem Wurfbain, General Counsel of ING.

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GLOSSARY

Actuarial reserves......... Liability established to provide for future
benefits to policyholders net of liability ceded to
reinsurers.

Annuity.................... A contract that pays a periodic income benefit for
the life of a person (the annuitant) or persons or
for a specified number of years, or a combination
of the two.

Bancassurance.............. The provision of banking and insurance products by
one provider.

Bonuses.................... Bonuses (or policyholder dividends) periodically
credited to participating contractholders. Regular
bonuses, once credited, are guaranteed on death or
maturity.

Cash surrender value....... The amount of cash available to a policyholder on
the surrender of a contract for a life insurance
product.

Catastrophe reserves....... Premium revenue deferred to future periods to
provide against future catastrophes.

Cede; ceding insurer;
cession.................... When an insurer reinsures its risk with another
insurer (a "cession"), it "cedes" business and is
referred to as the "ceding insurer".

Claim...................... An occurrence that is the basis for submission
and/or payment of a benefit under an insurance
policy. Claims may be covered, limited or excluded
from coverage, depending on the terms of the
policy.

Claims and claims
expenses................... The sum of incurred claims and claims expenses.
This term is used interchangeably with "loss and
loss adjustment expenses".

Claims expenses............ The expenses of investigating and settling claims,
including certain legal and other fees, and the
expenses of administering the claims adjustment
process.

Claims ratio............... The ratio of a property and casualty insurance or
reinsurance company's incurred claims and claims
expenses to premiums earned. Also referred to as
"Loss Ratio".

Combined ratio............. The sum of the claims ratio and the expense ratio
for a property and casualty insurance company or a
reinsurance company. A combined ratio below 100
generally indicates profitable underwriting. A
combined ratio over 100 generally indicates
unprofitable underwriting. An insurance company
with a combined ratio over 100 may be profitable to
the extent net investment results exceed
underwriting losses.

Commercial banking......... All banking operations with the exception of
investment banking operations.

Corporate banking.......... Commercial banking operations for corporate
customers.

Emerging markets........... Countries or regions with less developed economies,
which ING believes have above average economic
growth potential.

Endowment insurance........ Life insurance under which an insured receives the
face value of a policy if the individual survives
the endowment period. If the insured does not
survive, a beneficiary receives the face value of
the policy.

Ex-greenfields............. Greenfield insurance operations that have reached a
profit-earning phase on a structural basis.

Expense ratio.............. The ratio of property and casualty insurance
operating expenses to net written premiums.

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255

Facultative reinsurance.... The reinsurance of part or all of the insurance
provided by a single policy negotiated on a
contract-by-contract basis.

General Agent.............. An organization which recruits, trains and supports
independent agents.

General Works Council...... The employee representative organization of ING
which generally serves in an advisory capacity but
which also has the right to approve decisions with
respect to certain employment matters. The General
Works Council also has the right to recommend
candidates for the Supervisory Board and has
certain limited rights of objection with respect
thereto.

Greenfield insurance
operations................. Start-up insurance branches or subsidiaries,
primarily in emerging markets, which are mainly
engaged in the life insurance business.

Gross premiums written..... Total premiums (whether or not earned) for
insurance contracts written or assumed (including
deposits for investment contracts with limited or
no life contingencies written) during a specific
period, without deduction for premiums ceded.

Guaranteed Investment
Contract ("GIC")......... Generally purchased by large pension funds, GICs
provide a guaranteed rate of return over the life
of the contract with the insurance company
accepting the spread risk. If participants withdraw
their money from the plan, the plan provider will
pay to the plan the book value of the account,
regardless of the market value of the underlying
assets.

Independent agent.......... An agent who simultaneously represents a number of
insurance companies while under contract to each
one in a sales and service capacity. Independent
agents are paid on a commission basis and are not
employees of the companies they represent. An
independent agent's salary may be directly with an
insurance company or through a managing general
agent and/or an insurance broker, where such
managing general agent/insurance broker has a
contract with the insurance company.

Independent
intermediaries............. Individuals or companies which represent a number
of insurance companies in a sales and service
capacity as third party contractors. Independent
intermediaries are paid on a commission basis and
are not employees of the companies they represent.

Interest-sensitive
product.................... A life insurance policy or annuity that pays a
minimum guaranteed interest rate plus a current
rate of interest on policy or contract account
values which is subject to being reset periodically
by the insurer.

Investment banking......... Advice to clients on, among other things, mergers
and acquisitions, divestitures and restructurings,
equity and debt underwriting, and equity research
and trading.

Investment products........ Contracts issued by insurance companies that are
vehicles for investment and offer no insurance
guarantees.

Life insurance products.... Term which includes all the products offered by a
life insurance company, such as group, individual,
life and retirement.

Longevity risk............. The risk that recipients of annuities will live
longer than the mortality assumptions used in
product pricing.

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256

Loss ratio................. See "Claims Ratio".

Managing General Agent..... An organization which recruits, trains and supports
independent agents. Managing General Agents vary
dramatically in size and services provided.
Managing General Agents interface with the
insurance company's head office to help with
underwriting, help an agent with a difficult case
by providing advice or provide information to
agents regarding the status of policies.

Net premiums earned........ The portion of net premiums written that is
recognized for accounting purposes as income during
a period.

Net premiums written....... Gross premiums written for a given period less
premiums ceded to retrocessionaires during such
period.

Non-life insurance
products................... Term which includes all products offered by a
non-life insurance company, such as automobile,
personal property, workers compensation, medical
stop-loss, health and other. This term is used
interchangeably with "non-life product".

Periodic premium
products................... Life insurance products which provide for more than
one premium payment during the life of the
contract.

Persistency................ Measurement of insurance policies remaining in
force from year-to-year.

Premiums earned............ That portion of gross premiums written in current
and past periods which applies to the expired
portion of the policy period, calculated by
subtracting changes in unearned premium reserves
from gross premiums.

Provisions for loan
losses..................... Provision, presented as a deduction of Lending and
Banks, meant to absorb losses arising from debtors'
default in the Lending and Banks portfolios.

Provision for general
banking risks.............. Provision, presented net of tax as a deduction of
Lending. This provision covers general risks
inherent to banking operations to the extent it is
required by prudence.

Rest of Europe............. All of Europe, except the Netherlands.

Redemption value........... In respect of investments in fixed-interest
securities, the amount payable on the final
maturity date.

Reinsurance................ The practice whereby one party, called the
reinsurer, in consideration of a premium paid to
it, agrees to indemnify another party, called the
reinsured or ceding company, for part or all of the
liability assumed by the reinsured under a contract
or contracts of insurance which the reinsured has
issued. The reinsured may also be referred to as
the original or primary insurer, the direct writing
company, or the ceding company.

Retail banking............. Commercial banking operations for private customers
and small and medium-sized enterprises.

Retirement products........ Life insurance products that are savings vehicles
for retirement.

Share premium (reserve).... Paid-in capital in addition to issued and paid-up
nominal share capital.

Single premium products.... Life insurance products which provide for only one
premium to be paid at the issuance of the contract.

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257

Stock dividends............ Ordinary or Preference Shares received in lieu of
cash dividends, at the option of the shareholder.

Surrender.................. The termination of a life or retirement contract at
the request of the policyholder after which the
policyholder receives the cash surrender value, if
any, of the contract.

Tied Agent................. An agent that works exclusively for one insurance
company.

Treaty reinsurance......... A type of reinsurance whereby the ceding company
automatically will cede and the reinsurer
automatically will assume a predetermined portion
or category of risk underwritten by the ceding
company.

Underwriting results....... The pre-tax profit or loss experienced by a
non-life insurance company or reinsurance company
after deducting incurred claims and claims expenses
and operating expenses from premiums earned. This
profit and loss calculation includes reinsurance
assumed and ceded but excludes investment income.

Universal life insurance... A life insurance product under which (1) premiums
are generally flexible, (2) the level of death
benefits may be adjusted and (3) expenses and other
charges are specifically disclosed to a purchaser.

U.S. Generally Accepted
Accounting Principles
("U.S. GAAP").............. Accounting principles as set forth in opinions of
the Accounting Principles Board of the American
Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards
Board and/or their respective successors and which
are applicable in the circumstances as of the date
in question.

Value adjustments to
receivables of the banking
operations................. A charge to the profit and loss account in respect
of the estimated risk inherent in banking
operations. This includes additions to the
provision for loan losses and to the provision for
general banking risks.

Variable product........... A life insurance product that provides a return
linked to an underlying portfolio. The portfolio is
usually a group of mutual funds established as one
or more separate accounts with the policyholder
given some discretion in choosing the mix of
assets. Variable products often offer a general
account guaranteed interest investment option.

Whole life insurance....... A permanent life insurance product offering
guaranteed death benefits and guaranteed cash
values.

Wholesale banking
products................... All banking products for corporate customers.

Withdrawal................. Surrender in part. Some life insurance products
permit the insured to withdraw a portion of the
cash surrender value of the contract. Future
benefits are reduced accordingly.

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258

ANNEX A

AGREEMENT AND PLAN OF MERGER

AMONG

ING GROEP N.V.,

PFHI HOLDINGS, INC.

AND

EQUITABLE OF IOWA COMPANIES

DATED AS OF JULY 7, 1997
259

TABLE OF CONTENTS

RECITALS............................................................................... A-1
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1. The Merger..................................................................... A-1
1.2. Closing........................................................................ A-1
1.3. Effective Time................................................................. A-1
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
2.1. The Certificate of Incorporation............................................... A-2
2.2. The By-Laws.................................................................... A-2
ARTICLE III
OFFICERS AND DIRECTORS OF THE SURVIVING CORPORATION
3.1. Directors...................................................................... A-2
3.2. Officers....................................................................... A-2
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES
4.1. Effect on Capital Stock........................................................ A-2
(a)............................................................................
Merger Consideration A-2
(b)............................................................................
Cancellation of Shares A-3
(c)............................................................................
Merger Sub A-3
4.2. Allocation of Merger Consideration; Election Procedures........................ A-3
(a)............................................................................
Allocation A-3
(b)............................................................................
Election Procedures. A-3
(c)............................................................................
Distributions with Respect to Unexchanged Shares A-5
(d)............................................................................
Transfers A-5
(e)............................................................................
Fractional ADSs A-5
(f)............................................................................
Termination of Exchange Fund A-6
(g)............................................................................
Lost, Stolen or Destroyed Certificates A-6
(h)............................................................................
Affiliates A-6
4.3. Dissenters' Rights............................................................. A-6
4.4. Adjustments to Prevent Dilution................................................ A-6
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of the Company.................................. A-7
(a)............................................................................
Organization, Good Standing and Qualification A-7
(b)............................................................................
Capital Structure A-8
(c)............................................................................
Corporate Authority; Approval and Fairness. A-8
(d)............................................................................
Governmental Filings; No Violations. A-8
(e)............................................................................
Company Reports; Financial Statements; Statutory Statements A-9
(f)............................................................................
Absence of Certain Changes A-10
(g)............................................................................
Litigation and Liabilities A-10

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260

(h)............................................................................
Employee Benefits A-11
(i)............................................................................
Compliance with Laws; Permits A-13
(j)............................................................................
Takeover Statutes A-14
(k)............................................................................
Environmental Matters A-14
(l)............................................................................
Tax Matters A-14
(m)............................................................................
Taxes A-14
(n)............................................................................
Labor Matters A-15
(o)............................................................................
Insurance A-16
(p)............................................................................
Intellectual Property A-16
(q)............................................................................
Brokers and Finders A-16
(r)............................................................................
No Regulatory Disqualifications A-17
(s)............................................................................
Assets A-17
(t)............................................................................
Computer Technology A-17
(u)............................................................................
Insurance Business A-18
(v)............................................................................
Liabilities and Reserves A-19
(w)............................................................................
Separate Accounts; Investment Advisor A-19
(x)............................................................................
Rights Agreement A-20
(y)............................................................................
Investigation by the Company A-20
5.2. Representations and Warranties of Parent and Merger Sub........................ A-20
(a)............................................................................
Capitalization of Merger Sub A-20
(b)............................................................................
Organization, Good Standing and Qualification A-20
(c)............................................................................
Capital Structure A-21
(d)............................................................................
Corporate Authority A-21
(e)............................................................................
Governmental Filings; No Violations A-21
(f)............................................................................
Parent Reports; Financial Statements; Statutory Statements A-22
(g)............................................................................
Absence of Certain Changes A-23
(h)............................................................................
Litigation and Liabilities A-23
(i)............................................................................
Compliance with Laws A-23
(j)............................................................................
Tax Matters A-24
(k)............................................................................
Brokers and Finders A-24
(l)............................................................................
Available Funds A-24
(m)............................................................................
Taxes and Tax Returns A-24
(n)............................................................................
Collective Bargaining A-24
(o)............................................................................
Parent Ownership of Company Common Stock A-24
(p)............................................................................
Interim Operations of Merger Sub A-24
(q)............................................................................
Investigation by Parent A-25
(r)............................................................................
No Regulatory Disqualifications A-25
ARTICLE VI
COVENANTS
6.1. Company Interim Operations..................................................... A-25
6.2. Parent Interim Operations...................................................... A-26
6.3. Acquisition Proposals.......................................................... A-27
6.4. Information Supplied........................................................... A-28
6.5. Shareholders Meeting........................................................... A-28
6.6. Filings; Other Actions; Notification........................................... A-28
6.7. Taxation....................................................................... A-29
6.8. Access......................................................................... A-29
6.9. Affiliates..................................................................... A-30

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261

6.10. Stock Exchange Listing and De-listing.......................................... A-30
6.11. Publicity...................................................................... A-30
6.12. Stock Options; Performance Awards; Cash Awards and Restricted Stock............ A-30
6.13. Expenses....................................................................... A-31
6.14. Indemnification; Directors' and Officers' Insurance............................ A-31
6.15. Other Actions by the Company and Parent........................................ A-33
(a) Takeover Statute........................................................... A-33
(b) Dividends.................................................................. A-33
6.16. Directors...................................................................... A-33
6.17. Benefit Plans.................................................................. A-33
6.18. Pension Plan Stock Election.................................................... A-33
6.19. Parent Annual Report........................................................... A-33
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect the Merger..................... A-34
(a)............................................................................
Shareholder Approval A-34
(b)............................................................................
NYSE Listing A-34
(c)............................................................................
Regulatory Consents A-34
(d)............................................................................
Litigation A-34
(e)............................................................................
F-4 A-34
(f)............................................................................
Blue Sky Approvals A-34
7.2. Conditions to Obligations of Parent and Merger Sub............................. A-34
(a)............................................................................
Representations and Warranties A-34
(b)............................................................................
Performance by the Company A-35
(c)............................................................................
Consents Under Agreements A-35
(d)............................................................................
Tax Opinion A-35
(e)............................................................................
Affiliates Letters A-35
(f)............................................................................
Accountant's Letter A-35
(g)............................................................................
Rights Agreement A-35
(h)............................................................................
Average Closing Price A-35
7.3. Conditions to Obligation of the Company........................................ A-35
(a)............................................................................
Representations and Warranties A-35
(b)............................................................................
Performance of Obligations of Parent and Merger Sub A-36
(c)............................................................................
Consents Under Agreements A-36
(d)............................................................................
Tax Opinion A-36
(e)............................................................................
Legal Opinion A-36
(f)............................................................................
Accountant's Letter A-36
(g)............................................................................
Average Closing Price A-36
ARTICLE VIII
TERMINATION
8.1. Termination by Mutual Consent.................................................. A-36
8.2. Termination by Either Parent or the Company.................................... A-36
8.3. Termination by the Company..................................................... A-37
8.4. Termination by Parent.......................................................... A-37
8.5. Effect of Termination and Abandonment.......................................... A-37

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ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1. Survival....................................................................... A-38
9.2. Modification or Amendment...................................................... A-38
9.3. Waiver of Conditions........................................................... A-38
9.4. Counterparts................................................................... A-38
9.5. Governing Law and Venue; Waiver of Jury Trial.................................. A-38
9.6. Notices........................................................................ A-39
9.7. Entire Agreement; No Other Representations..................................... A-40
9.8. No Third Party Beneficiaries................................................... A-40
9.9. Obligations of Parent and of the Company....................................... A-40
9.10. Severability................................................................... A-40
9.11. Interpretation................................................................. A-41
9.12. Assignment..................................................................... A-41
Exhibit A -- List of Executive Officers of the Company
Exhibit B -- List of Executive Officers of Parent
Exhibit C -- 7.3(d) Opinion
Exhibit D-1 -- 7.3(e) Opinion
Exhibit D-2 -- 7.3(e) Opinion

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263

AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated
as of July 7, 1997, among Equitable of Iowa Companies, an Iowa corporation (the
"Company"), ING Groep N.V., a Netherlands corporation ("Parent"), and PFHI
Holdings, Inc., a Delaware corporation and a direct wholly-owned subsidiary of
Parent ("Merger Sub," the Company and Merger Sub sometimes being hereinafter
collectively referred to as the "Constituent Corporations").

RECITALS

WHEREAS, the respective boards of directors of Merger Sub and the Company
have approved this Agreement and adopted the plan of merger set forth herein
whereby the Company will merge with and into Merger Sub upon the terms and
subject to the conditions set forth in this Agreement (the "Merger");

WHEREAS, it is intended that, for federal income tax purposes, the Merger
shall qualify as a reorganization under the provisions of section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (collectively the "Code"); and

WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement.

NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:

ARTICLE I

THE MERGER; CLOSING; EFFECTIVE TIME

1.1. The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, at the Effective Time (as defined in Section 1.3) the Company
shall be merged with and into Merger Sub and the separate corporate existence of
the Company shall thereupon cease. Merger Sub shall be the surviving corporation
in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation"), and the separate corporate existence of Merger Sub with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger. The Merger shall have the effects specified in the Iowa Business
Corporation Act, as amended (the "BCA"), and the Delaware General Corporation
Law (the "DGCL").

1.2. Closing. The closing of the Merger (the "Closing") shall take place
(i) at the offices of Sullivan & Cromwell, 1701 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006 at 9:00 a.m., e.s.t., on the first business day on which
the last to be fulfilled or waived of the conditions set forth in Article VII
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions) shall be
satisfied or waived in accordance with this Agreement or (ii) at such other
place and time and/or on such other date as the Company and Parent may agree in
writing (the "Closing Date").

1.3. Effective Time. As soon as practicable following the Closing, Merger
Sub will (i) deliver to the Secretary of State of Iowa for filing pursuant to
BCA sec. 1105 articles of merger (the "Articles of Merger") and (ii) cause a
Certificate of Merger (the "Delaware Certificate of Merger") to be executed,
acknowledged and filed with the Secretary of State of Delaware as provided in
Section 251 of the DGCL. The Merger shall become effective on the date on which
the later of the following actions shall have been completed: (i) at the time
when the Articles of Merger are effective and (ii) the Delaware Certificate of
Merger has been duly filed with the Secretary of State of Delaware (the
"Effective Time").

A-1
264

ARTICLE II

CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION

2.1. The Certificate of Incorporation. The certificate of incorporation
of Merger Sub as in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation (the "Charter") except
that the First Article thereof shall be amended to change the name of Merger Sub
to Equitable of Iowa Companies, until duly amended as provided therein or by
applicable law.

2.2. The By-Laws. The by-laws of Merger Sub in effect at the Effective
Time shall be the by-laws of the Surviving Corporation (the "By-Laws"), until
thereafter amended as provided therein or by applicable law.

ARTICLE III

OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION

3.1. Directors. The directors of Merger Sub at the Effective Time shall,
from and after the Effective Time, be the directors of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and the By-Laws.

3.2. Officers. The officers of the Company at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the Charter
and the By-Laws.

ARTICLE IV

EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES

4.1. Effect on Capital Stock. At the Effective Time, as a result of the
Merger and without any action on the part of the holder of any capital stock of
the Company:

(a) Merger Consideration. Subject to Section 4.2, each share of the
Common Stock, no par value, of the Company (a "Share" or, collectively, the
"Shares") issued and outstanding immediately prior to the Effective Time
(other than Shares held directly by Parent or Shares that are owned by the
Company or any Subsidiary of the Company (other than 112,000 Shares owned
by Equitable Life Insurance Company of Iowa in connection with the funding
of a phantom stock bonus arrangement and 600,000 shares owned by the
Equitable Life Insurance Company of Iowa Pension Plan (collectively,
"Benefit Shares")) and in each case not held on behalf of third parties or
Shares ("Dissenting Shares") that are owned by shareholders ("Dissenting
Shareholders") exercising rights as dissenters pursuant to Division XIII of
the BCA (collectively, "Excluded Shares")) shall be converted into, and
become exchangeable for, at the election of the holder thereof, either (i)
$68 in cash (the "Cash Consideration") or (ii) that number of American
Depositary Shares ("ADSs"), evidenced by American Depositary Receipts (with
each ADS representing one Bearer Depositary Receipt ("Bearer Receipt"),
each of which in turn represents an interest in one Ordinary Share, nominal
value NLG 1 per Ordinary Share, of Parent ("Parent Shares")) (the "Stock
Consideration") equal to the number (the "Conversion Number") derived by
dividing $68 by the average closing prices per ADS as reported on the New
York Stock Exchange, Inc. (the "NYSE") composite transactions reporting
system (as reported in the New York City edition of The Wall Street Journal
or, if not reported thereby, another authoritative source) for the ten
trading days (the "Averaging Period") ending on the last trading day prior
to the Closing Date, provided that (x) if the Average

A-2
265

Closing Price is less than $40.2864 the Conversion Number shall be 1.6879
and (y) if the Average Closing Price is greater than $54.5052 the
Conversion Number shall be 1.2476. The Cash Consideration and the Stock
Consideration are sometimes hereinafter collectively referred to as the
"Merger Consideration". At the Effective Time, all Shares shall no longer
be outstanding and shall be canceled and retired and shall cease to exist,
and each certificate representing any of such Shares (other than Excluded
Shares) (a "Certificate") shall thereafter represent only the right to
receive the Merger Consideration and the right, if any, to receive pursuant
to Section 4.2(e) cash in lieu of fractional ADSs into which such Shares
have been converted pursuant to this Section 4.1(a) and any dividends or
other distributions pursuant to Section 4.2(c).

(b) Cancellation of Shares. Each Share issued and outstanding
immediately prior to the Effective Time and owned directly by Parent or by
the Company or any Subsidiary of the Company (other than Benefit Shares or
Shares that are in each case held on behalf of third parties) shall, by
virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, shall be canceled and retired without
payment of any consideration therefor and shall cease to exist.

(c) Merger Sub. At the Effective Time, each share of Common Stock,
par value $1.00 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall remain outstanding and each certificate
therefor shall continue to evidence one share of Common Stock of the
Surviving Corporation.

4.2. Allocation of Merger Consideration; Election Procedures.

(a) Allocation. The maximum number of Shares to be converted into the
right to receive Cash Consideration in the Merger (the "Cash Election
Number") shall be less than (i) 50 percent of the number of Shares issued
and outstanding immediately prior to the Effective Time less the number of
Shares to be canceled in accordance with Section 4.1(b) less (ii) the
number of Dissenting Shares, if any, that are not to be treated as
Non-Election Shares (as defined in Section 4.2(b)(ii)) pursuant to Section
4.3 and the aggregate number of shares which entitle the holders thereof to
receive cash in lieu of fractional ADSs, pursuant to Section 4.2(e). The
maximum number of Shares to be converted into the right to receive Stock
Consideration in the Merger (the "Stock Election Number") shall be equal to
60 percent of the number of Shares issued and outstanding immediately prior
to the Effective Time less the number of Shares to be canceled in
accordance with Section 4.1(b). In connection with the foregoing
percentages, any Shares owned directly by Parent which are canceled in
accordance with Section 4.1(b) shall be considered Cash Election Shares (as
hereinafter defined) and, to the extent any Shares beneficially owned by
Parent are not canceled and are Stock Election Shares (as hereinafter
defined), the Stock Election Number shall be so increased.

(b) Election Procedures.

(i) As of the Effective Time, Parent shall, with the Company's
prior approval, which shall not be unreasonably withheld, appoint an
agent to act as an exchange agent (the "Exchange Agent") for the purpose
of issuing the Merger Consideration and any dividends or other
distributions with respect to the ADSs to be issued or paid pursuant to
Sections 4.1 and 4.2(c)(such cash and American Depositary Receipts
representing ADSs, together with the amount of any dividends or other
distributions payable with respect thereto, being hereinafter referred
to as the "Exchange Fund"). At or prior to the Effective Time, Parent
shall make available or cause to be made available to Morgan Guaranty
Trust Company of New York, as depositary under the Amended and Restated
Deposit Agreement, dated as of June 2, 1997 (the "Depositary"), the
Bearer Receipts to be represented by the ADSs referred to in Section
4.1(a) and will cause such Depositary to make available ADSs to the
Exchange Agent. Promptly following the Effective Time, Parent shall
cause to be made available to the Surviving Corporation all cash
required for the Exchange Fund.

A-3
266

(ii) Subject to allocation and proration in accordance with the
provisions of this Section 4.2, each record holder of Shares (other than
Excluded Shares) issued and outstanding immediately prior to the
Election Deadline (as defined below) shall be entitled (A) to elect to
receive in respect of each such Share (x) the Cash Consideration (a
"Cash Election") or (y) the Stock Consideration (a "Stock Election") or
(B) to indicate that such record holder has no preference as to the
receipt of Cash Consideration or Stock Consideration for such Shares (a
"Non-Election"). Shares in respect of which a Non-Election is made
(including Shares in respect of which such an election is deemed to have
been made pursuant to this Section 4.2 and Section 4.3, collectively,
"Non-Election Shares") shall be deemed by Parent, in its sole and
absolute discretion, subject to Sections 4.2(b)(v)-(vii), to be, in
whole or in part, Shares in respect of which Cash Elections or Stock
Elections have been made.

(iii) Elections pursuant to Section 4.2(b)(ii) shall be made on a
form and with such other provisions to be reasonably agreed upon by the
Company and Parent (a "Form of Election") to be provided by the Exchange
Agent for that purpose to holders of record of Shares (other than
holders of Excluded Shares), no later than 20 days before the
anticipated Closing Date. Elections shall be made by mailing to the
Exchange Agent a duly completed Form of Election. To be effective, a
Form of Election must be (x) properly completed, signed and submitted to
the Exchange Agent at its designated office, by 5:00 p.m., e.s.t., on
the business day that is four trading days following the Closing Date
(which date shall be publicly announced by Parent on the Closing Date)
(the "Election Deadline") and (y) accompanied by the Certificate(s)
representing the Shares as to which the election is being made (or by an
appropriate guarantee of delivery of such Certificate(s) by a commercial
bank or trust company in the United States or a member of a registered
national security exchange or of the National Association of Securities
Dealers, Inc., provided that such Certificates are in fact delivered to
the Exchange Agent within three trading days after the date of execution
of such guarantee of delivery). The Company shall use its best efforts
to make a Form of Election available to all Persons (as defined below)
who become holders of record of Shares (other than Excluded Shares)
between the date of mailing described in the first sentence of this
Section 4.2(b)(iii) and the Election Deadline. Parent shall determine,
in its sole and absolute discretion, which authority it may delegate in
whole or in part to the Exchange Agent, whether Forms of Election have
been properly completed, signed and submitted or revoked. The decision
of Parent (or the Exchange Agent, as the case may be) in such matters
shall be conclusive and binding. Neither Parent nor the Exchange Agent
will be under any obligation to notify any Person of any defect in a
Form of Election submitted to the Exchange Agent. A holder of Shares
that does not submit an effective Form of Election prior to the Election
Deadline shall be deemed to have made a Non-Election.

As used in this Agreement, the term "Person" means an individual,
corporation, partnership, joint venture, trust or unincorporated
organization or a government or any agency or political subdivision
thereof.

(iv) An election may be revoked, but only by written notice
received by the Exchange Agent prior to the Election Deadline. Any
Certificate(s) representing Shares that have been submitted to the
Exchange Agent in connection with an election shall be returned without
charge to the holder thereof in the event such election is revoked as
aforesaid and such holder requests in writing the return of such
Certificate(s). Upon any such revocation, unless a duly completed Form
of Election is thereafter submitted in accordance with paragraph
(b)(ii), such Shares shall be Non-Election Shares. In the event that
this Agreement is terminated pursuant to the provisions hereof and any
Certificates have been transmitted to the Exchange Agent pursuant to the
provisions hereof, such Certificates shall promptly be returned without
charge to the Person submitting the same.

(v) In the event that the aggregate number of Shares in respect of
which Cash Elections have been made (collectively, the "Cash Election
Shares") exceeds the Cash Election Number, all shares in respect of
which Stock Elections have been made (the "Stock Election Shares")

A-4
267

and all Non-Election Shares (which, in such event, shall be deemed to be
shares in respect of which Stock Elections have been made) shall be
converted into the right to receive the Stock Consideration, and all
Cash Election Shares shall be converted into the right to receive the
Stock Consideration or the Cash Consideration in the following manner:

(A) Cash Election Shares shall be deemed converted to Stock
Election Shares, on a pro-rata basis for each holder of record of
Shares with respect to those Shares, if any, of such holder of record
that are Cash Election Shares, so that the number of Cash Election
Shares remaining after such conversion shall equal as closely as
practicable the Cash Election Number, and all such Cash Election
Shares so converted shall be converted into the right to receive the
Stock Consideration (and cash in lieu of fractional ADSs); and

(B) the remaining Cash Election Shares shall be converted into
the right to receive the Cash Consideration.

(vi) In the event that the aggregate number of Stock Election
Shares exceeds the Stock Election Number, all Cash Election Shares and
all Non-Election Shares (which, in such event, shall be deemed to be
Shares in respect of which Cash Elections have been made) shall be
converted into the right to receive the Cash Consideration, and all
Stock Election Shares shall be converted into the right to receive the
Stock Consideration or the Cash Consideration in the following manner:

(A) Stock Election Shares shall be deemed converted into Cash
Election Shares, on a pro-rata basis for each record holder of Shares
with respect to those Shares, if any, of such record holder that are
Stock Election Shares, so that the number of Stock Election Shares
remaining after such conversion shall equal as closely as practicable
the Stock Election Number, and all such Shares so converted shall be
converted into the right to receive the Cash Consideration; and

(B) the remaining Stock Election Shares shall be converted into
the right to receive the Stock Consideration (and cash in lieu of
fractional ADSs).

(vii) In the event that neither clause (v) nor clause (vi) of this
Section 4.2(b) is applicable, Non-Election Shares shall be deemed Cash
Election Shares, on a pro-rata basis for each record holder of
Non-Election Shares, so that the total Cash Election Shares equals as
closely as practicable the Cash Election Number and any remaining
Non-Election Shares shall be deemed Stock Election Shares, and (x) all
Stock Election Shares and all Non-Election Shares in respect of which
Stock Elections are deemed to have been made shall be converted into the
right to receive the Stock Consideration (and cash in lieu of fractional
interests), and (y) all Cash Election Shares and all Non-Election Shares
in respect of which Cash Elections are deemed to have been made shall be
converted into the right to receive the Cash Consideration.

(viii) The Exchange Agent, in consultation with Parent and the
Company, shall make all computations to give effect to this Section 4.2.

(c) Distributions with Respect to Unexchanged Shares. No Person
holding a Certificate will be entitled after the Effective Time to receive
any dividend or distribution that may be declared or paid in respect of
ADSs receivable by such Person upon conversion of Shares represented by
such Certificate in the Merger until such Certificate is surrendered in
exchange for the Merger Consideration as provided herein, at which time any
dividends with a record date after the Effective Time with respect to ADSs
shall, subject to applicable law, be paid without interest to such Person
as though he had been a record holder of such ADSs at the time of such
record date.

(d) Transfers. After the Effective Time, there shall be no transfers
on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time.

(e) Fractional ADSs. Notwithstanding any other provision of this
Agreement, no fractional ADS will be issued and any holder of Shares
entitled to receive a fractional ADS but for this Section

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4.2(e) shall be entitled to receive a cash payment in lieu thereof, which
payment shall represent such holder's proportionate interest in an ADS
based on the Average Closing Price.

(f) Termination of Exchange Fund. Any portion of the Exchange Fund
(including the proceeds of any investments thereof and the ADSs made
available to the Exchange Agent) that remains unclaimed by the shareholders
of the Company for 180 days after the Effective Time shall be paid or, with
respect to the ADSs, delivered to Parent. Any shareholders of the Company
who have not theretofore complied with this Article IV shall thereafter
look only to Parent and Surviving Corporation for payment of the Merger
Consideration and any cash, dividends and other distributions in respect
thereof payable and/or issuable pursuant to Section 4.1 and Section 4.2(c)
upon due surrender of their Certificates (or affidavits of loss in lieu
thereof), in each case, without any interest thereon. Notwithstanding the
foregoing, none of Parent, the Surviving Corporation, the Exchange Agent or
any other Person shall be liable to any former holder of Shares for any
amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.

(g) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the Person claiming such Certificate to be
lost, stolen or destroyed and, if required by Parent, the posting by such
Person of a bond in customary amount as indemnity against any claim that
may be made against it with respect to such Certificate, the Exchange Agent
will issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration and any cash payable and any unpaid dividends or other
distributions in respect thereof pursuant to Section 4.2(c) upon due
surrender of and deliverable in respect of the Shares represented by such
Certificate pursuant to this Agreement.

(h) Affiliates. Notwithstanding anything herein to the contrary,
Certificates surrendered for exchange by any "affiliate" (as determined
pursuant to Section 6.9) of the Company shall not be exchanged until Parent
has received a written agreement from such Person as provided in Section
6.9 hereof.

4.3. Dissenters' Rights. No Dissenting Shareholder shall be entitled to
the Merger Consideration or cash in lieu of fractional ADSs or any dividends or
other distributions pursuant to this Article IV unless and until the holder
thereof shall have failed to perfect or shall have lost such holder's right to
dissent from the Merger under the BCA, and any Dissenting Stockholder shall be
entitled to receive only the payment provided by Section 1302 of the BCA with
respect to Shares owned by such Dissenting Stockholder. If any Person who
otherwise would be deemed a Dissenting Shareholder shall have failed to properly
perfect or shall have effectively lost the right to dissent with respect to any
Shares, such Shares shall thereupon be treated as Non-Election Shares. The
Company shall give Parent (i) prompt notice of any written demands for fair
value and any other instruments served pursuant to applicable law received by
the Company relating to shareholders' rights of dissent and (ii) the opportunity
to direct all negotiations and proceedings with respect to demands for fair
value under the BCA. The Company shall not, except with the prior written
consent of Parent, voluntarily make any payment with respect to any demands for
fair value of Dissenting Shares or offer to settle or settle any such demands.

4.4. Adjustments to Prevent Dilution. In the event that the Company
changes the number of Shares or securities convertible or exchangeable into or
exercisable for Shares, or Parent changes the number of ADSs or securities
convertible or exchangeable into or exercisable for Parent Shares, issued and
outstanding prior to the Effective Time as a result of a reclassification, stock
split, share combination, stock dividend (other than a regular interim or final
stock dividend) or distribution, recapitalization, merger, subdivision, issuer
tender or exchange offer, or other similar transaction, the Stock Consideration
shall be equitably adjusted.

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ARTICLE V

REPRESENTATIONS AND WARRANTIES

5.1. Representations and Warranties of the Company. Except as set forth
in the corresponding sections or subsections of the disclosure letter delivered
to Parent by the Company on or prior to entering into this Agreement (the
"Company Disclosure Letter"), the Company hereby represents and warrants to
Parent and Merger Sub that (the words "to the Knowledge of the Company" or to
"the Company's Knowledge" and any words of similar import shall mean that any
one of the persons listed in Exhibit A has actual knowledge of the matter;
provided, however, when such representations and warranties are given as of the
Closing Date as conditions to Closing, such words shall mean to the actual
knowledge of such persons after inquiry):

(a) Organization, Good Standing and Qualification. (i) Each of the
Company and its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction
of organization and has all requisite corporate or similar power and
authority to own and operate its properties and assets and to carry on its
business as presently conducted and is qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the
ownership or operation of its properties or conduct of its business
requires such qualification, except where the failure to be so qualified or
in good standing, when taken together with all other such failures, is not
reasonably likely to have a Company Material Adverse Effect (as defined
below). The Company has made available to Parent a complete and correct
copy of the Company's and its Subsidiaries' articles of incorporation and
by-laws or other comparable governing instruments, each as amended to date.
The Company's and its Subsidiaries' articles of incorporation and by-laws
so delivered are in full force and effect. Section 5.1(a) of the Company
Disclosure Letter contains a correct and complete list of each jurisdiction
where the Company and each of its Subsidiaries is organized and qualified
to do business.

As used in this Agreement, the term (x) "Subsidiary" means, with
respect to the Company, Parent or Merger Sub, as the case may be, any
entity, whether incorporated or unincorporated, of which at least a
majority of the securities or ownership interests having by their terms
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions is directly or indirectly owned
or controlled by such party or by one or more of its respective
Subsidiaries or by such party and any one or more of its respective
Subsidiaries and (y) "Company Material Adverse Effect" means a material
adverse effect on the financial condition, prospects, properties, business
or results of operations of the Company and its Subsidiaries taken as a
whole (provided, however, that a material adverse effect on the prospects
of the Company shall be deemed to exist only to the extent a development or
combination of developments have occurred and are reasonably likely to have
a material adverse effect on the financial condition, properties, business
or results of operations of the Company), excluding developments affecting
the insurance industry generally, or an effect which is reasonably likely
to prevent, materially delay or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement.

(ii) The Company conducts its insurance operations through Equitable
Life Insurance Company of Iowa, USG Annuity & Life Company, Golden American
Life Insurance Company, First Golden American Life Insurance Company of New
York and Equitable American Insurance Company (collectively with the
Company, the "Company Insurance Companies"). The Company Disclosure Letter
sets forth the states where the Company Insurance Companies are domiciled
or "commercially domiciled" for insurance regulatory purposes and such
other states where the transactions contemplated by this Agreement will
require Parent to obtain "change in control" approvals from state insurance
regulators. Each of the Company Insurance Companies is (i) duly licensed or
authorized as an insurance company in its jurisdiction of incorporation,
(ii) duly licensed or authorized as an insurance company and, where
applicable, a reinsurer in each other jurisdiction where it is required to
be so licensed or authorized, and (iii) duly authorized in its jurisdiction
of incorporation and each other applicable jurisdiction to write each line
of business reported as being

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written in the Company SAP Statements (as hereinafter defined), except, in
any such case, where the failure to be so licensed or authorized is not
reasonably likely to result in a Company Material Adverse Effect.

(iii) Except for the Company's Subsidiaries, the Company does not
directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for any equity or
similar interest in, any corporation, partnership, joint venture or other
business association or entity that directly or indirectly conducts any
activity which is material to the Company.

(b) Capital Structure. The authorized capital stock of the Company
consists of 70,000,000 Shares, of which 32,165,436 Shares were outstanding
as of the close of business on July 7, 1997, and 2,500,000 shares of serial
Preferred Stock, no par value (the "Preferred Shares"), of which no shares
were outstanding as of the date hereof. All of the outstanding Shares have
been duly authorized and are validly issued, fully paid and nonassessable.
Section 5.01(b) of the Company Disclosure Letter contains a correct and
complete list of all shares reserved for issuance and, if applicable, each
outstanding option or other right ((each a "Company Option"), including the
holder, date of grant, exercise price and number of Shares subject thereto)
as of the execution hereof to purchase Shares under (i) the Company's 1982
Stock Incentive Plan, Restated and Amended 1992 Stock Incentive Plan,
Non-Employee Directors' Stock Option Plan and Discretionary Stock Bonus
Plan (the "Stock Plans") and (ii) the Company's Dividend Reinvestment and
Stock Purchase Plans and the Company's Stock Purchase Plan. Each of the
outstanding shares of capital stock or other securities of each of the
Company's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and owned by a direct or indirect wholly-owned subsidiary of
the Company, free and clear of any lien, pledge, security interest, claim
or other encumbrance. Except as set forth above, there are no Shares
authorized, reserved, issued or outstanding and there are no outstanding
subscriptions, options, warrants, rights, convertible securities or other
agreements or commitments of any character relating to the issued or
unissued share capital or other ownership interest of the Company or any of
its Subsidiaries. The Company does not have outstanding any bonds,
debentures, notes or other obligations the holders of which have the right
to vote (or convertible into or exercisable for securities having the right
to vote) with the shareholders of the Company on any matter ("Voting
Debt").

(c) Corporate Authority; Approval and Fairness. (i) The Company has
all requisite corporate power and authority and has taken all corporate
action necessary in order to execute, deliver and perform its obligations
under this Agreement and to consummate, subject only to approval of this
Agreement by the holders of a majority of the outstanding Shares (the
"Company Requisite Vote"), the Merger. This Agreement is a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (the "Bankruptcy and Equity Exception").

(ii) The board of directors of the Company (A) has adopted the plan of
merger set forth herein and approved this Agreement and the other
transactions contemplated hereby and (B) has received the opinion of its
financial advisors, J.P. Morgan Securities Inc., to the effect that the
consideration to be received by the holders of the Shares in the Merger is
fair to such holders from a financial point of view, a copy of which
opinion has been delivered to Parent. It is agreed and understood that such
opinion is for the benefit of the Company's board of directors and may not
be relied on by Parent or Merger Sub.

(d) Governmental Filings; No Violations. (i) Other than the filings
and/or notices (A) pursuant to Section 1.3, (B) under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
Securities Act of 1933, as amended (the "Securities Act"), (C) to comply
with state securities or "blue-sky" laws, (D) required to be made with the
NYSE and (E) the filing of appropriate documents with, and the approval of,
the respective Commissioners of Insurance of

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Iowa, Delaware, New York, Oklahoma, Florida, Michigan and New Hampshire,
and such consents as may be required under the insurance laws of any state
in which the Company, Parent or any of their respective Subsidiaries is
domiciled or does business, no filings or notices are required to be made
by the Company with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by the Company from, any
governmental or regulatory authority, agency, commission, body or other
governmental entity ("Governmental Entity"), in connection with the
execution and delivery of this Agreement by the Company and the
consummation by the Company of the Merger and the other transactions
contemplated hereby, except those that the failure to make or obtain are
not, individually or in the aggregate, reasonably likely to have a Company
Material Adverse Effect.

(ii) The execution, delivery and performance of this Agreement by the
Company do not, and the consummation by the Company of the Merger and the
other transactions contemplated hereby will not, constitute or result in
(A) a breach or violation of, or a default under, the articles of
incorporation or by-laws of the Company or the comparable governing
instruments of any of its Subsidiaries, (B) a breach or violation of, or a
default under, the acceleration of any obligations or the creation of a
lien, pledge, security interest or other encumbrance on the assets of the
Company or any of its Subsidiaries (with or without notice, lapse of time
or both) pursuant to, any agreement, lease, contract, note, mortgage,
indenture, arrangement or other obligation, whether written or oral
("Contracts" and individually, a "Contract"), binding upon the Company or
any of its Subsidiaries or any Law (as defined in Section 5.1(i)) or
governmental or non-governmental permit or license to which the Company or
any of its Subsidiaries is subject or (C) any change in the rights or
obligations of any party under any Contract, except, in the case of clause
(B) or (C) above, for any breach, violation, default, acceleration,
creation or change that, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect and except that
the Company must obtain (Y) the affirmative vote of the variable annuity
contract holders and variable life policyholders (collectively, the
"Contract Holders") where contracts and policies are funded by investments
in the Equi-Select Series Trust ("ES Trust") or the GCG Trust ("GCG Trust")
(collectively the "Trusts") approving a new investment advisory agreement
between ES Trust and Equitable Investment Services, Inc. ("EISI"), a new
management agreement between GCG Trust and Directed Services, Inc. ("DSI"),
and new sub-advisory agreements between ES Trust, EISI and the
Sub-Advisers, and new portfolio management agreements between GCG Trust,
DSI and the Portfolio Managers, (all as those parties are defined in the
currently effective prospectuses of the Trusts), containing the same terms
and conditions as the current Investment Advisory Agreement, Management
Agreement, Sub-Advisory Agreements and Portfolio Management Agreements
(each such term as defined in the currently effective prospectuses of the
Trusts), respectively, except for dates of execution, effectiveness and
termination, and (Z) the approval of a majority of the Board of Trustees of
ES Trust or the Board of Governors of GCG Trust, as applicable, in each
case who are not "interested persons" under the Investment Company Act, of
a new investment advisory agreement, management agreement, sub-advisory
agreements, and portfolio management agreements, as described above (the
approvals referred to in clauses (Y) and (Z) collectively, the "Investment
Company Approvals").

(e) Company Reports; Financial Statements; Statutory Statements. (i)
The Company has delivered to Parent each registration statement, report,
proxy statement or information statement prepared by it since December 31,
1996 (the "Audit Date"), including (A) the Company's Annual Report on Form
10-K for the year ended December 31, 1996 (the "1996 10-K") and (B) the
Company's Quarterly Report on Form 10-Q for the period ended March 31,
1997, each in the form (including exhibits, annexes and any amendments
thereto) filed with the Securities and Exchange Commission (the "SEC")
under the Securities Act or the Exchange Act (collectively, including any
such reports filed with the SEC subsequent to the date hereof, the "Company
Reports"). As of their respective dates, the Company Reports did not, and
any Company Reports filed with the SEC subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein,

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in light of the circumstances in which they were made, not misleading. Each
of the consolidated balance sheets included in or incorporated by reference
into the Company Reports (including the related notes and schedules) fairly
presents, or will fairly present, the consolidated financial position of
the Company and its Subsidiaries as of its date and each of the
consolidated statements of income and of changes in stockholders' equity
included in or incorporated by reference into the Company Reports
(including any related notes and schedules) fairly presents, or will fairly
present, the results of operations, retained earnings and changes in
financial position, as the case may be, of the Company and its Subsidiaries
for the periods set forth therein (subject, in the case of unaudited
statements, to notes and normal year-end audit adjustments that will not be
material in amount or effect), in each case in accordance with accounting
principles generally accepted in the United States ("U.S. GAAP")
consistently applied during the periods involved, except as may be noted
therein.

(ii) Each of the Company Insurance Companies has filed all annual or
quarterly statements, together with all exhibits and schedules thereto,
required to be filed with or submitted to the appropriate regulatory
authorities of the jurisdiction in which it is domiciled or "commercially
domiciled" on forms prescribed or permitted by such authority
(collectively, the "Company SAP Statements"). Since January 1, 1995, the
financial statements included in the Company SAP Statements and prepared on
a statutory basis, including the notes thereto, have been prepared in all
material respects in accordance with accounting practices prescribed or
permitted by applicable regulatory authorities in effect as of the date of
the respective statements, and such accounting practices have been applied
on a substantially consistent basis throughout the periods involved, except
as expressly set forth in the notes or schedules thereto. Such financial
statements present fairly the respective statutory financial positions and
results of operations of each of the Company Insurance Companies as of
their respective dates and for the respective periods presented therein.

(f) Absence of Certain Changes. Except as disclosed in the Company
Reports filed prior to the date hereof, since the Audit Date the Company
and its Subsidiaries have conducted their respective businesses only in,
and have not engaged in any material transaction other than according to,
the ordinary and usual course of such businesses, and there has not been
(i) any change in the financial condition, properties, business or results
of operations of the Company and its Subsidiaries or any development or
combination of developments of which the Company has Knowledge that,
individually or in the aggregate, has had or is reasonably likely to have a
Company Material Adverse Effect; (ii) any damage, destruction or other
casualty loss with respect to any material asset or property owned, leased
or otherwise used by the Company or any of its Subsidiaries, whether or not
covered by insurance which is reasonably likely to have a Company Material
Adverse Effect; (iii) any change by the Company in accounting principles,
practices or methods; (iv) any declaration, setting aside or payment of any
dividend or other distribution in respect of the capital stock of the
Company, except for dividends or other distributions on its capital stock
publicly announced prior to the date hereof; (v) any material addition, or
any development involving a prospective material addition, to the Company's
consolidated reserves for future policy benefits or other policy claims and
benefits; or (vi) any material change in the accounting, actuarial,
investment, reserving, underwriting or claims administration policies,
practices or principles of any Company Insurance Company. Since the Audit
Date, except as provided for herein or as disclosed in the Company Reports
filed prior to the date hereof, there has not been any increase in the
compensation payable or that could become payable by the Company or any of
its Subsidiaries to officers or key employees or any amendment of any of
the Compensation and Benefit Plans (as defined in Section 5.1(h)) other
than increases or amendments in the ordinary course.

(g) Litigation and Liabilities. Except as disclosed in the Company
Reports filed prior to the date hereof, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the Knowledge of the Company, threatened against
the Company or any of its Affiliates or (ii) obligations or liabilities,
whether or not accrued, contingent or otherwise and whether or not required
to be disclosed, including those relating to matters involving

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any Environmental Law (as defined in Section 5.1(k)) and occupational
safety and health matters, or any other facts or circumstances of which the
Company has Knowledge that could result in any claims against, or
obligations or liabilities of, the Company or any of its Affiliates, except
for those that are not, individually or in the aggregate, reasonably likely
to have a Company Material Adverse Effect.

As used in this Agreement, "Affiliate" means, with respect to any
Person, any other Person that, directly or indirectly, controls or is
controlled by or is under common control with such first Person. As used in
this definition of "Affiliate", the term "control" and any derivatives
thereof mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract, or otherwise.

(h) Employee Benefits. (i) A copy of each bonus, incentive, deferred
compensation, pension, retirement, profit-sharing, thrift, savings,
employee stock ownership, stock bonus, stock purchase, restricted stock,
stock option, employment, termination, severance, compensation, medical,
health, welfare, fringe benefits or other plan, agreement, policy or
arrangement (whether oral or in writing) that covers employees, directors,
consultants, former employees or former directors of the Company and its
Subsidiaries (the "Compensation and Benefit Plans") and any trust agreement
or insurance contract forming a part of such Compensation and Benefit Plans
has been made available to Parent prior to the date hereof. The
Compensation and Benefit Plans are listed in Section 5.1(h)(i) of the
Company Disclosure Letter and any "change of control" or similar provisions
therein are specifically identified in Section 5.1(h)(i) of the Company
Disclosure Letter. Neither the Company nor any of its Subsidiaries has any
commitment, oral or written, to create any additional material Compensation
and Benefit Plan or to modify or change any existing Compensation and
Benefit Plan in a material respect.

(ii) All Compensation and Benefit Plans are in substantial compliance
with all applicable law, including the Code and the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and any regulations and
rules promulgated thereunder, and all required filings and disclosures with
respect to any Compensation and Benefit Plan have been timely made. More
specifically, the Company has at all times complied with Section 407 of
ERISA with respect to the holding and acquiring of "qualified employer
securities" as defined under ERISA. Each Compensation and Benefit Plan that
is an "employee pension benefit plan" within the meaning of Section 3(2) of
ERISA (a "Pension Plan") and that is intended to be qualified under section
401(a) of the Code has received all required favorable determination
letters (including a determination that the related trust under such
Compensation and Benefit Plan is exempt from tax under section 501(a) of
the Code) from the Internal Revenue Service (the "IRS"), and the Company is
not aware of any circumstances likely to result in revocation of any such
favorable determination letter. There is no pending or, to the Knowledge of
the Company, threatened legal action, suit, claim or governmental
investigation relating to any of the Compensation and Benefit Plans.
Neither the Company nor any of its Subsidiaries has engaged in a
transaction, or omitted to take any action, with respect to any
Compensation and Benefit Plan that, assuming the taxable period of such
transaction expired as of the date hereof, would subject the Company or any
of its Subsidiaries to a material tax or penalty imposed by either section
4975 of the Code or Section 502 of ERISA.

(iii) As of the date hereof, no liability (other than for payment of
premiums to the Pension Benefit Guaranty Corporation ("PBGC")) under
Subtitle C or D of Title IV of ERISA has been or is expected to be incurred
by the Company or any Subsidiary with respect to any ongoing, frozen or
terminated "single-employer plan", within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by any of them, or
the single-employer plan of any entity which is considered one employer
with the Company under Section 4001 of ERISA or section 414 of the Code (an
"ERISA Affiliate Plan"). The Company and its Subsidiaries have not incurred
and do not expect to incur any withdrawal liability with respect to a
multiemployer plan under Subtitle E to Title IV of ERISA. The Company and
its Subsidiaries have not contributed, or been obligated to contribute, to
a multiemployer plan under Subtitle E of Title IV of ERISA at any time
since September 26, 1980. No

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notice of a "reportable event", within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived, has been
required to be filed for any Pension Plan or any ERISA Affiliate Plan
within the 12-month period ending on the date hereof or will be required to
be filed in connection with the transactions contemplated by this
Agreement. The PBGC has not instituted proceedings to terminate any Pension
Plan or ERISA Affiliate Plan, and, to the Knowledge of the Company, no
condition exists that presents a material risk that such proceedings will
be instituted.

(iv) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan as of the date hereof
have been timely made or have been reflected on the Company's financial
statements. Neither any Pension Plan nor any ERISA Affiliate Plan has an
"accumulated funding deficiency" (whether or not waived) within the meaning
of section 412 of the Code or Section 302 of ERISA and all required
payments to the PBGC with respect to each Pension Plan or ERISA Affiliate
Plan have been made on or before their due dates. Neither the Company nor
its Subsidiaries (x) has provided, or is required to provide, security to
any Pension Plan or to any ERISA Affiliate Plan pursuant to section
401(a)(29) of the Code or (y) has taken any action, or omitted to take any
action, that has resulted, or would reasonably be expected to result, in
the imposition of a lien under section 412(n) of the Code or pursuant to
ERISA.

(v) Under each Pension Plan and ERISA Affiliate Plan, as of the last
day of the most recent plan year ended prior to the date hereof, the
actuarially determined present value of all "benefit liabilities", within
the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of
the actuarial assumptions contained in the Pension Plan's most recent
actuarial valuation), did not exceed the then current value of the assets
of such Pension Plan and, to the Knowledge of the Company, since such date
there has been neither an adverse change in the financial condition of such
Pension Plan or ERISA Affiliate Plan nor any amendment or other change to
such Pension Plan or ERISA Affiliate Plan that would increase the amount of
benefits thereunder which reasonably could be expected to change such
result.

(vi) Neither the Company nor any of its Subsidiaries have any
obligations for retiree health and life benefits under any Compensation and
Benefit Plan. The Company or its Subsidiaries may amend or terminate any
such plan under the terms of such retiree health and life plan at any time
without incurring any material liability thereunder. To the Knowledge of
the Company, there has been no communication to employees by the Company or
any of its Subsidiaries that would reasonably be expected to promise or
guarantee such employees retiree health or life insurance or other retiree
death benefits on a permanent basis.

(vii) The consummation of the Merger and the other transactions
contemplated by this Agreement will not (w) entitle any employee,
consultant or director of the Company or any of its Subsidiaries to any
payment (including severance pay or similar compensation) or any increase
in compensation, (x) accelerate the time of payment or vesting or trigger
any payment of compensation or benefits under, increase the amount payable
or trigger any other material obligation pursuant to, any of the
Compensation and Benefit Plans, (y) result in any breach or violation of,
or a default under, any of the Compensation and Benefit Plans or (z) result
in any payments by the Company or the Surviving Corporation being
non-deductible as an "excess parachute payment" pursuant to section 280G of
the Code.

(viii) Neither the Company nor any Subsidiary maintains any
Compensation and Benefit Plan covering employees working outside the United
States.

(ix) With respect to each Compensation and Benefit Plan, if
applicable, the Company has provided, made available, or will make
available upon request, to Parent, true and complete copies of existing:
(i) Compensation and Benefit Plan documents and amendments thereto; (ii)
trust instruments and insurance contracts; (iii) the two most recent Forms
5500 filed with the IRS; (iv) the most recent actuarial report and
financial statement; (v) the most recent summary plan description; (vi) the
forms filed with the PBGC (other than for premium payments); (vii) the most

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recent determination letter issued by the IRS; (viii) any Form 5310 or Form
5330 filed with the IRS; and (ix) the most recent nondiscrimination tests
performed under ERISA and the Code (including 401(k) and 401(m) tests).

(x) The disallowance of a deduction under section 162(m) of the Code
for employee remuneration does not apply to any amount payable by the
Company or any of its Subsidiaries.

(i) Compliance with Laws; Permits. (i) The business and operations of
the Company Insurance Companies have been conducted in compliance with all
applicable federal, state and local statutes and regulations regulating the
business and products of insurance and all applicable orders and directives
of insurance regulatory authorities (including federal authorities with
respect to variable insurance and annuity products) and market conduct
recommendations resulting from market conduct examinations of insurance
regulatory authorities (including federal authorities with respect to
variable insurance and annuity products) (collectively, "Insurance Laws"),
except where the failure to so conduct such business and operations would
not, individually or in the aggregate, be reasonably likely to have a
Company Material Adverse Effect. Notwithstanding the generality of the
foregoing, except where the failure to do so would not, individually or in
the aggregate, be reasonably likely to have a Company Material Adverse
Effect, each Company Insurance Company and its agents have marketed, sold
and issued insurance products in compliance, in all material respects, with
all Insurance Laws applicable to the business of such Company Insurance
Company and in the respective jurisdictions in which such products have
been sold, including, without limitation, in compliance with (A) all
applicable prohibitions against "redlining", (B) all applicable
requirements relating to the disclosure of the nature of insurance products
as policies of insurance and (C) all applicable requirements relating to
insurance product projections and illustrations. In addition, (X) there is
no pending or, to the Knowledge of the Company, threatened charge by any
insurance regulatory authority that any of the Company Insurance Companies
has violated, nor any pending or, to the Knowledge of the Company,
threatened investigation by any insurance regulatory authority with respect
to possible violations of, any applicable Insurance Laws where such
violations would, individually or in the aggregate, be reasonably likely to
have a Company Material Adverse Effect; (Y) none of the Company Insurance
Companies is subject to any order or decree of any insurance regulatory
authority relating specifically to such Company Insurance Company (as
opposed to insurance companies generally) which would, individually or in
the aggregate, be reasonably likely to have a Company Material Adverse
Effect; and (Z) the Company Insurance Companies have filed all reports
required to be filed with any insurance regulatory authority on or before
the date hereof as to which the failure to file such reports would
individually or in the aggregate, be reasonably likely to have a Company
Material Adverse Effect.

(ii) In addition to Insurance Laws, except as set forth in the Company
Reports filed prior to the date hereof, the businesses of each of the
Company and its Subsidiaries have not been, and are not being, conducted in
violation of any federal, state, local or foreign law, statute, ordinance,
rule, regulation, judgment, order, injunction, decree, arbitration award,
agency requirement, license or permit of any Governmental Entity or the
NASD (collectively, "Laws"), except where the failure to so conduct such
business would not, individually or in the aggregate, be reasonably likely
to have a Company Material Adverse Effect. Except as set forth in the
Company Reports filed prior to the date hereof and except as would not be
reasonably likely to have a Company Material Adverse Effect, no
investigation or review by any Governmental Entity with respect to the
Company or any of its Subsidiaries is pending or, to the Knowledge of the
Company, threatened, nor has any Governmental Entity indicated an intention
to conduct the same. To the Knowledge of the Company, no material change is
required in the Company's or any of its Subsidiaries' processes, properties
or procedures in connection with any such Laws, and the Company has not
received any notice or communication of any material noncompliance with any
such Laws that has not been cured as of the date hereof. The Company and
its Subsidiaries each has all permits, licenses, franchises, variances,
exemptions, orders and other governmental authorizations, consents and
approvals necessary to conduct its business as presently conducted except
those the absence of which are not, individually or in the

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aggregate, reasonably likely to have a Company Material Adverse Effect.
None of the Company's Subsidiaries which is a registered broker-dealer has
entered into or is subject to a restrictions letter agreement with the
NASD.

(j) Takeover Statutes. No "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation (each a
"Takeover Statute") or any applicable anti-takeover provision in the
Company's articles of incorporation and by-laws is, or at the Effective
Time will be, applicable to the Company, the Shares, the Merger, the
Shareholders Agreement or the other transactions contemplated by the
Agreement. The board of directors of the Company has approved the
transactions contemplated by this Agreement under Section 1109 of the BCA.

(k) Environmental Matters. To the Knowledge of the Company, except as
disclosed in the Company Reports filed prior to the date hereof and except
for such matters that would not, individually or in the aggregate, be
reasonably likely to have a Company Material Adverse Effect: (i) the
Company and its Subsidiaries are in compliance with all applicable
Environmental Laws; (ii) no real property currently or formerly owned or
operated by the Company or any of its Subsidiaries is contaminated with any
Hazardous Substance; (iii) neither the Company nor any of its Subsidiaries
is subject to liability under any Environmental Law for off-site disposal
or contamination; (iv) neither the Company nor any of its Subsidiaries has
received any claim, notice, demand or letter indicating that it may be in
violation of, or subject to liability under, any Environmental Law; (v)
neither the Company nor any of its Subsidiaries is subject to any order,
decree, injunction or agreement with any Governmental Entity or any third
party relating to any Environmental Law; and (vi) there are no
circumstances or conditions involving the Company or any of its
Subsidiaries that could result in any claims, liabilities, costs or
property restrictions pursuant to any Environmental Law.

As used in this Agreement, "Environmental Law" means any law,
regulation, order, decree, common law, opinion or agency requirement
relating to the protection of the environment or human health and safety
and "Hazardous Substance" means any substance in any concentration that is
listed, classified or regulated pursuant to any Environmental Law including
but not limited to petroleum products, asbestos, lead products and
polychlorinated biphenyls.

(l) Tax Matters. As of the date hereof, neither the Company nor any
of its Affiliates has taken or agreed to take any action, nor does the
Company have any Knowledge of any fact or circumstance, that would prevent
the Merger and the other transactions contemplated by this Agreement from
qualifying as a "reorganization" within the meaning of section 368(a) of
the Code.

(m) Taxes. (i) The Company and each of its Subsidiaries (A) have
prepared in good faith and duly and timely filed, or there has been duly
and timely filed on its behalf, (in each case taking into account any
extension of time within which to file) all Tax Returns (as defined below)
required to be filed by any of them except to the extent that any failure
to file would not, individually or in the aggregate, be reasonably likely
to have a Company Material Adverse Effect or, with respect to federal Tax
Returns, a material adverse effect on the financial condition, prospects
(as defined in Section 5.1(a)), properties or results of operations of any
of Equitable Life Insurance Company of Iowa, USG Annuity & Life Company and
Golden American Life Insurance Company (a "Subsidiary Material Adverse
Effect"); (B) have paid (or there has been paid on its behalf) all Taxes
(as defined below) that are shown as due on such filed Tax Returns or that
the Company or any of its Subsidiaries are obligated to withhold from
amounts owing to any employee, creditor or third party, except with respect
to matters contested in good faith or to the extent that any such failure
to pay such Taxes would not, individually or in the aggregate, have a
Company Material Adverse Effect or, with respect to federal Taxes, a
Subsidiary Material Adverse Effect; (C) have duly paid in full or made
provisions in accordance with U.S. generally accepted accounting principles
for the payment of (or there has been paid on its behalf or such provisions
have been made on its behalf for the payment of) all Taxes for all periods
ending through the date hereof, except to the extent that any failure to
pay or make provision for the payment of such Taxes would not, individually
or in the

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aggregate, be reasonably likely to have a Company Material Adverse Effect
or, with respect to federal Taxes, a Subsidiary Material Adverse Effect;
and (D) have not waived any statute of limitations with respect to Taxes or
agreed to any extension of time with respect to a Tax assessment or
deficiency. As of the date hereof, there are not pending or threatened any
audits, examinations, investigations or other proceedings in respect of
Taxes or Tax matters. There are not any unresolved questions or claims
concerning the Company's or any of its Subsidiaries' Tax liability that are
reasonably likely to have a Company Material Adverse Effect. The Company
has made available to Parent true and correct copies of the United States
federal income Tax Returns filed by the Company and its Subsidiaries for
each of the fiscal years ended December 31, 1993, 1994 and 1995.

As used in this Agreement, (1) the term "Tax"(including, with
correlative meaning, the terms "Taxes", and "Taxable") includes all
federal, state, local and foreign income, profits, premium, franchise,
gross receipts, environmental, customs duty, capital stock, severances,
stamp, payroll, sales, employment, unemployment, disability, use, property,
withholding, excise, production, value added, occupancy and other taxes,
duties or assessments of any nature whatsoever, together with all interest,
penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions, and (2) the term "Tax
Return" includes all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information returns)
required to be supplied to a Tax authority relating to Taxes.

(ii) All annuity contracts and life insurance policies issued by each
Company Insurance Company meet all definitional or other requirements for
qualification under the Code section applicable (or intended to be
applicable) to such annuity contracts or life insurance policies,
including, without limitation, the following: (A) each life insurance
policy meets the requirements of sections 101(f), 817(h) or 7702 of the
Code, as applicable; (B) no life insurance contract issued by any Company
Insurance Company is a "modified endowment contract" within the meaning of
section 7702A of the Code unless and to the extent that the holders of the
policies have been notified of their classification; (C) each annuity
contract issued, entered into or sold by any Company Insurance Company
qualifies as an annuity under federal tax law; (D) each annuity contract
meets the requirements of, and has been administered consistent with
section 817(h) and 72 of the Code including but not limited to section
72(s) of the Code (except for those contracts specifically excluded from
such requirement pursuant to section 72(s)(5) of the Code); (E) each
annuity contract intended to qualify under sections 130, 403(a), 403(b) or
408(b) of the Code contains all provisions required for qualification under
such sections of the Code; (F) each annuity contract marketed as, or in
connection with, plans that are intended to qualify under section 401, 403,
408 or 457 of the Code complies with the requirements of such section; and
(G) none of the Company Insurance Companies have entered into any agreement
or are involved in any discussions or negotiations and there are no audits,
examinations, investigations or other proceedings with the IRS with respect
to the failure of any life insurance policy under section 7702 or 817(h) of
the Code or the failure of any annuity contract to meet the requirements of
section 72(s) of the Code. There are no "hold harmless" indemnification
agreements respecting the tax qualification or treatment of any product or
plan sold, issued, entered into or administered by the Company Insurance
Companies, and there have been no claims asserted by any Person under such
"hold harmless" indemnification agreements so set forth.

(n) Labor Matters. Neither the Company nor any of its Subsidiaries is
a party to or otherwise bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization, nor is the Company or any of its Subsidiaries the subject of
any material proceeding asserting that the Company or any of its
Subsidiaries has committed an unfair labor practice or seeking to compel it
to bargain with any labor union or labor organization nor is there pending
or, to the Knowledge of the Company, threatened, nor has there been for the
past five years, any labor strike, dispute, walk-out, work stoppage,
slow-down or lockout involving the Company or any of its Subsidiaries.

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(o) Insurance. All material fire and casualty, general liability,
directors' and officers', and sprinkler and water damage insurance policies
maintained by the Company or any of its Subsidiaries are with reputable
insurance carriers, provide full and adequate coverage for all normal risks
incident to the business of the Company and its Subsidiaries and their
respective properties and assets, and are in character and amount at least
equivalent to that carried by Persons subject to the same or similar perils
or hazards, except for any such failures to maintain insurance policies
that, individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect.

(p) Intellectual Property.

(i) Section 5.1(p) of the Disclosure Letter lists all material
copyrights, patents, trademarks, trade names, service marks, any
applications therefor, technology, knowhow, trade secrets, computer
software programs or applications, and tangible or intangible proprietary
information or materials ("Intellectual Property") owned or licensed by the
Company and/or each of its Subsidiaries. The Company and/or each of its
Subsidiaries owns, or is licensed or otherwise possesses legally
enforceable rights to use, all Intellectual Property that is used in the
business of the Company and its Subsidiaries as currently conducted, except
for any such failures to own, be licensed or possess that, individually or
in the aggregate, are not reasonably likely to have a Company Material
Adverse Effect, and to the Knowledge of the Company all patents,
trademarks, trade names, service marks and copyrights held by the Company
and/or its Subsidiaries are valid and subsisting.

(ii) Except as disclosed in Company Reports filed prior to the date
hereof or as is not reasonably likely to have a Company Material Adverse
Effect:

(A) the Company is not, nor will it be as a result of the execution
and delivery of this Agreement or the performance of its obligations
hereunder, in violation of any licenses, sublicenses and other
agreements as to which the Company is a party and pursuant to which the
Company is authorized to use any third-party Intellectual Property
("Third-Party Intellectual Property Rights");

(B) no claims with respect to (I) Intellectual Property owned by
the Company or any its Subsidiaries (the "Company Intellectual Property
Rights"); (II) any trade secret material to the Company; or (III)
Third-Party Intellectual Property Rights are currently pending or, to
the Knowledge of the Company, are threatened by any Person;

(C) the Company does not have Knowledge of any valid grounds for
any bona fide claims (I) to the effect that the manufacture, sale,
licensing or use of any product as now used, sold or licensed or
proposed for use, sale or license by the Company or any of its
Subsidiaries, infringes on any copyright, patent, trademark, trade name,
service mark or trade secret; (II) against the use by the Company, or
any of its Subsidiaries, of any Intellectual Property used in the
business of the Company or any of its Subsidiaries as currently
conducted or as proposed to be conducted; (III) challenging the
ownership, validity or effectiveness of any of the Company Intellectual
Property Rights or other trade secret material to the Company; or (IV)
challenging the license or legally enforceable right to use of the
Third-Party Intellectual Rights by the Company or any of its
Subsidiaries; and

(D) to the Knowledge of the Company, there is no unauthorized use,
infringement or misappropriation of any of the Company Intellectual
Property Rights by any third party, including any employee or former
employee of the Company or any of its Subsidiaries.

(q) Brokers and Finders. Neither the Company nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in
connection with the Merger or the other transactions contemplated in this
Agreement, except that the Company has employed J.P. Morgan Securities Inc.
as its financial advisor, which arrangements have been disclosed to Parent
prior to the date hereof.

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(r) No Regulatory Disqualifications. To the Knowledge of the Company,
no event has occurred or condition exists or, to the extent it is within
the reasonable control of the Company, will occur or exist with respect to
the Company that, in connection with obtaining any regulatory Consents
required for the Merger, would cause the Company to fail to satisfy on its
face any applicable statute or written regulation of any applicable
insurance regulatory authority, which is reasonably likely to have a
Company Material Adverse Effect.

(s) Assets. (i) Except as would not be reasonably likely to have a
Company Material Adverse Effect and except for Company Permitted Liens and
Encumbrances (as defined below), the Company and/or its Subsidiaries have
good and valid title to all personal property (including, without
limitation, Company Investment Assets (as defined below)) that was carried
as an asset on the Company's financial statements in the 1996 10-K or
acquired in the ordinary course of business since December 31, 1996, other
than with respect to those assets which have been disposed of in the
ordinary course of business or redeemed in accordance with their terms
since such date or with respect to statutory deposits which are subject to
certain restrictions on transfer. As used in this Agreement, "Company
Permitted Liens and Encumbrances" means, as to any assets or property, any
(i) liens or encumbrances securing taxes, assessments or other governmental
charges which are not yet due and payable or which are being diligently
contested in good faith by appropriate proceedings if adequate reserves
have been established in accordance with U.S. GAAP or the statutory
accounting principles and practices prescribed or permitted by the
insurance department of the state of domicile of a Company Insurance
Company as appropriate, or, in the case of mortgage loans, funds are held
in escrow sufficient to discharge such liens or the borrower has posted a
bond in the amount of such lien, (ii) liens or encumbrances imposed by law
or incurred in the ordinary course of business with respect to the claims
of materialmen, mechanics, carriers, warehousemen, landlords and other
Persons which (A) are not yet due and payable and which do not materially
detract from the value of such property or assets or materially impair the
use thereof by the Company and its Subsidiaries in the operation of their
respective businesses, or (B) are being diligently contested in good faith
and by proper proceedings if adequate reserves have been established with
respect thereto in accordance with U.S. GAAP or the statutory accounting
principles and practices prescribed or permitted by the insurance
department of the state of domicile or "commercial domicile" of a Company
Insurance Company, as appropriate, and (iii) liens and encumbrances that
would not, individually or in the aggregate, be reasonably likely to have a
Company Material Adverse Effect. As used in this Agreement "Company
Investment Assets" means bonds, stocks, mortgage loans or other investments
that are carried on the books and records of the Company and the Company
Insurance Companies.

(ii) The Company SAP Statements for each Company Insurance Company for
the year ended December 31, 1996 set forth a list, which list is accurate
and complete in all material respects, of all Company Investment Assets
owned by such Company Insurance Company as of December 31, 1996, together
with the cost basis book or amortized value, as the case may be, of such
Company Investment Assets as of December 31, 1996.

(t) Computer Technology. The Company owns, or possesses valid license
rights to, all computer software programs and hardware that are material to
the conduct of the business of the Company and its Subsidiaries taken as a
whole. There are no infringement suits, actions or proceedings pending or,
to the Knowledge of the Company, threatened against the Company or any
Company Insurance Company with respect to any software or hardware owned or
licensed by the Company or any of its Subsidiaries, which, if determined
adversely, would, individually or in the aggregate, be reasonably likely to
have a Company Material Adverse Effect. The Company has adequate software
and hardware to permit it to operate its business as currently conducted by
it. The execution, delivery and performance of this Agreement by the
Company do not, and the consummation by the Company of the Merger and the
other transactions contemplated hereby will not, constitute or result in
the termination, the option to terminate, breach or violation of the terms
of any purchase or license of software or hardware.

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(u) Insurance Business. (i) Except as otherwise would not,
individually or in the aggregate, be reasonably likely to have a Company
Material Adverse Effect, all policies, binders, slips, certificates,
annuity contracts and participation agreements and other agreements of
insurance, whether individual or group, in effect as of the date hereof
(including all applications, supplements, endorsements, riders and
ancillary agreements in connection therewith) that are issued by the
Company Insurance Companies (the "Company Insurance Contracts") and any and
all marketing materials, are, to the extent required under applicable law,
on forms approved by applicable insurance regulatory authorities or which
have been filed and not objected to by such authorities within the period
provided for objection, and such forms comply in all material respects with
the insurance statutes, regulations and rules applicable thereto. Section
5.1(u) of the Disclosure Letter contains (A) a true and complete list of
all forms of Insurance Contracts that (1) are currently used by the Company
to sell insurance products or (2) have been used by the Company to sell
insurance products since January 1, 1985 for business which is still in
force and represents greater than $20,000,000 of insurance in force and (B)
relevant financial information for certain years for the Insurance
Contracts. Premium rates established by the Company Insurance Companies
that are required to be filed with or approved by insurance regulatory
authorities have been so filed or approved, the premiums charged conform
thereto in all material respects, and such premiums comply in all material
respects with the insurance statutes, regulations and rules applicable
thereto, except where the failure to be so filed or approved, or to so
conform or comply, would not, individually or in the aggregate, be
reasonably likely to have a Company Material Adverse Effect.

(ii) Prior to the date hereof, the Company has delivered to Parent a
true and correct summary of each material Contract between any Company
Insurance Company and its respective reinsurance intermediaries. No agent,
manager, reinsurance intermediary, broker or distributor of any Company
Insurance Company has binding authority on behalf of any Company Insurance
Company. No insurance agent, manager, reinsurance intermediary, broker or
distributor, or group of related agents, reinsurance intermediaries,
brokers or distributors (except employees of any Company Insurance
Company), accounted for more than ten percent of the gross premium income
or annuity deposits or charges of any of the Company Insurance Companies
for the year ended December 31, 1996.

(iii) Prior to the date hereof, the Company has delivered to Parent a
true and complete copy of any actuarial reports prepared by actuaries,
independent or otherwise, with respect to any Company Insurance Company
since December 31, 1994, and all attachments, addenda, supplements and
modifications thereto (the "Company Actuarial Analyses"). To the Knowledge
of the Company, the information and data furnished by the Company or any
Company Insurance Company to its independent actuaries in connection with
the preparation of the Company Actuarial Analyses were accurate in all
material respects. Furthermore, each Company Actuarial Analysis was based
upon an accurate inventory of policies in force for the Company and the
Company Insurance Companies, as the case may be, at the relevant time of
preparation, was prepared using appropriate modeling procedures accurately
applied and in conformity with generally accepted actuarial standards
consistently applied, and the projections contained therein were properly
prepared in accordance with the assumptions stated therein.

(iv) None of Standard & Poor's Corporation, Moody's Investors Service,
Inc. or A.M. Best Company has told the Company that any rating presently
held by the Company Insurance Companies is likely to be modified,
qualified, lowered or placed under such surveillance or review for any
reason, including as a result of the transactions contemplated hereby.

(v) Prior to the date hereof, the Company has delivered to Parent true
and complete summaries of all analyses, reports and other data prepared by
any Company Insurance Company or submitted by any Company Insurance Company
to any insurance regulatory authority relating to risk-based capital
calculations or IRIS ratios as of December 31, 1996.

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(vi) Prior to the date hereof, the Company has delivered to Parent a
true and correct list on an aggregate basis of the maximum underlying
retentions (net of all reinsurance maintained) on all insurance and
reinsurance policies written or entered into by any Company Insurance
Company since December 31, 1994.

(v) Liabilities and Reserves. (i) The reserves carried on the Company
SAP Statements of each Company Insurance Company for the year ended
December 31, 1996 for future insurance policy benefits, losses, claims and
similar purposes are in compliance in all material respects with the
requirements for reserves established by the insurance departments of the
state of domicile of such Company Insurance Company, were determined in all
material respects in accordance with generally accepted actuarial standards
consistently applied, and are fairly stated in all material respects in
accordance with sound actuarial principles. The Company has delivered to
Parent true, correct and complete copies of the actuarial valuation reports
delivered to the insurance department of the domiciliary state of each
Company Insurance Company for the years ended December 31, 1996 and 1995.

(ii) Except for regular periodic assessments in the ordinary course of
business or assessments based on developments which are publicly known
within the insurance industry, to the Knowledge of the Company, no claim or
assessment is pending or threatened against any Company Insurance Company
which is peculiar or unique to such Company Insurance Company by any state
insurance guaranty associations in connection with such association's fund
relating to insolvent insurers which if determined adversely, would,
individually or in the aggregate, be reasonably likely to have a Company
Material Adverse Effect.

(w) Separate Accounts; Investment Advisor. (i) Each separate account
maintained by a Company Insurance Company is listed in Section 5.01(w) of
the Company Disclosure Letter (collectively, the "Company Separate
Accounts"). Except as otherwise would not, individually or in the
aggregate, be reasonably likely to have a Company Material Adverse Effect,
each Company Separate Account is duly and validly established and
maintained under the laws of its state of formation and is either excluded
from the definition of an investment company pursuant to Section 3(c)(11)
of the Investment Company Act of 1940 (the "1940 Act") or is duly
registered as an investment company under the 1940 Act. Except as otherwise
would not, individually or in the aggregate, have a Company Material
Adverse Effect, each such Company Separate Account, if registered, is
operated in compliance with the 1940 Act, has filed all reports and
amendments of its registration statement required to be filed, and has been
granted all exemptive relief necessary for its operations as presently
conducted. Except as otherwise would not, individually or in the aggregate,
be reasonably likely to have a Company Material Adverse Effect, the Company
Insurance Contracts under which the Company Separate Accounts assets are
held are duly and validly issued and are either exempt from registration
under the Securities Act pursuant to Section 3(a)(2) of the Securities Act
or were sold pursuant to an effective registration statement under the
Securities Act, and any such registration statement is currently in effect
to the extent necessary to allow the appropriate Company Insurance Company
to receive contributions under such policies.

(ii) The assets of each Company Separate Account are adequately
diversified within the meaning of section 817(h) of the Code.

(iii) Each of the Company Insurance Companies is treated for federal
tax purposes as the owner of the assets underlying the respective life
insurance policies and annuity contracts issued, entered into or sold by
it.

(iv) Except as set forth in the Company Reports, neither the Company
nor any of its Subsidiaries conducts activities of an "investment advisor"
as such term is defined in Section 2(a)(20) of the 1940 Act, whether or not
registered under the Investment Advisers Act of 1940, as amended. Neither
the Company nor any of its Subsidiaries is an "investment company" as
defined under the 1940 Act, and neither the Company nor any of its
Subsidiaries sponsors any Person that is such an investment company.

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(x) Rights Agreement. The Company has amended the Rights Agreement to
provide that the Merger will not entitle any Person to acquire securities
of any Person at a discount, regardless of whether there is an Acquiring
Person and the Rights Agreement will terminate immediately prior to the
Effective Time.

(y) Investigation by the Company. In entering into this Agreement,
the Company has relied solely upon its own investigation and analysis and
the representations and warranties contained herein, and the Company

(i) acknowledges that none of Parent, its Subsidiaries or any of their
respective directors, officers, employees, Affiliates, agents or
representatives makes any representation or warranty, either express or
implied, as to the accuracy or completeness of any of the information
provided or made available to the Company or its agents or representatives
prior to the execution of this Agreement except to the extent Parent, its
Subsidiaries or any of their respective directors, officers, employees,
Affiliates, agents or representatives commits fraud with respect to the
information that any of them provides or makes available to the Company;
and

(ii) agrees, to the fullest extent permitted by law, that none of
Parent, its Subsidiaries or any of their respective directors, officers,
employees, Affiliates, agents or representatives shall have any liability
or responsibility whatsoever to the Company on any basis (including,
without limitation, in contract or tort, under federal or state securities
laws or otherwise) based upon any information provided or made available,
or statements made, to the Company prior to the execution of this
Agreement, except that the foregoing shall not apply (1) to the extent
Parent makes the specific representations and warranties set forth in
Section 5.2 of this Agreement, but always subject to the limitations and
restrictions contained in this Agreement, or (2) to the extent Parent, its
Subsidiaries or any of their respective directors, officers, employees,
Affiliates, agents or representatives commits fraud with respect to the
information that any of them provides or makes available to the Company.

5.2. Representations and Warranties of Parent and Merger Sub. Parent and
Merger Sub each hereby represent and warrant to the Company, that (the words "to
the Knowledge of Parent" or "to Parent's Knowledge" and any words of similar
import shall mean that any one of the persons listed in Exhibit B has actually
knowledge of the matter, provided, however, when such representations and
warranties are given as of the Closing Date as conditions to Closing, such words
shall mean to the best knowledge of such persons after inquiry):

(a) Capitalization of Merger Sub. As of the date hereof, the
authorized capital stock of Merger Sub consists of 1,000 shares of Common
Stock, par value $1.00 per share, of which one share is validly issued and
outstanding. All of the issued and outstanding capital stock of Merger Sub
is, and at the Effective Time will be, directly owned by Parent, and there
are (i) no other shares of capital stock or voting securities of Merger
Sub, (ii) no securities of Merger Sub convertible into or exchangeable for
shares of capital stock or voting securities of Merger Sub and (iii) no
options or other rights to acquire from Merger Sub, and no obligations of
Merger Sub to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
Merger Sub. Merger Sub has not conducted any business prior to the date
hereof and has no, and prior to the Effective Time will have no, assets,
liabilities or obligations of any nature other than those incident to its
formation and pursuant to this Agreement, the Merger and the other
transactions contemplated by this Agreement.

(b) Organization, Good Standing and Qualification. Each of Parent and
its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of organization
and has all requisite corporate or similar power and authority to own and
operate its properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the ownership or operation
of its properties or conduct of its business requires such qualification,
except where the failure to be so qualified or in such good standing, when
taken together with all other such failures, is not reasonably likely to
have a Parent Material Adverse Effect (as defined below). Parent

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has made available to the Company a complete and correct copy of the
governing instruments of Parent and Merger Sub, each as amended to date.
Such governing instruments so delivered are in full force and effect.

As used in this Agreement, the term "Parent Material Adverse Effect"
means a material adverse effect on the financial condition, prospects,
properties, business or results of operations of Parent and its
Subsidiaries taken as a whole (provided, however, that a material adverse
effect on the prospects of Parent shall be deemed to exist only to the
extent a development or combination of developments have occurred and are
reasonably likely to have a material adverse effect on the financial
condition, properties, business or results of operations of Parent),
excluding developments affecting the banking, investment banking and
insurance industries generally or an effect which is reasonably likely to
prevent, materially delay or materially impair the ability of Parent or
Merger Sub to consummate the transactions contemplated by this Agreement.

(c) Capital Structure. The authorized capital stock of Parent
consists of 1,500,000,000 Parent Shares, of which 822,206,760 Parent Shares
were outstanding as of the close of business on May 31, 1997, and
100,000,000 A preference shares, nominal value NLG 2.50 ("A Shares"),
200,000,000 B preference shares, nominal value NLG 2.50 ("B shares"), and
900,000,000 cumulative preference shares, nominal value NLG 2.50 (the
"Cumulative Preference Shares"), of which 8,780,450 A shares, no B Shares
and no Cumulative Preferred Shares were outstanding as of the close of
business on May 31, 1997. The A Shares, B Shares and Cumulative Preference
Shares are sometimes collectively referred to as the "Preference Shares".
All of the outstanding Parent Shares and A Shares have been duly authorized
and are validly issued, fully paid and nonassessable. As of June 18, 1997,
7,475,000 ADSs had been offered and sold in the United States by or on
behalf of Parent. Parent has no options or warrants to acquire Parent
Shares or Preference Shares, except that, as of December 31, 1996, there
were options for 1,505,355 Parent Shares pursuant to the Parent's Stock
Option Plan and at April 30, 1997, there were warrants to acquire
61,361,539 Bearer Receipts. Prior to the Effective Date, Parent will have
taken all necessary action to permit it to provide, and at all times from
the date hereof through consummation of the Merger or termination of this
Agreement will have available a number of Parent Shares which will be
sufficient to permit consummation of the Merger. Each such Parent Share
will be validly issued, fully paid and nonassessable, and will not be
subject to any preemptive rights. The ADSs which are the Stock
Consideration, the Bearer Receipts represented by such ADSs, and the Parent
Shares represented by such Bearer Receipts will be registered under the
Securities Act and the Exchange Act and registered or exempt from
registration under any applicable state blue sky or securities laws. Except
as set forth above, there are no Parent Shares authorized, reserved, issued
or outstanding and there are no outstanding subscriptions, options,
warrants, rights, convertible securities or other agreements or commitments
of any character relating to the issued or unissued share capital or other
ownership interest of Parent.

(d) Corporate Authority. No vote of holders of capital stock of
Parent is necessary to approve this Agreement and the Merger and the other
transactions contemplated hereby. Each of Parent and Merger Sub has all
requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under
this Agreement and to consummate the Merger. This Agreement is a valid and
binding agreement of Parent and Merger Sub, enforceable against each of
Parent and Merger Sub in accordance with its terms, subject to the
Bankruptcy and Equity Exception.

(e) Governmental Filings; No Violations. Other than the filings
and/or notices (A) pursuant to Section 1.3, (B) under the HSR Act, the
Securities Act and the Exchange Act, (C) to comply with state securities or
"blue sky" laws, (D) required to be made with the NYSE and (E) the filing
of appropriate documents with, and the approval of, the respective
Commissioners of Insurance of Iowa, Oklahoma, Delaware, New York, Florida,
Michigan and New Hampshire, and such consents as may be required under the
insurance laws of any state or country in which the Company, Parent or any
of their respective subsidiaries is domiciled or does business, no filings
or notices are required to

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be made by Parent or Merger Sub with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by Parent or
Merger Sub from, any Governmental Entity, in connection with the execution
and delivery of this Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the Merger and the other
transactions contemplated hereby, except those that the failure to make or
obtain are not, individually or in the aggregate, reasonably likely to have
a Parent Material Adverse Effect.

(ii) The execution, delivery and performance of this Agreement by
Parent and Merger Sub do not, and the consummation by Parent and Merger Sub
of the Merger and the other transactions contemplated hereby will not,
constitute or result in (A) a breach or violation of, or a default under,
the Articles of Association of Parent, the articles of incorporation or
by-laws of Merger Sub or the comparable governing instruments of any of
Parent's Subsidiaries, (B) a breach or violation of, or a default under,
the acceleration of any obligations or the creation of a lien, pledge,
security interest or other encumbrance on the assets of Parent or any of
its Subsidiaries (with or without notice, lapse of time or both) pursuant
to, any Contract binding upon Parent or any of its Subsidiaries or any Law
or governmental or non-governmental permit or license to which Parent or
any of its Subsidiaries is subject or (C) any change in the rights or
obligations of any party under any Contract, except, in the case of clause
(B) or (C) above, for any breach, violation, default, acceleration,
creation or change that, individually or in the aggregate, is not
reasonably likely to have a Parent Material Adverse Effect.

(f) Parent Reports; Financial Statements; Statutory
Statements. (i) Parent has delivered to the Company its registration
statement on Form F-1 (including exhibits, annexes and any amendments
thereto) in the form filed with the SEC (which form together with any
reports filed with the SEC subsequent to the date hereof, the "Parent
Reports"). As of their respective dates, the Parent Reports did not, and
any Parent Reports filed with the SEC subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were
made, not misleading. Each of the consolidated balance sheets included in
or incorporated by reference into the Parent Reports (including the related
notes and schedules) fairly presents, or will fairly present, the
consolidated financial position of Parent and its Subsidiaries as of its
date and each of the consolidated profit and loss accounts and consolidated
statements of cash flows in or incorporated by reference into the Parent
Reports (including any related notes and schedules) fairly presents, or
will fairly present, the results of operations, changes in stockholders'
equity and cash flows, as the case may be, of Parent and its Subsidiaries
for the periods set forth therein (subject, in the case of unaudited
statements, to notes and normal year-end audit adjustments that will not be
material in amount or effect), in each case in accordance with accounting
principles generally accepted in the Netherlands consistently applied
during the periods involved, except as may be noted therein, together, in
the case of its registration statement on Form F-1, with a reconciliation
of net profit, stockholders' equity and net profit per share as of December
31, 1996 and 1995 to U.S. GAAP.

(ii) Each of the Parent Insurance Subsidiaries (as defined in (i)
below) domiciled in the United States has filed all annual and quarterly
statements, together with all exhibits and schedules thereto, required to
be filed with or submitted to the appropriate regulatory authorities of the
jurisdiction in which it is domiciled or "commercially domiciled" on forms
prescribed or permitted by such authority (collectively, the "Parent SAP
Statements"). Since January 1, 1995, financial statements included in the
Parent SAP Statements and prepared on a statutory basis, including the
notes thereto, have been prepared in all material respects in accordance
with accounting practices prescribed or permitted by applicable regulatory
authorities in effect as of the date of the respective statements, and such
accounting practices have been applied on a substantially consistent basis
throughout the periods involved, except as expressly set forth in the notes
or schedules thereto. Such financial statements present fairly the
respective statutory financial positions and results of operations of each
of the Parent Insurance Subsidiaries as of their respective dates and for
the respective periods presented therein.

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(g) Absence of Certain Changes. Except as disclosed in the Parent
Reports filed prior to the date hereof, since December 31, 1996 (the
"Parent Audit Date") Parent and its Subsidiaries have conducted their
respective businesses only in, and have not engaged in any material
transaction other than according to, the ordinary and usual course of such
businesses and there has not been (i) any change in the financial
condition, prospects, properties, business or results of operations of
Parent and its Subsidiaries or any development or combination of
developments of which Parent has Knowledge that, individually or in the
aggregate, has had or is reasonably likely to have a Parent Material
Adverse Effect; (ii) any damage, destruction or other casualty loss with
respect to any material asset or property owned, leased or otherwise used
by Parent or any of its Subsidiaries, whether or not covered by insurance,
which is reasonably likely to have a Parent Material Adverse Effect; (iii)
any change by Parent in accounting principles, practices or methods; or
(iv) any declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock of Parent, except for
dividends or other distributions on its capital stock publicly announced
prior to the date hereof. Since the Parent Audit Date, except as provided
for herein or as disclosed in the Parent Reports filed prior to the date
hereof, there has not been any increase in the compensation payable or that
could become payable by Parent or any of its Subsidiaries to officers or
key employees or any amendment of any of the Parent Compensation and
Benefit Plans other than increases or amendments in the ordinary course.

(h) Litigation and Liabilities. Except as disclosed in the Parent
Reports filed prior to the date hereof, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the Knowledge of Parent, threatened against
Parent or any of its Affiliates or (ii) obligations or liabilities, whether
or not accrued, contingent or otherwise and whether or not required to be
disclosed, including those relating to environmental and occupational
safety and health matters, or any other facts or circumstances of which
Parent has Knowledge that could result in any claims against, or
obligations or liabilities of, Parent or any of its Affiliates, except for
those that are not, individually or in the aggregate, reasonably likely to
have a Parent Material Adverse Effect.

(i) Compliance with Laws. (i) The insurance business and operations
of Parent conducted through its Subsidiaries (the "Parent Insurance
Subsidiaries") have been conducted in compliance with all applicable
Insurance Laws, except where the failure to so conduct such business and
operations would not individually or in the aggregate have a Parent
Material Adverse Effect. Notwithstanding the generality of the foregoing,
except where the failure to do so would not, individually or in the
aggregate, be reasonably likely to have a Parent Material Adverse Effect,
each Parent Insurance Subsidiary and its agents have marketed, sold and
issued insurance products in compliance, in all material respects, with all
Insurance Laws applicable to the business of such Parent Insurance
Subsidiary and in the respective jurisdictions in which such products have
been sold, including, without limitation, in compliance with (A) all
applicable prohibitions against "redlining", (B) all applicable
requirements relating to the disclosure of the nature of insurance products
as policies of insurance and (C) all applicable requirements relating to
insurance product projections and illustrations. In addition, (X) there is
no pending or, to the Knowledge of Parent, threatened charge by any
insurance regulatory authority that any of the Parent Insurance
Subsidiaries has violated, nor any pending or, to the Knowledge of Parent,
threatened investigation by any insurance regulatory authority with respect
to possible violations of, any applicable Insurance Laws where such
violations would, individually or in the aggregate, be reasonably likely to
have a Parent Material Adverse Effect; (Y) none of the Parent Insurance
Subsidiaries is subject to any order or decree of any insurance regulatory
authority relating specifically to such Parent Insurance Subsidiary (as
opposed to insurance companies generally) which would, individually or in
the aggregate, be reasonably likely to have a Parent Material Adverse
Effect; and (Z) the Parent Insurance Subsidiaries have filed all reports
required to be filed with any insurance regulatory authority on or before
the date hereof as to which the failure to file such reports would,
individually or in the aggregate, be reasonably likely to have a Parent
Material Adverse Effect.

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(ii) In addition to Insurance Laws, except as set forth in the Parent
Reports filed prior to the date hereof, the businesses of each of Parent
and its Subsidiaries have not been, and are not being, conducted in
violation of any Laws. Except as set forth in the Parent Reports filed
prior to the date hereof and except as would not be reasonably likely to
have a Parent Material Adverse Effect, no investigation or review by any
Governmental Entity with respect to Parent or any of its Subsidiaries is
pending or, to the Knowledge of Parent, threatened, nor has any
Governmental Entity indicated an intention to conduct the same. To the
Knowledge of Parent, no material change is required in Parent's or any of
its Subsidiaries' processes, properties or procedures in connection with
any such Laws, and Parent has not received any notice or communication of
any material noncompliance with any such Laws that has not been cured as of
the date hereof. Parent and its Subsidiaries each has all permits,
licenses, trademarks, patents, trade names, copyrights, service marks,
franchises, variances, exemptions, orders and other governmental
authorizations, consents and approvals necessary to conduct its business as
presently conducted except those the absence of which are not, individually
or in the aggregate, reasonably likely to have a Parent Material Adverse
Effect.

(j) Tax Matters. As of the date hereof, neither Parent nor any of its
Affiliates has taken or agreed to take any action, nor does Parent have any
Knowledge of any fact or circumstance, that would prevent the Merger and
the other transactions contemplated by this Agreement from qualifying as a
"reorganization" within the meaning of section 368(a) of the Code.

(k) Brokers and Finders. Neither Parent nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in
connection with the Merger or the other transactions contemplated by this
Agreement, except that Parent has employed Salomon Brothers Inc as its
financial advisor, the arrangements with which have been disclosed in
writing to the Company prior to the date hereof.

(l) Available Funds. Parent has or will have available to it all
funds necessary to satisfy all of its obligations hereunder and in
connection with the Merger and the other transactions contemplated by this
Agreement.

(m) Taxes and Tax Returns. (i) each of Parent and the Parent
Subsidiaries has (i) prepared in good faith and duly and timely filed (or
there has been timely filed on its behalf) with appropriate governmental
authorities all Tax Returns required to be filed by it on or prior to the
date thereof, except to the extent that any failure to file would not,
individually or in the aggregate, have a Parent Material Adverse Effect,
and (ii) duly paid in full or made provisions in accordance with Dutch
generally accepted accounting principles (or there has been paid or
provision has been made on its behalf) for the payment of all material
Taxes for all periods ending through the date hereof, except to the extent
that any failure to pay or make provision for the payment of such Taxes
would not, individually or in the aggregate, have a Material Adverse
Effect; and

(ii) there is no proceeding presently pending with regard to any Taxes
or Tax Returns of Parent or the Parent Subsidiaries wherein an adverse
determination or ruling would be reasonably likely to occur which in the
aggregate would have a Parent Material Adverse Effect.

(n) Collective Bargaining. Neither Parent nor any of its Subsidiaries
is party to a collective bargaining agreement with respect to persons
employed in the United States.

(o) Parent Ownership of Company Common Stock. As of the date hereof,
Parent does not "own" (as defined in Section 1109 of the BCA), and does not
"beneficially own" (as defined in the Company Rights Agreement) 10% or more
of the outstanding Company Common Stock.

(p) Interim Operations of Merger Sub. Merger Sub was formed solely
for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations
only as contemplated hereby.

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(q) Investigation by Parent. In entering into this Agreement, Parent
has relied solely upon its own investigation and analysis and the
representations and warranties contained herein, and Parent:

(i) acknowledges that none of the Company, its Subsidiaries or any
of their respective directors, officers, employees, Affiliates, agents
or representatives makes any representation or warranty, either express
or implied, as to the accuracy or completeness of any of the information
provided or made available to Parent or their agents or representatives
prior to the execution of this Agreement except to the extent the
Company, its Subsidiaries or any of their respective directors,
officers, employees, Affiliates, agents or representatives commits fraud
with respect to the information that any of them provides or makes
available to Parent; and

(ii) agrees, to the fullest extent permitted by law, that none of
the Company, its Subsidiaries or any of their respective directors,
officers, employees, Affiliates, agents or representatives shall have
any liability or responsibility whatsoever to Parent on any basis
(including, without limitation, in contract or tort, under federal or
state securities laws or otherwise) based upon any information provided
or made available, or statements made, to Parent prior to the execution
of this Agreement, except that the foregoing shall not apply (1) to the
extent the Company makes the specific representations and warranties set
forth in Section 5.1 of this Agreement and in the Company Disclosure
Letter, but always subject to the limitations and restrictions contained
in this Agreement, or (2) to the extent the Company, its Subsidiaries or
any of their respective directors, officers, employees, Affiliates,
agents or representatives commits fraud with respect to the information
that any of them provides or makes available to Parent.

(r) No Regulatory Disqualifications. To the Knowledge of Parent, no
event has occurred or condition exists or, to the extent it is within the
reasonable control of Parent, will occur or exist with respect to Parent
that, in connection with obtaining any regulatory consents required for the
Merger, would cause Parent to fail to satisfy on its face any applicable
statute or written regulation of any applicable insurance regulatory
authority, which is, individually or in the aggregate, reasonably likely to
have a Parent Material Adverse Effect.

ARTICLE VI

COVENANTS

6.1. Company Interim Operations. Except as set forth in the Company
Disclosure Letter, the Company covenants and agrees as to itself and each of its
Subsidiaries that, after the date hereof and prior to the Effective Time (unless
Parent shall otherwise approve in writing and except as otherwise expressly
contemplated by this Agreement):

(a) its business shall be conducted in the ordinary and usual course,
consistent with past practice, and, to the extent consistent therewith, it
shall use its best efforts to preserve its business organization intact and
maintain its existing relations and goodwill with customers, suppliers,
distributors, agents, regulators, creditors, lessors, employees and
business associates;

(b) it shall not (i) issue, sell, pledge, dispose of or encumber any
capital stock owned by it in any of its Subsidiaries; (ii) amend its
articles of incorporation or by-laws or comparable governing instruments;
(iii) split, combine or reclassify its outstanding shares of capital stock;
(iv) declare, set aside or pay any dividend payable in cash, stock or
property in respect of any capital stock other than dividends from its
direct or indirect wholly-owned Subsidiaries and other than regular
quarterly cash dividends paid by the Company not in excess of $0.165 per
Share; or (v) repurchase, redeem or otherwise acquire, except in connection
with the Stock Plans, or permit any of its Subsidiaries to purchase or
otherwise acquire, any shares of its capital stock or any securities
convertible into or exchangeable or exercisable for any shares of its
capital stock;

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(c) it shall not (i) issue, sell, pledge, dispose of or encumber any
shares of, or securities convertible into or exchangeable or exercisable
for, or options, warrants, rights or agreements of any kind to acquire, any
shares of its capital stock of any class or any Voting Debt (other than
Shares issuable pursuant to options outstanding on the date hereof under
the Stock Plan or Shares issued pursuant to the Company's Dividend
Reinvestment and Stock Purchase Plan); (ii) other than in the ordinary and
usual course of business, transfer, lease, license, guarantee, sell,
mortgage, pledge, dispose of or encumber any other property or assets
(including capital stock of any of its Subsidiaries) or incur or modify any
material indebtedness or other liability; (iii) incur any indebtedness with
a maturity of one year or more; or (iv) make or authorize or commit for any
capital expenditures other than as contemplated by the Company's current
capital budget or, other than in the ordinary course of business consistent
with the Company's present investment policies, by any means, make any
acquisition of, or investment in, assets or stock of any other Person or
entity;

(d) it shall not terminate, establish, adopt, enter into, make any
new, or accelerate the vesting or payment of any existing, grants or awards
under, amend or otherwise modify, any Compensation and Benefit Plans or
increase the salary, wage, bonus or other compensation of any employees
except increases occurring in the ordinary and usual course of business
(which shall include normal periodic performance reviews and related
compensation and benefit increases) and except for bonuses to certain
employees and executive officers of the Company not to exceed $100,000 in
the aggregate;

(e) except as provided in Section 6.1(e) of the Disclosure Schedule,
it shall not settle or compromise any material claims or litigation or,
except in the ordinary and usual course of business modify, amend or
terminate any of its material Contracts or waive, release or assign any
material rights or claims;

(f) it shall not make any Tax election or permit any insurance policy
naming it as a beneficiary or loss-payable payee to be canceled or
terminated except in the ordinary and usual course of business;

(g) it shall not take any action or omit to take any action that would
cause any representation or warranty of the Company herein to become untrue
in any material respect; and

(h) it shall not authorize any of, or commit or agree to take into any
of, the foregoing actions.

6.2. Parent Interim Operations. Except as set forth on the Parent
Disclosure Schedule, Parent covenants and agrees as to itself and each of its
Subsidiaries that, after the date hereof and prior to the Effective Time (unless
the Company shall otherwise approve in writing and except as otherwise expressly
contemplated by this Agreement):

(a) it shall not amend its governing instruments in any manner that
would have any adverse impact on the transactions contemplated by this
Agreement or which would amend or modify the terms or provisions of the
capital stock of Parent;

(b) effect any reclassification, stock split, stock combination, or
stock dividend with Parent Shares (other than a stock split, stock dividend
or similar transaction to which Section 4.4 is applicable and other than
regular interim and final stock dividends);

(c) merge or consolidate with any other Person if such merger or
consolidation could reasonably be expected to have material adverse impact
on the ability of Parent to consummate the transactions contemplated by
this Agreement;

(d) it shall not declare, set aside or pay any dividend payable in
cash, stock or property in respect of any capital stock other than (i)
dividends from its direct or indirect wholly-owned Subsidiaries, (ii)
regular interim and final cash and stock dividends paid by Parent and (iii)
dividends paid on Parent Preferred Stock in accordance with its terms;

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(e) it shall not issue, sell, pledge, dispose of or encumber any
shares of, or securities convertible into or exchangeable or exercisable
for, or options, warrants, rights or agreements of any kind to acquire, any
shares of its capital stock of any class or any Voting Debt or any other
property or assets (other than Shares issuable pursuant to Parent Stock
Plans) if any such action could, individually or in the aggregate,
reasonably be expected to (i) delay materially the date of mailing of the
Proxy Statement such that the Closing would be delayed past March 31, 1998,
(ii) if it were to occur after such date of mailing, require an amendment
of the Proxy Statement such that the Closing would be delayed past March
31, 1998 or (iii) have a material adverse effect on the ability of Parent
to consummate the transactions contemplated by this Agreement;

(f) it shall not acquire any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof, in each case if any such action could, individually or in the
aggregate, reasonably be expected to (i) delay materially the date of
mailing of the Proxy Statement such that the Closing would be delayed past
March 31, 1998, (ii) if it were to occur after such date of mailing,
require any amendment of the Proxy Statement such that the Closing would be
delayed past March 31, 1998 or (iii) have a material adverse effect on the
ability of Parent to consummate the transactions contemplated by this
Agreement; and

(g) it shall not authorize any of, or commit or agree to take any of,
the foregoing actions.

6.3. Acquisition Proposals. The Company agrees that neither it nor any of
its Subsidiaries nor any of the officers and directors of it or any of its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) ("Representatives") not to, directly or indirectly, initiate,
solicit, encourage or otherwise facilitate any inquiries or the making of any
proposal or offer with respect to a merger, reorganization, share exchange,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, it or any of its
Subsidiaries (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal"). The Company further agrees that neither it nor any of
its Subsidiaries nor any of the officers and directors of it or any of its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its and its Subsidiaries' Representatives not to, directly or indirectly, engage
in any negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any Person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; provided, however, that nothing contained in this
Agreement shall prevent the Company or its board of directors from (A) complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal; (B) providing information in response to a request therefor by a
Person who has made an unsolicited bona fide written Acquisition Proposal if the
board of directors of the Company receives from the Person so requesting such
information an executed confidentiality agreement on terms substantially similar
to those contained in the Confidentiality Agreement dated May 30, 1997
(referenced in Section 9.7); (C) engaging in any negotiations or discussions
with any Person who has made an unsolicited bona fide written Acquisition
Proposal; or (D) recommending such an Acquisition Proposal to the shareholders
of the Company, if and only to the extent that, (i) in each such case referred
to in clause (B), (C) or (D) above, the board of directors of the Company
determines in good faith after consultation with, and after receipt of a written
opinion from, outside legal counsel that such action is necessary in order for
its directors to comply with their fiduciary duties under applicable law and
(ii) in each case referred to in clause (C) or (D) above, the board of directors
of the Company determines in good faith (after consultation with its financial
advisor) that such Acquisition Proposal, if accepted, is reasonably likely to be
consummated, taking into account all legal, financial and regulatory aspects of
the proposal and the financial capacity and any other relevant characteristics
of the Person making the proposal and would, if consummated, result in a
transaction more favorable to the Company's shareholders from a financial point
of view than the transaction contemplated by this Agreement (any such more
favorable Acquisition Proposal being referred to in this Agreement as a
"Superior Proposal"). The Company agrees that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to

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any of the foregoing. The Company also agrees that it will promptly request each
Person that has heretofore executed a confidentiality agreement in connection
with its consideration of acquiring it or any of its Subsidiaries to return or
destroy all confidential information heretofore furnished to such Person by or
on behalf of the Company or any of its Subsidiaries. The Company agrees that it
will take the necessary steps to promptly inform the individuals or entities
referred to in the first sentence hereof of the obligations undertaken in this
Section 6.3 and in the Confidentiality Agreement dated June 30, 1997. The
Company agrees that it will notify Parent immediately if any such inquiries,
proposals or offers are received by, any such information is requested from, or
any such discussions or negotiations are sought to be initiated or continued
with, any of its officers, directors or Representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any proposals or offers and thereafter shall keep Parent informed,
on a current basis, on the status and terms of any such proposals or offers and
the status of any such negotiations or discussions.

6.4. Information Supplied. The Company and Parent each agrees, as to
itself and its Subsidiaries, that none of the information supplied or to be
supplied by it or its Subsidiaries for inclusion or incorporation by reference
in (i) the Registration Statement on Form F-4 to be filed with the SEC by Parent
in connection with the issuance of ADSs in the Merger (including the proxy
statement and prospectus (the "Prospectus/Proxy Statement") constituting a part
thereof) (the "F-4 Registration Statement") will, at the time the F-4
Registration Statement becomes effective under the Securities Act or (ii) the
Prospectus/Proxy Statement and any amendment or supplement thereto will, at the
date of mailing to shareholders and at the times of the meetings of shareholders
of the Company to be held in connection with the Merger, in either such case
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

6.5. Shareholders Meeting. The Company will take, in accordance with
applicable law and its articles of incorporation and by-laws, all action
necessary to convene a meeting of holders of Shares (the "Shareholders Meeting")
as promptly as practicable after the F-4 Registration Statement is declared
effective to consider and vote upon the approval of this Agreement and the
Merger. Subject to fiduciary obligations under applicable law, the Company's
board of directors shall recommend such approval and shall take all lawful
action to solicit such approval.

6.6. Filings; Other Actions; Notification. (a) Parent and the Company
shall promptly prepare and file with the SEC the Prospectus/Proxy Statement, and
Parent shall prepare and file with the SEC the F-4 Registration Statement as
promptly as practicable. Parent and the Company each shall use its best efforts
to have the F-4 Registration Statement declared effective under the Securities
Act as promptly as practicable after such filing, and promptly thereafter mail
the Prospectus/Proxy Statement to the shareholders of the Company. Parent shall
also use its best efforts to obtain prior to the effective date of the F-4
Registration Statement all necessary state securities law or "blue sky" permits
and approvals required in connection with the Merger and to consummate the other
transactions contemplated by this Agreement and will pay all expenses incident
thereto.

(b) The Company and Parent each shall use its best efforts to cause to be
delivered to the other party and its directors letters of its independent
auditors, dated (i) the date on which the F-4 Registration Statement shall
become effective and (ii) the Closing Date, and addressed to the other party and
its directors, in form and substance customary for "comfort" letters delivered
by independent public accountants in connection with registration statements
similar to the F-4 Registration Statement.

(c) The Company shall use its best efforts to cause the Trusts to promptly
prepare and file with the SEC a Proxy Statement with respect to the votes of the
Contract Holders referenced in Section 5.1(d)(ii)(Y) hereof and will use its
best efforts to cause to be taken in accordance with applicable law and the
contracts and agreements governing voting by Contract Holders, all action
necessary to convene meetings of Contract Holders as promptly as practicable to
consider and vote upon the approval of the matters set forth in Section 5.1(d)
hereof. The Company shall use its best efforts to obtain (i) the recommendation
of such approvals by the board of trustees or board of governors, as the case
may be,

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with respect to each such vote and shall take or cause to be taken all lawful
action to solicit such approval and (ii) the approvals referenced in Section
5.1(d)(ii)(Z).

(d) The Company and Parent shall cooperate with each other and use (and
shall cause their respective Subsidiaries to use) their respective best efforts
to take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable on its part under this Agreement and applicable
Laws to consummate and make effective the Merger and the other transactions
contemplated by this Agreement and as soon as practicable, including preparing
and filing as promptly as practicable all documentation to effect all necessary
notices, reports and other filings and to obtain as promptly as practicable all
consents, registrations, approvals, permits and authorizations necessary or
advisable to be obtained from any third party and/or any Governmental Entity in
order to consummate the Merger or any of the other transactions contemplated by
this Agreement; provided, however, that nothing in this Section 6.6 shall
require, or be construed to require, Parent or the Company to proffer to, or
agree to, sell or hold separate and agree to sell, before or after the Effective
Time, any assets, businesses, or interests in any assets or businesses of
Parent, the Company or any of their respective Affiliates (or to consent to any
sale, or agreement to sell, by the Company of any of its assets or businesses)
or to agree to any material changes or restriction in the operations of any such
assets or businesses. Subject to applicable laws relating to the exchange of
information, Parent and the Company shall have the right to review in advance,
and to the extent practicable each will consult the other with respect to all
the information relating to Parent or the Company, as the case may be, and any
of their respective Subsidiaries, that appear in any filing made with, or
written materials submitted to, any third party and/or any Governmental Entity
in connection with the Merger and the other transactions contemplated by this
Agreement. In exercising the foregoing right, each of the Company and Parent
shall act reasonably and as promptly as practicable.

(e) The Company and Parent each shall, upon request by the other, furnish
the other with all information concerning itself, its Subsidiaries, directors,
officers and shareholders and such other matters as may be reasonably necessary
or advisable in connection with the Prospectus/Proxy Statement, the F-4
Registration Statement or any other statement, filing, notice or application
made by or on behalf of Parent, the Company or any of their respective
Subsidiaries to any third party and/or any Governmental Entity in connection
with the Merger and the transactions contemplated by this Agreement.

(f) The Company and Parent each shall keep the other apprised of the status
of matters relating to completion of the transactions contemplated hereby,
including promptly furnishing the other with copies of notice or other
communications received by Parent or the Company, as the case may be, or any of
its Subsidiaries, from any third party and/or any Governmental Entity with
respect to the Merger and the other transactions contemplated by this Agreement.
The Company and Parent each shall give prompt notice to the other of any change
that is reasonably likely to result in a Company Material Adverse Effect or
Parent Material Adverse Effect, respectively.

6.7. Taxation. Subject to Section 6.3, neither Parent nor the Company
shall take or cause to be taken any action, whether before or after the
Effective Time, that would disqualify the Merger as a "reorganization" within
the meaning of section 368(a) of the Code.

6.8. Access. Upon reasonable notice, and except as may otherwise be
required by applicable law, the Company and Parent each shall (and shall cause
its Subsidiaries to) afford the other's officers and Representatives access,
during normal business hours throughout the period prior to the Effective Time,
to its properties, books, contracts and records and, during such period, each
shall (and shall cause its Subsidiaries to) furnish promptly to the other all
information concerning its business, properties and personnel as may reasonably
be requested, provided that no investigation pursuant to this Section shall
affect or be deemed to modify any representation or warranty made by the
Company, Parent or Merger Sub, and provided, further, that the foregoing shall
not require the Company or Parent to permit any inspection, or to disclose any
information, that in the reasonable judgment of the Company or Parent, as the
case may be, would result in the disclosure of any trade secrets of third
parties or violate any of its obligations with respect to confidentiality if the
Company or Parent, as the case may be, shall have used

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best efforts to obtain the consent of such third party to such inspection or
disclosure. All requests for information made pursuant to this Section shall be
directed to an executive officer of the Company or Parent, as the case may be,
or such Person as may be designated by either of its officers, as the case may
be. All such information shall be governed by the terms of the Confidentiality
Agreements.

6.9. Affiliates. Prior to the date of the Shareholders Meeting, Parent
shall deliver to the Company a list of names and addresses of those Persons who
are, in the opinion of the Parent, as of the time of the Shareholders Meeting
referred to in Section 6.5, "affiliates" of the Company within the meaning of
Rule 145 under the Securities Act. The Company shall provide to Parent such
information and documents as Parent shall reasonably request for purposes of
preparing such list. There shall be added to such list the names and addresses
of any other Person subsequently identified by either Parent or the Company as a
Person who may be deemed to be such an affiliate of the Company; provided,
however, that no such Person identified by Parent shall remain on the list of
affiliates of the Company if Parent shall receive from the Company, on or before
the date of the Shareholders Meeting, an opinion of counsel reasonably
satisfactory to Parent to the effect that such Person is not such an affiliate.
The Company shall exercise its best efforts to deliver or cause to be delivered
to Parent, prior to the date of the Shareholders Meeting, from each affiliate of
the Company identified in the foregoing list (as the same may be supplemented as
aforesaid) who makes or is deemed to have made a Stock Election or whose Cash
Election is converted to a Stock Election pursuant to Section 4.2(b), a letter
dated as of the Closing Date substantially in the form attached as Exhibit A-1
(the "Affiliates Letter"). Parent shall not be required to maintain the
effectiveness of the F-4 Registration Statement or any other registration
statement under the Securities Act for the purposes of resale of ADSs by such
affiliates received in the Merger and the American Depositary Receipts
representing ADSs received by such affiliates shall bear a customary legend
regarding applicable Securities Act restrictions and the provisions of this
Section. With a view to making available to such affiliates the benefits of
certain rules and regulations of the SEC which may permit the sale of ADSs
without registration, at all times after the Effective Time Parent shall (i)
make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act, (ii) file with the SEC in a timely
manner all reports and other documents required of the Parent under the
Securities Act and the Exchange Act and (c) so long as such an affiliate owns
any ADSs, to furnish such affiliate forthwith upon such affiliate's request a
written statement by the Parent as to its compliance with the reporting
requirements of said Rule 144 and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly reports of Parent and such other
reports and documents so filed by Parent as such affiliate may reasonably
request in availing itself of any rule or regulation of the SEC allowing such
affiliate to sell any such securities without registration.

6.10. Stock Exchange Listing and De-listing. Parent shall use its best
efforts to cause the ADSs to be issued in the Merger to be approved for listing
on the NYSE, subject to official notice of issuance, prior to the Closing Date.
The Surviving Corporation shall use its best efforts to cause the Shares to be
de-listed from the NYSE and de-registered under the Exchange Act as soon as
practicable following the Effective Time.

6.11. Publicity. The Company and Parent each shall consult with each
other prior to issuing any press releases or otherwise making public
announcements with respect to the Merger and the other transactions contemplated
by this Agreement and prior to making any filings with any third party and/or
any Governmental Entity (including any national securities exchange) with
respect thereto, except as may be required by law or by obligations pursuant to
any listing agreement with or rules of any national securities exchange.

6.12. Stock Options; Performance Awards; Cash Awards and Restricted
Stock. (a) Immediately prior to the Effective Time, each Company Option granted
by the Company under the Stock Plans which is outstanding immediately prior to
the Effective Time (and has not been exercised as of the Effective Time) shall
be terminated and the holder of each such Company Option shall be entitled to
receive from the Company a lump sum cash payment equal to (A) the product of (i)
the excess of (x) the Cash Consideration over (y) the per Company Share exercise
price applicable to such Company Option, multiplied by (ii) the number of Shares
subject to such Company Option, plus (B) any cash awards

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associated with any such Company Option less (C) any amounts required to be
withheld, under applicable tax law, from such lump sum payment. The Company
shall take or cause to be taken any and all action necessary to provide for such
termination of the Company Options, including obtaining all applicable consents
from holders.

(b) As to the awards under the Key Employee Incentive Plan based upon 1997
performance, any payments to be made with respect to those awards as a result of
a "change of control" (as defined therein) shall be made at the same time that
the awards would normally have been made in 1998. With respect to the Company
Performance Sharing Plan for 1997, in the event of a change of control in 1997,
as defined in the Restated and Amended Key Employee Incentive Plan, all
performance criteria shall be deemed to have been met at the target level, and
time for payment shall be at the same time that awards would normally have been
made in 1998.

(c) As to the contingent cash awards made to certain management employees
of Company in 1995 (item XI.A.2 in section 5.1(h)(i) of the Company Disclosure
Letter) that were to be paid if certain targets were met over a three year
period as to Cumulative Operating Earnings Per Share (and if certain stock
options were exercised), the target level in the program shall be deemed to have
been met as of the Effective Time. Payments shall be made to the individuals
covered by these awards based on the target level, irrespective of the exercise
or cash out of the related stock options, and payments shall be made on the
Effective Time.

(d) Immediately prior to the Effective Time, all restricted stock of the
Company (awarded under the Restated And Amended 1992 Stock Incentive Plan, and
any predecessor plan) held by any individual that has not vested shall vest and
any other restrictions that may be applicable shall lapse.

6.13. Expenses. The Surviving Corporation shall pay all charges and
expenses, including those of the Exchange Agent, in connection with the
transactions contemplated in Article IV. Except as otherwise provided in Section
8.5(b), whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such expense, except that expenses incurred in connection with the filing fee
for the F-4 Registration Statement and printing and mailing the Prospectus/Proxy
Statement and the F-4 Registration Statement shall be shared equally by Parent
and the Company.

6.14. Indemnification; Directors' and Officers' Insurance. (a) From and
after the Effective Time, Parent agrees that it will indemnify and hold harmless
each present and former director and officer of the Company, or any of the
Company's Subsidiaries and each officer or employee of the Company or any of its
Subsidiaries that is serving or has served as a director or trustee of another
entity expressly at the Company's request or direction, determined as of the
Effective Time (the "Indemnified Parties"), against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, "Costs") incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters arising
out of such party's position as, or actions taken as, a director or officer of
the Company or any of its Subsidiaries or director or trustee of another entity
at the request or direction of the Company at or prior to the Effective Time,
whether asserted or claimed prior to, at or after the Effective Time, to the
fullest extent that the Company would have been permitted under Iowa law and its
articles of incorporation or by-laws in effect on the date hereof to indemnify
such Person (and Parent shall also advance expenses as incurred to the fullest
extent permitted under applicable law provided the Person to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such Person is not entitled to indemnification) as provided
below. Except as provided below, Parent shall not have any obligation hereunder
to any Indemnified Party when and if a court of competent jurisdiction shall
ultimately determine that the indemnification of such Indemnified Party in the
manner contemplated hereby is prohibited by applicable law and the Company's
articles of incorporation and by-laws in effect as of the date hereof, and such
determination shall have become final and nonappealable. Notwithstanding the
foregoing, from and after the Effective Time, Parent agrees that it will

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indemnify and hold harmless each present director and officer of the Company,
against any and all Costs incurred in connection with any and all claims,
actions, suits, proceedings or investigations, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters arising
out of or in connection with such party's position as, or actions taken as, a
director or officer of the Company in connection with the Merger or the
transactions contemplated hereunder, at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time (and also to
advance all expenses incurred in connection therewith), whether or not such
indemnification would be available pursuant to the Company's articles of
incorporation and by-laws. Nothing contained herein, however, shall require
Parent to indemnify any person if a court of competent jurisdiction shall have
determined that such person has committed fraud in connection herewith, and such
determination shall have become final and nonappealable.

(b) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 6.14, upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Parent thereof, but the
failure to so notify shall not relieve Parent of any liability it may have to
such Indemnified Party if such failure does not materially prejudice the
indemnifying party. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) Parent
or the Surviving Corporation shall have the right to assume the defense thereof
and Parent shall not be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that if
Parent or the Surviving Corporation elects not to assume such defense or counsel
for the Indemnified Parties advises that there are issues which raise conflicts
of interest between Parent or the Surviving Corporation and the Indemnified
Parties, the Indemnified Parties may retain counsel satisfactory to them, and
Parent or the Surviving Corporation shall pay all reasonable fees and expenses
of such counsel for the Indemnified Parties promptly as statements therefor are
received; provided, however, that Parent shall be obligated pursuant to this
paragraph (b) to pay for only one firm of counsel for all Indemnified Parties in
any jurisdiction unless the use of one counsel for such Indemnified Parties
would present such counsel with a conflict of interest, (ii) the Indemnified
Parties will cooperate in the defense of any such matter and (iii) Parent shall
not be liable for any settlement effected without its prior written consent; and
provided, further, that Parent shall not have any obligation hereunder to any
Indemnified Party if and when a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law.

(c) The Surviving Corporation shall maintain a policy of officers' and
directors' liability insurance for acts and omissions occurring prior to the
Effective Time with coverage in amount and scope at least as favorable as the
Company's existing directors' and officers' liability insurance coverage ("D&O
Insurance") for a period of two years after the Effective Time so long as the
annual premium therefor is not in excess of 200% of the last annual premium paid
prior to the date hereof (the "Current Premium"); provided, however, if the
existing D&O Insurance expires, is terminated or canceled during such two year
period, the Surviving Corporation will use its best efforts to obtain comparable
D&O Insurance for the remainder of such period for a premium not in excess (on
an annualized basis) of 200% of the Current Premium.

(d) If the Surviving Corporation or any of its successors or assigns (i)
shall consolidate with or merge into any other corporation or entity and shall
not be the continuing or surviving corporation or entity of such consolidation
or merger or (ii) shall transfer all or substantially all of its properties and
assets to any individual, corporation or other entity, then, and in each such
case, proper provisions shall be made so that the successors and assigns of the
Surviving Corporation shall assume all of the obligations set forth in this
Section.

(e) The provisions of this Section are intended to be for the benefit of,
and shall be enforceable by, each of the Indemnified Parties, their heirs and
their representatives.

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6.15. Other Actions by the Company and Parent.

(a) Takeover Statute. If any Takeover Statute is or may become applicable
to the Merger or the other transactions contemplated by this Agreement, each of
Parent and the Company and its board of directors shall grant such approvals and
take such actions as are necessary so that such transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise act to eliminate or minimize the effects of such statute or regulation
on such transactions.

(b) Dividends. The Company shall coordinate with Parent the declaration,
setting of record dates and payment dates of dividends on Shares so that holders
of Shares do not receive dividends on both Shares and ADSs received in the
Merger in respect of any calendar quarter or fail to receive a dividend on
either Shares or ADSs received in the Merger in respect of any calendar quarter.

6.16. Directors. Effective as of the Effective Time all members of the
Company's board of directors will be invited by Parent to join the board of
directors of Parent's most directly held U.S. insurance holding company.

6.17. Benefit Plans. Except as otherwise provided in this Section
6.17(a), Parent agrees that, during the period commencing at the Effective Time
and ending on the second anniversary thereof, the employees (including
individuals under career agent contracts with the Company) ("Covered Employees")
of the Company and its Subsidiaries who as of the Effective Time become employed
by Parent or any of its Subsidiaries, will continue to be provided with benefits
under those of the Company Compensation and Benefit Plans so identified on
Section 5.1(h) of the Company Disclosure Letter to the extent such benefits are
currently provided. Notwithstanding the previous sentence, in the event that
Parent and its Subsidiaries shall integrate or consolidate the employee benefit
plans covering their employees located in the United States, Parent shall not be
required, during the two-year period commencing at the Effective Time, to
provide Covered Employees with benefits under the Company Compensation and
Benefit Plans; provided that Covered Employees are eligible to participate and
receive benefits under such integrated or consolidated benefit plans of Parent
and its Subsidiaries on substantially the same terms and conditions applicable
to similarly situated employees of Parent and its Subsidiaries. For purposes of
employee benefit plans, programs and arrangements maintained or contributed to
by Parent or any of its Subsidiaries, Parent shall, and shall cause its
Subsidiaries to, treat service of each Covered Employee with the Company and its
Subsidiaries (to the same extent such service is recognized under analogous
plans, programs and arrangements of the Company and its Subsidiaries) as service
rendered to Parent and its Subsidiaries, solely for the purposes of eligibility
to participate and vesting thereunder. Parent shall, and shall cause its
Subsidiaries to, cause any and all pre-existing condition limitations (to the
extent such limitations did not apply to a pre-existing condition under the
Compensation and Benefit Plans) under any group health plans of Parent or any of
its Subsidiaries to be waived with respect to (i) Covered Employees who,
immediately prior to the Effective Time, participate in any such group health
plan, and (ii) their eligible dependents, and to give credit for any out of
pocket expenses paid by Covered Employees toward maximums under co-insurance
arrangements and deductibles under the Company Compensation and Benefit Plans
which are group health plans.

6.18. Pension Plan Stock Election. The Company shall take all action
necessary to prevent the Equitable Life Insurance of Iowa Pension Plan from
acquiring Stock Consideration equal to 10% or more, determined as of the time of
election, of its plan assets.

6.19. Parent Annual Report. Parent shall furnish to its holders of ADRs
within six months after the end of each fiscal year an annual report (in
English) (including a balance sheet and statements of income, shareholders'
equity and cash flows of Parent and its consolidated subsidiaries certified by
independent public accountants and prepared in conformity with generally
accepted accounting principles in the Netherlands), together with a
reconciliation of net income and total shareholders' equity to U.S. generally
accepted accounting principles and, within four months after the end of each of
the first six months of each fiscal year of the Company (beginning with the
first such six-month period ending after the Effective Time), consolidated
summary financial information of Parent and its Subsidiaries for such

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six-month period in reasonable detail prepared in accordance with generally
accepted accounting principles in the Netherlands on a basis consistent with the
financial statements included in such annual report.

ARTICLE VII

CONDITIONS

7.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:

(a) Shareholder Approval. This Agreement shall have been duly
approved by holders of Shares constituting the Company Requisite Vote and
shall have been duly approved by the sole shareholder of Merger Sub in
accordance with applicable law and the articles of incorporation and
by-laws of each such corporation.

(b) NYSE Listing. The ADSs issuable to the Company shareholders
pursuant to this Agreement shall have been authorized for listing on the
NYSE upon official notice of issuance.

(c) Regulatory Consents. The waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated and, other than the filing provided for in Section 1.3, all
notices and filings required to be made prior to the Effective Time by the
Company or Parent or any of their respective Subsidiaries with, and all
consents, registrations, approvals, permits and authorizations required to
be obtained prior to the Effective Time by the Company or Parent or any of
their respective Subsidiaries from, any Governmental Entity (collectively,
"Governmental Consents") in connection with the execution and delivery of
this Agreement and the consummation of the Merger and the other
transactions contemplated hereby by the Company, Parent and Merger Sub
shall have been made or obtained (as the case may be), upon terms and
conditions that, and except those that the failure to make or to obtain,
are not, individually or in the aggregate, reasonably likely to have a
Company Material Adverse Effect or a Parent Material Adverse Effect or to
provide a basis to conclude that the parties hereto or any of their
affiliates or respective directors, officers, agents, advisors or other
representatives would be subject to the risk of criminal liability.

(d) Litigation. No court or Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any Law or Insurance Law (whether temporary, preliminary or permanent) that
is in effect and restrains, enjoins or otherwise prohibits consummation of
the Merger (collectively, an "Order"), and no Governmental Entity or any
other Person shall have instituted any proceeding or threatened to
institute any proceeding seeking any such Order.

(e) F-4. The F-4 Registration Statement shall have become effective
under the Securities Act. No stop order suspending the effectiveness of the
F-4 Registration Statement shall have been issued, and no proceedings for
that purpose shall have been initiated or be threatened, by the SEC.

(f) Blue Sky Approvals. Parent shall have received all state
securities and "blue sky" permits and approvals necessary to consummate the
transactions contemplated hereby.

7.2. Conditions to Obligations of Parent and Merger Sub. The obligations
of Parent and Merger Sub to effect the Merger are also subject to satisfaction
by the Company or waiver by Parent at or prior to the Effective Time of the
following conditions:

(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are qualified by
reference to a Company Material Adverse Effect shall be true and correct,
and those that are not so qualified shall be true and correct, except for
failures to be true and correct as would not, individually or in the
aggregate, be reasonably likely to have a Company Material Adverse Effect,
as of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date (except to the extent any such representation
or

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warranty expressly speaks as of an earlier date), and Parent shall have
received a certificate signed on behalf of the Company by an executive
officer of the Company to such effect.

(b) Performance by the Company. The Company shall not have knowingly
and wilfully breached, or with respect to any breach which is not knowing
and wilful shall not have breached in any respect, any agreement,
obligation or covenant contained in this Agreement that is required to be
performed or complied with by it on or prior to the Closing Date which
latter breach would not, individually or in the aggregate, be reasonably
likely to have a Company Material Adverse Effect, and Parent shall have
received a certificate signed on behalf of the Company by an executive
officer of the Company to such effect.

(c) Consents Under Agreements. The Company shall have obtained the
consent or approval of each Person whose consent or approval shall be
required under any Contract to which the Company or any of its Subsidiaries
is a party, except those for which the failure to obtain such consent or
approval, individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect or is not reasonably likely to
prevent or to materially burden or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement.
Notwithstanding the foregoing, the Company shall have obtained all
Investment Company Approvals.

(d) Tax Opinion. Parent shall have received the opinion of Sullivan &
Cromwell, counsel to Parent, dated the Closing Date, to the effect that the
Merger will be treated for Federal income tax purposes as a reorganization
within the meaning of section 368(a) of the Code, and that each of Parent,
Merger Sub and the Company will be a party to that reorganization within
the meaning of section 368(b) of the Code.

(e) Affiliates Letters. Parent shall have received an Affiliates
Letter from each Person identified as an affiliate of the Company pursuant
to Section 6.9.

(f) Accountant's Letter. Parent shall have received, in form and
substance reasonably satisfactory to Parent, from the Company's
accountants, the "comfort" letter described in Section 6.6(b).

(g) Rights Agreement. The Rights Agreement shall have been amended to
terminate immediately prior to the Effective Time.

(h) Average Closing Price. The Average Closing Price shall be no
higher than $54.5052; provided, however, that this condition shall be
deemed satisfied if the Company should offer to amend Section 4.1(a) so
that "Stock Consideration" will be defined such that each Share that is the
subject of a Stock Election will be converted into, exchangeable for and
represent the right to receive a number of ADSs having the same aggregate
value (based on the Average Closing Price) as the number of ADSs into which
such Share would have been converted if the Average Closing Price had been
equal to $54.5052.

7.3. Conditions to Obligation of the Company. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company at or prior to the Effective Time of the following conditions:

(a) Representations and Warranties. The representations and
warranties of Parent and Merger Sub set forth in this Agreement that are
qualified by reference to a Parent Material Adverse Effect shall be true
and correct, and those that are not so qualified shall be true and correct,
except for failures to be true and correct as would not, individually or in
the aggregate, be reasonably likely to have a Parent Material Adverse
Effect, as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, (except to the extent any such
representation and warranty expressly speaks as of an earlier date) and the
Company shall have received a certificate signed on behalf of Parent by an
executive officer of Parent and on behalf of Merger Sub by an executive
officer of Merger Sub to such effect.

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(b) Performance of Obligations of Parent and Merger Sub. Neither
Parent nor Merger Sub shall have knowingly and wilfully breached, or with
respect to any breach which is not knowing or wilful shall have breached in
any respect, any agreement, obligation or covenant contained in this
Agreement that is required to be performed or complied with by it on or
prior to the Closing Date which latter breach would not, individually or in
the aggregate, be reasonably likely to have a Parent Material Adverse
Effect, and the Company shall have received a certificate signed on behalf
of Parent by an executive officer of Parent and on behalf of Merger Sub by
an executive officer of Merger Sub to such effect.

(c) Consents Under Agreements. Parent shall have obtained the consent
or approval of each Person whose consent or approval shall be required in
order to consummate the transactions contemplated by this Agreement under
any material Contract to which Parent or any of its Subsidiaries is a
party, except those for which failure to obtain such consents and
approvals, individually or in the aggregate, is not reasonably likely to
have a Parent Material Adverse Effect or is not reasonably likely to
prevent or to materially burden or materially impair the ability of Parent
to consummate the transactions contemplated by this Agreement.

(d) Tax Opinion. The Company shall have received the opinion of
Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, P.C.,
counsel to the Company, dated the Closing Date, to the effect that the
Merger will be treated for Federal income tax purposes as a reorganization
within the meaning of section 368(a) of the Code, and that each of Parent,
Merger Sub and the Company will be a party to that reorganization within
the meaning of section 368(b) of the Code, that the Merger will not be a
taxable event with respect to the Company and that the receipt of the Stock
Consideration will be tax-free to the recipients. The form of such opinion
is set forth hereto as Exhibit C.

(e) Legal Opinion. The Company shall have received an opinion of
Sullivan & Cromwell, U.S. counsel to Parent with respect to matters of New
York law, and Dutch counsel to Parent with respect to matters of the law of
the Netherlands, dated the Closing Date, substantially in the forms
attached as Exhibits D-1 and D-2, respectively.

(f) Accountant's Letter. The Company shall have received from
Parent's accountants, the "comfort" letter described in Section 6.6(b).

(g) Average Closing Price. The Average Closing Price shall be at
least $40.2864; provided, however, that this condition shall be deemed
satisfied if Parent should offer to amend Section 4.1(a) so that "Stock
Consideration" will be defined such that each Share that is the subject of
a Stock Election will be converted into, exchangeable for and represent the
right to receive a number of ADSs having the same aggregate value (based on
the Average Closing Price) as the number of ADSs into which such Share
would have been converted if the Average Closing Price had been equal to
$40.2864.

ARTICLE VIII

TERMINATION

8.1. Termination by Mutual Consent. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by shareholders of the Company and Parent referred
to in Section 7.1(a), by mutual written consent of the Company and Parent by
action of their respective boards of directors.

8.2. Termination by Either Parent or the Company. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the board of directors of either Parent or the Company if (i)
the Merger shall not have been consummated by March 31, 1998, whether such date
is before or after the date of approval by the shareholders of the Company (the
"Termination Date"), (ii) the approval of the Company's shareholders required by
Section 7.1(a) shall

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not have been obtained at a meeting duly convened therefor or at any adjournment
or postponement thereof or (iii) any Order permanently restraining, enjoining or
otherwise prohibiting consummation of the Merger shall become final and
non-appealable (whether before or after the approval by the shareholders of the
Company); provided, that the right to terminate this Agreement pursuant to
clause (i) above shall not be available to any party that has breached in any
material respect its obligations under this Agreement in any manner that shall
have proximately contributed to the occurrence of the failure of the Merger to
be consummated.

8.3. Termination by the Company. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after the approval by shareholders of the Company referred to in Section
7.1(a), by action of the board of directors of the Company:

(a) if (i) the Company is not in wilful breach of Section 6.3 of this
Agreement and (ii) the Company, subject to complying with the terms of this
Agreement, enters into a binding written agreement concerning a transaction
that constitutes a Superior Proposal;

(b) if there has been a breach by Parent or Merger Sub of any
representation, warranty, covenant or agreement contained in this Agreement
that is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by the Company to the party
committing such breach except for such breaches as would not, individually
or in the aggregate, be reasonably likely to have a Parent Material Adverse
Effect; or

(c) if the Average Closing Price is below $40.2864; provided, however,
that the Company may not effect such termination if Parent should offer to
amend Section 4.1(a) so that "Stock Consideration" will be defined so that
each Share that is the subject of a Stock Election will be converted into,
exchangeable for and represent the right to receive a number of ADSs having
the same aggregate value (based on the Average Closing Price) as the number
of ADSs into which such Share would have been converted if the Average
Closing Price had been equal to $40.2864.

8.4. Termination by Parent. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by action of the
board of directors of Parent:

(a) if (i) the Company enters into a binding agreement for a Superior
Proposal or the board of directors of the Company shall have withdrawn or
adversely modified its approval or recommendation to the Company's
shareholders of this Agreement or failed to reconfirm its recommendation to
the Company's shareholders of this Agreement within five business days
after a written request by Parent to do so or (ii) there has been a breach
by the Company of any representation, warranty, covenant or agreement
contained in this Agreement that is not curable or, if curable, is not
cured within 30 days after written notice of such breach is given by Parent
to the Company except for such breaches as would not, individually or in
the aggregate, be reasonably likely to have a Company Material Adverse
Effect; or

(b) if the Average Closing Price is above $54.5052; provided, however,
that Parent may not effect such termination if the Company should offer to
amend Section 4.1(a) so that "Stock Consideration" will be defined so that
each Share that is the subject of a Stock Election will be converted into,
exchangeable for and represent the right to receive a number of ADSs having
the same aggregate value (based on the Average Closing Price) as the number
of ADSs into which such Share would have been converted if the Average
Closing Price had been equal to $54.5052.

8.5. Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article VIII, this Agreement (other than as set forth in Section 9.1) shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its officers, directors or other Representatives); provided,
however, no such termination shall relieve any party hereto of any liability or
damages resulting from any breach of this Agreement.

(b) In the event that (i) a bona fide Acquisition Proposal shall have been
made to the Company or to any of its Subsidiaries or to its shareholders
generally or any Person shall have publicly announced an

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intention (whether or not conditional) to make a bona fide Acquisition Proposal
to the Company or to any of its Subsidiaries or to its shareholders generally
and thereafter this Agreement is terminated by either Parent or the Company
pursuant to Section 8.2(ii), or (ii) this Agreement is terminated (x) by the
Company pursuant to Section 8.3(a) or (y) by Parent pursuant to Section 8.4(a),
then if terminated by the Company, the Company shall prior to such termination
or if terminated by Parent, within two business days after such termination pay
Parent in immediately available funds a fee of $65,000,000 payable by wire
transfer of same day funds. The Company acknowledges that the agreements
contained in this Section 8.5(b) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent and
Merger Sub would not enter into this Agreement; accordingly, if the Company
fails to promptly pay the amount due pursuant to this Section 8.5(b), and, in
order to obtain such payment, Parent or Merger Sub commences a suit which
results in a judgment against the Company for the fee, charges or expenses
referred to in this paragraph (b), the Company shall pay to Parent or Merger Sub
its costs and expenses (including attorneys' fees) in connection with such suit,
together with interest on the amount of such fee, charges or expenses at the
base rate of Citibank, N.A. in effect on the date such payment was required to
be made.

ARTICLE IX

MISCELLANEOUS AND GENERAL

9.1. Survival. This Article IX, the agreements of the Company, Parent and
Merger Sub contained in Sections 6.7 (Taxation), 6.9 (Affiliates), 6.10 (Stock
Exchange Listing and De-listing), 6.12 (Stock Options; Performance Awards; Cash
Awards and Restricted Stock), 6.13 (Expenses), 6.14 (Indemnification; Directors'
and Officers' Insurance), 6.16 (Directors), 6.17 (Benefit Plans) and 6.19
(Parent Annual Report) shall survive the consummation of the Merger. This
Article IX, the agreements of the Company, Parent and Merger Sub contained in
Section 6.13 (Expenses), Section 8.5 (Effect of Termination and Abandonment) and
the Confidentiality Agreements shall survive the termination of this Agreement.
All other representations, warranties, covenants and agreements in this
Agreement shall not survive the consummation of the Merger or the termination of
this Agreement.

9.2. Modification or Amendment. Subject to the provisions of the
applicable law, at any time prior to the Effective Time, the parties hereto may
modify or amend this Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties.

9.3. Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law.

9.4. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.

9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. (a) EXCEPT TO THE
EXTENT THE BCA IS APPLICABLE TO THE MERGER, THIS AGREEMENT SHALL BE DEEMED TO BE
MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND
IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF. The parties hereby irrevocably submit to the
jurisdiction of the courts of the State of Delaware and the Federal courts of
the United States of America located in the State of Delaware solely in respect
of the interpretation and enforcement of the provisions of this Agreement and of
the documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties hereto
irrevocably agree that all claims with respect to such action or proceeding
shall be

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heard and determined in such a Delaware State or Federal court. The parties
hereby consent to and grant any such court jurisdiction over the Person of such
parties and over the subject matter of such dispute and agree that mailing of
process or other papers in connection with any such action or proceeding in the
manner provided in Section 9.6 or in such other manner as may be permitted by
law shall be valid and sufficient service thereof.

(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO OFFICER, DIRECTOR OR REPRESENTATIVE, OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.5.

9.6. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile:

if to Parent:

Strawinskylaan 2631, 1077 ZZ Amsterdam,
P.O. Box 810,
1000 Av. Amsterdam, the Netherlands
Attention: Jan Holsboer
Fax: 31-20-541-5496

(with a copy to Henk Kooiker
Fax: 31-20-541-8723

and to Benjamin F. Stapleton, Esq.,
Sullivan & Cromwell,
125 Broad Street, New York, NY 10004
Fax: (212) 558-3588)

if to Merger Sub:

c/o ING FSI N.A.
5780 Powers Ferry Road,
Atlanta, Georgia 30327.
Attention: Michael Cunningham
Fax: (770) 980-3303

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if to the Company:

604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306
Attention: Fred S. Hubbell
Fax: (515) 245-6973

(with a copy to G.R. Neumann, Esq.,
Nymaster, Goode, McLaughlin, Voigts, West,
Hansell & O'Brien, P.C.
1900 Hub Tower
Des Moines, Iowa 50309
Fax: (515) 283-3108)

or to such other Persons or addresses as may be designated in writing by the
party to receive such notice as provided above.

9.7. Entire Agreement; No Other Representations. This Agreement
(including any exhibits hereto), the Company Disclosure Letter, the
Confidentiality Agreements, dated May 30, 1997 and June 30, 1997, between Parent
and the Company (the "Confidentiality Agreements") constitute the entire
agreement, and supersede all other prior agreements, understandings,
representations and warranties both written and oral, among the parties, with
respect to the subject matter hereof. Notwithstanding the foregoing, the
prohibition on acquiring Shares pursuant to the May 30, 1997 Confidentiality
Agreement shall not be applicable until any termination of this Agreement. EACH
PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB NOR THE COMPANY MAKES
ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS
OR REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR
DISCLOSURE TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION OR
OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.

9.8. No Third Party Beneficiaries. Except as provided in Sections 6.9
(Affiliates), 6.12 (Stock Options; Performance Awards; Cash Awards and
Restricted Stock), 6.14 (Indemnification; Directors' and Officers' Insurance),
6.17 (Benefit Plans) and 6.19 (Parent Annual Report), this Agreement is not
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder (provided that no employees shall have any rights to enforce
any provisions of Section 6.17 unless at least 50 employees shall join in such
action with respect to a specific benefit in a specific plan).

9.9. Obligations of Parent and of the Company. Whenever this Agreement
requires a Subsidiary of Parent to take any action, such requirement shall be
deemed to include an undertaking on the part of Parent to cause such Subsidiary
to take such action. Whenever this Agreement requires a Subsidiary of the
Company to take any action, such requirement shall be deemed to include an
undertaking on the part of the Company to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.

9.10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or

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unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

9.11. Interpretation. The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".

9.12. Assignment. This Agreement shall not be assignable by operation of
law or otherwise; provided, however, that Parent may designate, by written
notice to the Company, another wholly-owned direct or, subject to Section 6.7,
indirect United States domestic Subsidiary to be a Constituent Corporation in
lieu of Merger Sub, in which event all references herein to Merger Sub shall be
deemed references to such other Subsidiary, except that all representations and
warranties made herein with respect to Merger Sub as of the date of this
Agreement shall be deemed representations and warranties made with respect to
such other Subsidiary as of the date of such designation.

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.

Equitable of Iowa Companies

By: /s/ FRED S. HUBBELL
------------------------------------
Name: Fred S.Hubbell
Title: Chairman of the Board,
President and Chief
Executive Officer

ING Groep N.V.

By: /s/ JAN HOLSBOER
------------------------------------
Name: Holsboer, J.H.
Title: Authorized Representative

PFHI Holdings, Inc.

By: /s/ MICHAEL CUNNINGHAM
------------------------------------
Name: Michael Cunningham
Title: President

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ANNEX B

July 7, 1997

The Board of Directors
Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309

Attention: Fred S. Hubbell
Chairman, President and Chief Executive Officer

Ladies and Gentlemen:

You have requested our opinion as to the fairness, from a financial point
of view, to the stockholders of Equitable of Iowa Companies (the "Company") of
the consideration proposed to be paid to them in connection with the proposed
merger (the "Merger") of the Company with ING Groep N.V. (the "Buyer"). Pursuant
to the July 7, 1997 draft of the Agreement and Plan of Merger (the "Agreement")
among the Company, the Buyer and PFHI Holdings, Inc. (the "Merger Subsidiary"),
the Company will become a wholly-owned subsidiary of the Buyer and stockholders
of the Company will receive for each share of Common Stock, no par value, of the
Company held by them consideration equal to an amount calculated pursuant to a
formula contained in the draft Agreement.

In arriving at our opinion, we have reviewed: (i) the draft Agreement; (ii)
certain publicly available information concerning the business of the Company
and of certain other companies engaged in businesses comparable to those of the
Company, and the reported market prices for certain other companies' securities
deemed comparable; (iii) publicly available terms of certain transactions
involving companies comparable to the Company and the consideration received for
such companies; (iv) current and historical market prices of the common stock of
the Company and the Buyer; (v) the audited financial statements of the Company
and the Buyer for the fiscal year ended December 31, 1996, and the unaudited
financial statements of the Company and the Buyer for the period ended March 31,
1997; (vi) certain internal financial analyses and forecasts prepared by the
Company and its management; (vii) the terms of other business combinations that
we deemed relevant; and (viii) a preliminary actuarial appraisal of the
Company's life insurance subsidiaries as of September 30, 1996 prepared on July
6, 1997 by Tillinghast-Towers Perrin.

In addition, we have held discussions with certain members of the
management of the Company and the Buyer with respect to certain aspects of the
Merger, and the past and current business operations of the Company and the
Buyer, the financial condition and future prospects and operations of the
Company and the Buyer, the effects of the Merger on the financial condition and
future prospects of the Company and the Buyer, and certain other matters we
believed necessary or appropriate to our inquiry. We have visited certain
representative facilities of the Company, and reviewed such other financial
studies and analyses and considered such other information as we deemed
appropriate for the purposes of this opinion.

In giving our opinion, we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was publicly
available or was furnished to us by the Company or otherwise reviewed by us, and
we have not assumed any responsibility or liability therefor. We have not
conducted any valuation or appraisal of any assets or liabilities, nor have any
such valuations or appraisals been provided to us, other than the one mentioned
in clause (viii) above. In relying on financial analyses and forecasts provided
to us, we have assumed that they have been reasonably prepared based on
assumptions reflecting the best currently available estimates and judgments by
management as to the expected future results of operations and financial
condition of the Company to which such analyses or forecasts relate. We have
also assumed that the Merger will have the tax consequences described in
discussions with, and materials furnished to us by, representatives of the
Company, and that the other transactions contemplated by the draft Agreement
will be consummated as

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described in the draft Agreement. We have relied as to all legal matters
relevant to rendering our opinion upon the advice of counsel.

Our opinion is necessarily based on economic, market and other conditions
as in effect on, and the information made available to us as of, the date
hereof. It should be understood that subsequent developments may affect this
opinion (including, without limitation, any amendments or modifications to the
draft Agreement after the date hereof) and that we do not have any obligation to
update, revise, or reaffirm this opinion. We are expressing no opinion herein as
to the price at which the Company's or the Buyer's stock will trade at any
future time. We were not authorized to and did not solicit any expressions of
interest from any other parties with respect to the sale of all or any part of
the Company or any other alternative transaction.

We have acted as financial advisor to the Company with respect to the
proposed Merger and will receive a fee from the Company for our services. We
will also receive an additional fee if the proposed Merger is consummated.
Please be advised that we and our affiliates have engaged in and maintain
customary financial advisory, capital markets, banking, trading, and other
business relationships with the Company and the Buyer. In the ordinary course of
their businesses, our affiliates may actively trade the debt and equity
securities of the Company or the Buyer for their own account or for the accounts
of customers and, accordingly, they may at any time hold long or short positions
in such securities.

On the basis of and subject to the foregoing, it is our opinion as of the
date hereof that the consideration to be paid to the Company's stockholders in
the proposed Merger is fair, from a financial point of view, to such
stockholders.

This letter is provided to the Board of Directors of the Company in
connection with and for the purposes of its evaluation of the Merger. This
opinion does not constitute a recommendation to any stockholder of the Company
as to how such stockholder should vote with respect to the Merger. This opinion
may not be disclosed, referred to, or communicated (in whole or in part) to any
third party for any purpose whatsoever except with our prior written consent in
each instance. This opinion may be reproduced in full in any proxy or
information statement mailed to stockholders of the Company but may not
otherwise be disclosed publicly in any manner without our prior written approval
and must be treated as confidential.

Very truly yours,

J.P. MORGAN SECURITIES INC.

By: /s/ EDWARD J. KELLY III

----------------------------------

Name: Edward J. Kelly III

Title: Managing Director

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ANNEX C

DISSENTERS RIGHTS PROVISIONS UNDER THE
IOWA BUSINESS CORPORATION ACT

Set forth below is the text of the statutory dissenters' rights provisions
under Division XIII of the Iowa Business Corporation Act.

DIVISION XIII
DISSENTERS' RIGHTS
PART A

490.1301 DEFINITIONS FOR DIVISION XIII.-In this division:

1. "Beneficial shareholder" means the person who is a beneficial owner of
shares held by a nominee as the record shareholder.

2. "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer.

3. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under section 490.1302 and who exercises that right when and in
the manner required by sections 490.1320 through 490.1328.

4. "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to which
the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable.

5. "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.

6. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares to
the extent of the rights granted by a nominee certificate on file with a
corporation.

7. "Shareholder" means the record shareholder or the beneficial
shareholder.

490.1302 SHAREHOLDERS' RIGHT TO DISSENT.-1. A shareholder is entitled to
dissent from, and obtain payment of the fair value of the shareholder's shares
in the event of, any of the following corporate actions:

a. Consummation of a plan of merger to which the corporation is a
party if either of the following apply:

(1) Shareholder approval is required for the merger by section
490.1103 or the articles of incorporation and the shareholder is
entitled to vote on the merger.

(2) The corporation is a subsidiary that is merged with its parent
under section 490.1104.

b. Consummation of a plan of share exchange to which the corporation
is a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan.

c. Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or
exchange, including a sale in dissolution, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one year after the date of sale.

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d. An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it does
any or all of the following:

(1) Alters or abolishes a preferential right of the shares.

(2) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares.

(3) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities.

(4) Excludes or limits the right of the shares to vote on any
matter, or to cumulate votes, other than a limitation by dilution
through issuance of shares or other securities with similar voting
rights.

(5) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be acquired
for cash under section 490.604.

(6) Extends, for the first time after being governed by this
chapter, the period of duration of a corporation organized under chapter
491 or 496A and existing for a period of years on the day preceding the
date the corporation is first governed by this chapter.

e. Any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.

2. A shareholder entitled to dissent and obtain payment for the
shareholder's shares under this chapter is not entitled to challenge the
corporate action creating the shareholder's entitlement unless the action is
unlawful or fraudulent with respect to the shareholder or the corporation.

490.1303 DISSENT BY NOMINEES AND BENEFICIAL OWNERS.-1. A record
shareholder may assert dissenters' rights as to fewer than all the shares
registered in that shareholder's name only if the shareholder dissents with
respect to all shares beneficially owned by any one person and notifies the
corporation in writing of the name and address of each person on whose behalf
the shareholder asserts dissenters' rights. The rights of a partial dissenter
under this subsection are determined as if the shares as to which the
shareholder dissents and the shareholder's other shares were registered in the
names of different shareholders.

2. A beneficial shareholder may assert dissenters' rights as to shares held
on the shareholder's behalf only if the shareholder does both of the following:

a. Submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights.

b. Does so with respect to all shares of which the shareholder is the
beneficial shareholder or over which that beneficial shareholder has power
to direct the vote.

PART B

490.1320 NOTICE OF DISSENTERS' RIGHTS.-1. If proposed corporate action
creating dissenters' rights under section 490.1302 is submitted to a vote at a
shareholders' meeting, the meeting notice must state that shareholders are or
may be entitled to assort dissenters' rights under this part and be accompanied
by a copy of this part.

2. If corporate action creating dissenters' rights under section 490.1302
is taken without a vote of shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in section 490.1322.

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490.1321 NOTICE OF INTENT TO DEMAND PAYMENT.-1. If proposed corporate
action creating dissenters' rights under section 490.1302 is submitted to a vote
at a shareholders' meeting, a shareholder who wishes to assert dissenters'
rights must do all of the following:

a. Deliver to the corporation before the vote is taken written notice
of the shareholder's intent to demand payment for the shareholder's shares
if the proposed action is effectuated.

b. Not vote the Dissenting Shareholder's shares in favor of the
proposed action.

2. A shareholder who does not satisfy the requirements of subsection 1, is
not entitled to payment for the shareholder's shares under this part.

490-1322 DISSENTERS' NOTICE.-1. If proposed corporate action creating
dissenters' rights under section 490.1302 is authorized at a shareholders'
meeting, the corporation shall deliver a written dissenters' notice to all
shareholders who satisfied the requirements of section 490.1321.

2. The dissenters' notice must be sent no later than ten days after the
proposed corporate action is authorized at a shareholders' meeting, or, if the
corporate action is taken without a vote of the shareholders, no later than ten
days after the corporate action is taken, and must do all of the following:

a. State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited.

b. Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received.

c. Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not the person acquired beneficial
ownership of the shares before that date.

d. Set a date by which the corporation must receive the payment
demand, which date shall not be fewer than thirty nor more than sixty days
after the date the dissenters' notice is delivered.

e. Be accompanied by a copy of this division.

490.1323 DUTY TO DEMAND PAYMENT.-1. A shareholder sent a dissenter's
notice described in section 490.1322 must demand payment, certify whether the
shareholder acquired beneficial ownership of the shares before the date required
to be set forth in the dissenter's notice pursuant to section 490.1322,
subsection 2, paragraph "c", and deposit the shareholder's certificates in
accordance with the terms of the notice.

2. The shareholder who demands payment and deposits the shareholder's
shares under subsection 1 retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.

3. A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
division.

490.1324 SHARE RESTRICTIONS.-1. The corporation may restrict the transfer
of uncertificated shares from the date the demand for their payment is received
until the proposed corporate action is taken or the restrictions released under
section 490.1326.

2. The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are canceled
or modified by the taking of the proposed corporate action.

490.1325 PAYMENT.-1. Except as provided in section 490.1327, at the time
the proposed corporate action is taken, or upon receipt of a payment demand,
whichever occurs later, the corporation

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shall pay each dissenter who complied with section 490.1323 the amount the
corporation estimates to be the fair value of the dissenter's shares, plus
accrued interest.

2. The payment must be accompanied by all of the following:

a. The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any.

b. A statement of the corporation's estimate of the fair value of the
shares.

c. An explanation of how the interest was calculated.

d. A statement of the dissenter's right to demand payment under
section 490.1328.

e. A copy of this division.

490.1326 FAILURE TO TAKE ACTION.-1. If the corporation does not take the
proposed action within sixty days after the date set for demanding payment and
depositing share certificates, the corporation shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.

2. If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 490.1322 as if the corporate action was taken
without a vote of the shareholders and repeat the payment demand procedure.

490.1327 AFTER-ACQUIRED SHARES.-1. A corporation may elect to withhold
payment required by section 490.1325 from a dissenter unless the dissenter was
the beneficial owner of the shares before the date set forth in the dissenters'
notice as the date of the first announcement to news media or to shareholders of
the terms of the proposed corporate action.

2. To the extent the corporation elects to withhold payment under
subsection 1, after taking the proposed corporate action, it shall estimate the
fair value of the shares, plus accrued interest, and shall pay this amount to
each dissenter who agrees to accept it in full satisfaction of the dissenter's
demand. The corporation shall send with its offer a statement of its estimate of
the fair value of the shares, an explanation of how the interest was calculated,
and a statement of the dissenter's right to demand payment under section
490.1328.

490.1328 PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.-1. A
dissenter may notify the corporation in writing of the dissenter's own estimate
of the fair value of the dissenter's shares and amount of interest due, and
demand payment of the dissenter's estimate, less any payment under section
490.1325, or reject the corporation's offer under section 490.1327 and demand
payment of the fair value of the dissenter's shares and interest due, if any of
the following apply:

a. The dissenter believes that the amount paid under section 490.1325
or offered under section 490.1327 is less than the fair value of the
dissenter's shares or that the interest due is incorrectly calculated.

b. The corporation fails to make payment under section 490.1325 within
sixty days after the date set for demanding payment.

c. The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty days after the date set for
demanding payment.

2. A dissenter waives the dissenter's right to demand payment under this
section unless the dissenter notifies the corporation of the dissenter's demand
in writing under subsection 1 within thirty days after the corporation made or
offered payment for the dissenter's shares.

C-4
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PART C

490.1330 COURT ACTION.-1. If a demand for payment under section 490.1328
remains unsettled, the corporation shall commence a proceeding within sixty days
after receiving the payment demand and petition the court to determine the fair
value of the shares and accrued interest. If the corporation does not commence
the proceeding within the sixty-day period, it shall pay each dissenter whose
demand remains unsettled the amount demanded.

2. The corporation shall commence the proceeding in the district court of
the county where a corporation's principal office or, if none in this state, its
registered office is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
is merged with or whose shares were acquired by the foreign corporation was
located.

3. The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.

4. The jurisdiction of the court in which the proceeding is commenced under
subsection 2 is plenary and exclusive. The court may appoint one or more persons
as appraisers to receive evidence and recommend decision on the question of fair
value. The appraisers have the powers described in the order appointing them, or
in any amendment to it. The dissenters are entitled to the same discovery rights
as parties in other civil proceedings.

5. Each dissenter made a party to the proceeding is entitled to judgment
for either of the following:

a. The amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the
corporation.

b. The fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold payment
under section 490.1327.

490.1331 COURT COSTS AND COUNSEL FEES.-1. The court in an appraisal
proceeding commenced under section 490.1330 shall determine all costs of the
proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation, except that the court may assess costs against all or some of the
dissenters, in amounts the court finds equitable, to the extent the court finds
the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under section 490.1328.

2. The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable, for either of
the following:

a. Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of sections 490.1320 through 490.1328.

b. Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good faith
with respect to the rights provided by this chapter.

3. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded the
dissenters who were benefited.

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INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

Report of Moret Ernst & Young Accountants............................................. F-2
Consolidated balance sheet as at December 31.......................................... F-3
Consolidated profit and loss account.................................................. F-4
Consolidated statement of cash flows.................................................. F-5
Investment result from investments in shares and property............................. F-6
Notes to the consolidated financial statements........................................ F-7
1. Accounting principles for the consolidated balance sheet and profit and loss
account............................................................................. F-7
2. Notes to the consolidated balance sheet.......................................... F-14
3. Notes to the consolidated profit and loss account................................ F-30
4. Results from the insurance operations............................................ F-35
5. Results from the banking operations.............................................. F-45
6. Parent company information....................................................... F-48
7. Differences between Dutch and U.S. accounting principles......................... F-58
8. Additional information required by U.S. GAAP..................................... F-71
List of principal Group companies..................................................... F-103
Report of KPMG Accountants N.V........................................................ F-106
Schedules............................................................................. F-107
Consolidated balance sheet as at June 30, 1997 (unaudited)............................ F-111
Consolidated profit and loss account for the six months ended June 30, 1997 and 1996
(unaudited)......................................................................... F-112
Notes to the consolidated profit and loss account for the six months ended June 30,
1997 and 1996 (unaudited)........................................................... F-113

F-1
312

REPORT OF INDEPENDENT AUDITORS

The Supervisory Board and the Executive Board
ING Groep N.V.

We have audited the accompanying consolidated balance sheets of ING Groep
N.V. and subsidiaries (the "ING Group") as of December 31, 1996 and 1995, and
the related consolidated profit and loss accounts and consolidated statements of
cash flows for each of the three years in the period ended December 31, 1996.
Our audits also included the financial statement schedules listed in the Index
at Item 16(b) of the registration statement of which this Prospectus forms a
part. These financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits. We did not audit the
consolidated financial statements of ING Bank N.V., a wholly owned subsidiary,
which statements reflect shareholder's equity constituting 37% in 1996 and 43%
in 1995 and net profit constituting 42% in 1996, 41% in 1995 and 40% in 1994 of
the related consolidated totals. Those statements were audited by other auditors
whose report has been furnished to us, and our opinion, insofar as it relates to
data included for ING Bank N.V., is based solely on the report of the other
auditors.

We conducted our audits in accordance with auditing standards generally
accepted in the Netherlands which are substantially equivalent to auditing
standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits and the report of the other auditors provide a reasonable basis for our
opinion.

In our opinion, based on our audits and the report of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of the ING Group as of
December 31, 1996 and 1995, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended December 31,
1996, in conformity with accounting principles generally accepted in the
Netherlands. Also, in our opinion, the related financial statement schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.

Accounting principles generally accepted in the Netherlands vary in certain
significant respects from accounting principles generally accepted in the United
States of America. Application of accounting principles generally accepted in
the United States of America would have affected shareholders' equity as of
December 31, 1996 and 1995 and the results of operations for each of the years
then ended to the extent summarised in Note 7 of the Notes to the Consolidated
Financial Statements.

Amsterdam, the Netherlands
April 3, 1997

/s/ Moret Ernst & Young Accountants

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313

CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31
AMOUNTS IN MILLIONS OF GUILDERS
AFTER PROFIT APPROPRIATION

ASSETS

1996 1995
-------- --------

Tangible fixed assets(2.1)........................................... 1,800 1,537
Participating interests(2.2)......................................... 3,609 3,032
Investments(2.3)..................................................... 188,469 153,758
Lending(2.4)......................................................... 201,848 166,466
Banks(2.5)........................................................... 37,353 34,531
Cash(2.6)............................................................ 3,078 2,387
Other assets(2.7).................................................... 35,666 24,289
Accrued assets(2.8).................................................. 12,075 10,264
-------- --------
TOTAL...................................................... 483,898 396,264
======== ========

LIABILITIES

Shareholders' equity(2.9)............................................ 34,124 23,777
Third-party interests................................................ 470 140
-------- --------
GROUP EQUITY......................................................... 34,594 23,917
Subordinated loan(2.10).............................................. 1,068 1,068
-------- --------
GROUP CAPITAL BASE................................................... 35,662 24,985
General provisions(2.11)............................................. 3,571 3,364
Insurance provisions(2.12)........................................... 121,406 106,773
Funds entrusted to and debt securities of the banking
operations(2.13)................................................... 204,885 176,417
Banks(2.14).......................................................... 72,403 51,996
Other liabilities(2.15).............................................. 32,036 23,672
Accrued liabilities(2.16)............................................ 13,935 9,057
-------- --------
TOTAL...................................................... 483,898 396,264
======== ========

See accompanying Notes

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314

CONSOLIDATED PROFIT AND LOSS ACCOUNT
AMOUNTS IN MILLIONS OF GUILDERS

1996 1995 1994
------- ------- -------

Premium income............................................. 24,322 21,511 20,377
Income from investments of the insurance operations........ 10,932 9,467 8,065
Interest result from banking operations.................... 7,360 6,362 6,382
Commission................................................. 2,895 2,175 1,539
Other income............................................... 2,042 1,688 685
------- ------- -------
TOTAL INCOME(3.1).......................................... 47,551 41,203 37,048
Underwriting expenditure................................... 26,890 23,394 21,454
Other interest charges..................................... 902 989 933
Salaries and charges for pensions and social security...... 6,353 5,372 4,525
Value adjustments to receivables of the banking
operations(3.2.4)........................................ 1,130 1,090 1,035
Other expenditure.......................................... 7,645 6,500 5,758
------- ------- -------
TOTAL EXPENDITURE(3.2)..................................... 42,920 37,345 33,705
Dividend on own shares..................................... 72 58 51
------- ------- -------
RESULT BEFORE TAXATION(3.4)................................ 4,559 3,800 3,292
Taxation................................................... 1,203 1,138 994
------- ------- -------
RESULT AFTER TAXATION...................................... 3,356 2,662 2,298
Third-party interests...................................... 35 13 (4)
------- ------- -------
NET PROFIT(3.4)............................................ 3,321 2,649 2,302
Dividend on preference shares.............................. 46 46 46
------- ------- -------
NET PROFIT AFTER DEDUCTING DIVIDEND ON PREFERENCE SHARES... 3,275 2,603 2,256
====== ====== ======

See accompanying Notes

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315

CONSOLIDATED STATEMENT OF CASH FLOWS
AMOUNTS IN MILLIONS OF GUILDERS

1996 1995 1994
-------- -------- --------

RESULT BEFORE TAXATION.................................... 4,559 3,800 3,292
Adjusted for:
-- depreciation......................................... 681 472 512
-- changes in deferred acquisition costs................ (508) (497) (415)
-- increase in insurance provisions..................... 11,627 11,348 8,962
-- value adjustments to receivables of the banking
operations........................................... 1,130 1,090 1,035
-- other................................................ (1,011) (639) 408
Advances/repayments lending............................... (36,607) (17,552) (7,456)
Trading portfolio purchases/sales (securities &
property)............................................... (7,999) (4,072) (4,278)
Net investments in tangible fixed assets.................. (831) (612) (590)
Changes in:
-- funds entrusted to and debt securities of the banking
operations........................................... 28,030 16,306 7,098
-- banks, not available on demand....................... 16,387 3,417 (359)
-- other receivables and accrued assets................. (4,684) (2,104) 1,403
-- other liabilities and accruals....................... 9,642 570 1,897
-- taxes payable........................................ (788) (699) (402)
-------- -------- --------
NET CASH FLOW FROM OPERATING ACTIVITIES................... 19,628 10,828 11,107
Investments and advances:
-- participating interests.............................. (617) (2,240) (347)
-- investments in shares and property................... (3,996) (2,798) (3,442)
-- investments in fixed-interest securities............. (150,923) (75,992) (68,127)
-- other investments.................................... (11,867) (10,785) (7,976)
Disposals and redemptions:
-- participating interests.............................. 389 65 194
-- investments in shares and property................... 3,613 1,670 3,185
-- investments in fixed-interest securities............. 130,052 63,753 56,535
-- other investments.................................... 9,256 9,723 6,118
-------- -------- --------
NET CASH FLOW FROM INVESTMENT ACTIVITIES.................. (24,093) (16,604) (13,860)
Subordinated loans of Group companies..................... 2,162 556 160
Bonds, loans taken up and deposits by reinsurers.......... 2,212 1,595 777
Private placings of ordinary shares....................... 1,270 129 129
Cash dividend............................................. (501) (125) (126)
-------- -------- --------
NET CASH FLOW FROM FINANCING ACTIVITIES................... 5,143 2,155 940
Net cash flow............................................. 678 (3,621) (1,813)
Cash at beginning of year................................. 3,851 7,029 9,062
Exchange rate differences................................. (173) 443 (220)
-------- -------- --------
CASH AT YEAR-END.......................................... 4,356 3,851 7,029
========= ========= =========
In this summary, cash comprises the following items:
Short-term government securities........................ 893 2,454 1,517
Bank deposits available on demand....................... 79 (990) 1,118
Cash and bank balances and call money of the insurance
operations........................................... 3,384 2,387 4,394
-------- -------- --------
CASH AT YEAR-END........................................ 4,356 3,851 7,029
========= ========= =========

The consolidated statement of cash flows has been compiled on the basis of
what is known as the indirect method in accordance with which the pre-tax result
of the net cash flow from operating activities is adjusted for those items in
the profit and loss account which do not give rise to income and expenditure in
the financial year.

See accompanying Notes

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316

INVESTMENT RESULT FROM INVESTMENTS IN SHARES AND PROPERTY
AMOUNTS IN MILLIONS OF GUILDERS

OPERATING INVESTMENT RESULT(1)
EXCHANGE & -------------------------------
RATE MANAGEMENT BEFORE AFTER
INCOME REVALUATIONS(1) DIFFERENCES EXPENSES TAXATION TAXATION IN %(2)
------ --------------- ----------- ---------- -------- -------- -------

SHARES AND
CONVERTIBLE
DEBENTURES
1996................ 895 6,886 336 (6) 8,111 7,532 38.5
1995................ 730 2,897 (284) (13) 3,330 3,048 18.4
1994................ 619 (996) (154) (9) (540) (491) (2.9)
1993................ 580 3,937 188 (8) 4,697 4,391 34.2
1992................ 587 754 (57) (13) 1,271 1,186 9.0
Average 682 2,696 6 (10) 3,374 3,133 19.4
LAND AND BUILDINGS
1996................ 993 (33) 196 (233) 923 636 6.2
1995................ 946 (64) (164) (233) 485 337 3.4
1994................ 907 (127) (103) (236) 441 283 2.7
1993................ 839 (42) 41 (170) 668 480 4.7
1992................ 838 (428) (129) (182) 99 102 1.0
Average 905 (139) (32) (211) 523 368 3.6
TOTAL
1996................ 1,888 6,853 532 (239) 9,034 8,168 27.4
1995................ 1,676 2,833 (448) (246) 3,815 3,385 12.7
1994................ 1,526 (1,123) (257) (245) (99) (208) (0.8)
1993................ 1,419 3,895 229 (178) 5,365 4,871 21.1
1992................ 1,425 326 (186) (195) 1,370 1,288 5.6
Average 1,587 2,557 (26) (221) 3,897 3,501 13.2

- ---------------

(1) The investment result from investments in shares and property (excluding
investments for risk of life policyholders and investments of annual life
funds) includes all the income and expenditure associated with this category
of investments except financing charges. In the annual accounts this income
and expenditure is partly taken to the profit and loss account (income,
operating and management expenses and the taxation on these items) and
partly reflected direct as changes in Group equity (revaluations, realized
and unrealized, exchange rate differences and taxation on these items).
Taxation is allocated on the basis of the standard rate, making allowance
for tax exemptions. See also Note 8.2.

(2) Investment result after taxation as a percentage of the average amount
invested.

F-6
317

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

1. ACCOUNTING PRINCIPLES FOR THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS
ACCOUNT

1.1. INTRODUCTION

ING Group comprises ING Groep N.V., ING Verzekeringen N.V., ING Bank N.V.
and their Group companies. ING Group is an economic entity with characteristics
of both an insurance company and a bank. In the classification of the items in
the consolidated balance sheet and profit and loss account and in the principles
of valuation and determination of results, maximum effort has accordingly been
made to reflect both regulatory standards and customary practices in the
industries concerned.

ING Group's financial statements have been prepared in accordance with
generally accepted accounting principles in the Netherlands, as described in
this section. Reference is made to Note 7 herein, which sets forth the material
differences between the generally accepted accounting principles as applied by
the Company (Dutch GAAP) and such accounting principles generally accepted in
the United States (U.S. GAAP), as well as a reconciliation of the Company's
shareholders' equity and net profit determined in accordance with Dutch GAAP to
such figures determined in accordance with U.S. GAAP. Reference is also made to
Note 8 herein which sets forth additional information required by U.S. GAAP
including information which supplements certain of the Dutch GAAP information
included in Notes 1 to 6 herein.

1.2. CHANGES IN THE RULES FOR VALUATION AND DETERMINATION OF RESULTS

With effect from 1995 there has been a change in the statutory requirements
relating to the annual accounts of insurance companies. ING Group took this
opportunity to reconsider the impact of the rising life expectancy of
policyholders on the calculation of the provision for life policy liabilities.
Based on the new regulations and expected further increase in longevity, ING
Group decided as a prudential measure to adapt the valuation principle for the
provision for life policy liabilities. The impact of this change in accounting
policies, after allowing for (deferred) taxation, was a non-recurring charge of
NLG 1,025 million; this amount has been charged to shareholders' equity. In so
doing, ING Group is following the procedure for accounting for the non-recurring
effect of changes in accounting policies via shareholders' equity preferred by
the Council for Annual Reporting. If the new rules for valuation and
determination of results had been applied in 1994, ING Group's net profit for
that year would have been NLG 35 million higher.

1.3. CHANGES IN PRESENTATION

ING Group has presented the financial information relating to its insurance
activities in 1995 on the basis of the new regulations for insurance companies.
Also, the presentation of the financial information relating to the banking
activities has been changed slightly. The changes mainly relate to different
classification and analysis of the figures. The figures for preceding periods
have been restated where necessary.

Also with effect from 1995, intra-Group accounts between the insurance and
the banking operations are, to the extent that they derive from financing
arrangements, eliminated. In view of their relatively minor significance, these
accounts had not been eliminated in earlier accounting periods. Figures for
these earlier periods have been restated where necessary. The adjustments have
no effect on the result.

1.4. CONSOLIDATION PRINCIPLES

The assets, liabilities, income and expenditure of ING Groep N.V. and its
Group companies are included in full in the consolidation, including those of
Stichting Regio Bank. Where relevant to the understanding of ING Group's
shareholders' equity and results, the financial data of joint ventures are

F-7
318

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

included in proportion to the Group's interest. Third-party interests in the
equity and results of Group companies are shown separately in the consolidated
balance sheet and profit and loss account.

The market value of the depositary receipts for ordinary and preference
shares of ING Groep N.V. held by Group companies is deducted from shareholders'
equity and the dividends received on these shares are eliminated from the
result.

In order to provide an understanding of the development of the pre-tax
result, a more detailed segmentation is given in the notes to the consolidated
profit and loss account. The list of "Principal Group companies" presented on
page F-103 is divided into companies associated with the insurance operations
and companies associated with the banking operations.

The operating result before taxation of the insurance operations is further
segmented into life insurance, non-life insurance and insurance
operations -- general. The insurance operations -- general result includes
investment income not attributable to underwriting activities along with other
income. The parent company profit and loss account has been drawn up in
accordance with Section 402, Book 2, of the Netherlands Civil Code. A list
containing the information referred to in Section 379 (1) and Section 414, Book
2, of the Netherlands Civil Code has been lodged with the office of the
Commercial Register of Amsterdam, pursuant to the provisions of Section 379 (5),
Book 2, of the Netherlands Civil Code.

1.5. CHANGES IN THE COMPOSITION OF THE GROUP

A majority interest was obtained in the Polish bank Slaski S.A. at the end
of July 1996. The results of this company are included in the consolidated
figures with effect from August 1, 1996. In early October 1996, a majority
interest was obtained in the Dutch corporation Bank Mendes Gans N.V. The results
of this company are included in the consolidated figures with effect from
October 1, 1996.

The Canadian non-life insurer Wellington Insurance Company was acquired in
January 1995. The results of this company are included in the consolidated
figures with effect from January 1, 1995.

On March 5, 1995 virtually all the assets and liabilities of Barings Group
were acquired, including the Baring Brothers & Co and Baring Securities
operations and the activities of Baring Asset Management. The results of
operations of the Barings Group are included in the consolidated figures with
effect from March 6, 1995.

1.6. PRINCIPLES OF VALUATION AND DETERMINATION OF RESULTS

1.6.1. GENERAL PRINCIPLES

Assets and liabilities are shown at nominal value except where a different
valuation principle is stated below.

1.6.1.1. FOREIGN CURRENCIES

Assets and liabilities in foreign currencies together with forward foreign
exchange contracts relating to borrowing and lending are translated at the spot
rates prevailing at balance sheet date. The other forward contracts in foreign
currencies are valued at the market quotations for their remaining terms at the
balance sheet date.

Income and expenditure arising out of foreign currency transactions are
translated at the rates prevailing at transaction date.

Income and expenditure of business entities outside the Netherlands are
translated at average exchange rates for the year.

Exchange rate differences are taken to the profit and loss account. As an
exception to this general rule, the following exchange rate differences are
credited or debited to Group equity:

- -- exchange rate differences on assets and liabilities of business entities
outside the Netherlands not relating to monetary assets and liabilities in
countries with very high rates of inflation;

F-8
319

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

- -- exchange rate differences on participating interests and investments as well
as on liabilities assumed in connection with their financing not relating to
countries with high rates of inflation;

- -- exchange rate differences on insurance funds and on investments serving to
cover these liabilities;

- -- exchange rate differences on forward contracts and loans serving to hedge
exchange rate risks on the above-mentioned foreign interests and investments;

- -- exchange rate differences on results of business entities outside the
Netherlands arising from differences between the spot rates at balance sheet
date and the average rates for the year.

The (swap) results on forward contracts related to borrowing and lending
are included in the profit and loss account in proportion to the expired part of
the terms of the contracts concerned.

The exchange rates used for translating the most important currencies for
ING Group into Dutch guilders (average rates for the year and spot rates
prevailing at year-end) are as follows:

1996 1995 1994
------------------- ------------------- -------------------
AVERAGE YEAR-END AVERAGE YEAR-END AVERAGE YEAR-END
------- -------- ------- -------- ------- --------

U.S. dollar.................... 1.6826 1.7410 1.6024 1.6025 1.8218 1.7350
Australian dollar.............. 1.3164 1.3865 1.1909 1.1935 1.3289 1.3465
Belgian franc.................. 0.0545 0.0545 0.0545 0.0545 0.0545 0.0545
Canadian dollar................ 1.2331 1.2715 1.1678 1.1760 1.3341 1.2360
German mark.................... 1.1208 1.1224 1.1202 1.1194 1.1213 1.1202
Pound sterling................. 2.6420 2.9580 2.5335 2.4770 2.7853 2.7125
French franc................... 0.3298 0.3329 0.3221 0.3273 0.3281 0.3247
Japanese yen................... 0.0155 0.0150 0.0171 0.0156 0.0178 0.0174

1.6.1.2. FINANCIAL INSTRUMENTS (DERIVATIVES)

Financial instruments serving to limit the risks on own positions are
accounted for in accordance with the principles of valuation and determination
of results applicable to the positions concerned. The other financial
instruments are stated at (estimated) realizable value. The resultant gains and
losses are included in the profit and loss account as Result from financial
transactions, a component of Other income.

1.6.1.3. PREMIUM REVENUE RECOGNITION

Premiums for life insurance products, including universal life and
investment-type contracts, are generally recognized as premium revenue when due.
Premiums for non-life insurance products are generally recognized ratably over
the in-force period of the policies written.

Reinsurance premiums, commissions, expense reimbursements, and reserves
related to reinsured business are accounted for on bases consistent with those
used in accounting for the original policies issued and the terms of the
reinsurance contracts.

1.6.1.4. TAXATION

Domestic and foreign corporation tax is calculated on the result before
taxation shown in the annual accounts, taking into account allowable deductions,
charges and exemptions.

1.6.2. SPECIFIC PRINCIPLES

1.6.2.1. ASSETS GENERALLY

With regard to assets, a diminution in value is applied where necessary for
credit risk exposure. The amount of this diminution in value is determined on
the basis of an assessment of the risk attached to the receivables concerned,
among other factors. Transfer risks on receivables from certain countries are
also taken into account.

F-9
320

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

In addition to the specific diminutions in the value of assets referred to
above, an extra diminution in value in respect of general banking risks is made.
This is limited to 4% of the book value of certain assets of the banking
operations before deduction of this diminution in value. The amounts added to
and released from this fund for diminutions in value not relating to specific
receivables are included in the profit and loss account as Value adjustments to
receivables of the banking operations. The deferred tax asset which results from
this extra diminution in value which is not deductible for corporation tax
purposes, is netted against this extra diminution in value.

1.6.2.2. TANGIBLE FIXED ASSETS

Tangible fixed assets are stated at cost less straight-line depreciation on
the basis of their estimated economic lives.

1.6.2.3. PARTICIPATING INTERESTS

Participating interests where a significant influence is exercised on
commercial and financial policy are stated at net asset value. The share in the
results of these participating interests is shown in the profit and loss
account. When these participating interests are included in the balance sheet
for the first time, the difference between cost and net asset value is credited
or debited to shareholders' equity. Other participating interests are stated at
estimated realizable value; dividends received are credited to the profit and
loss account. Changes in respect of revaluation are credited or debited to
shareholders' equity. On disposal of participating interests the difference
between the balance sheet value and the proceeds from sale is credited or
debited to shareholders' equity.

1.6.2.4. INVESTMENTS

Changes resulting from revaluations of investments held for the Group's own
risk in property, shares and convertible debentures, whether realized or
unrealized, are credited or debited to Group equity, allowing for taxation. In
the case of life insurance companies, where there is a relationship between the
value of the investments and the level of the insurance provisions, differences
resulting from revaluations as well as realized gains and losses are included in
either Provision for life policy liabilities or Insurance provisions for
policies where the policyholders bear the investment risk and for annual life
funds, through the profit and loss account.

Land and buildings

Land and buildings are stated at the estimated proceeds on private sale,
allowing for the expected yield and the type and location of the property
concerned. Professional valuations are made by rotation in such a way as to
ensure that all properties are appraised at least once every five years.
Value-enhancing investments in existing properties made since the last valuation
are capitalized at the cost of the investment until the next valuation. Land and
buildings, with the exception of commuted ground rents, are not depreciated.
Land and buildings under construction are stated at the direct purchase and
construction costs incurred up to balance sheet date plus interest during
construction and the Group's own development and supervision expenses, where
necessary less any expected diminution in value on completion.

Shares and convertible debentures

Listed shares and convertible debentures together with related options are
stated at their quoted prices as at balance sheet date. Unlisted securities are
stated at their estimated realizable value.

F-10
321

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Fixed-interest securities

Fixed-interest securities are stated at redemption value. "Climbing" loans,
consisting of loans with negative amortization made to Dutch public housing
societies, are valued inclusive of accrued interest. The difference between
redemption value and purchase price is included as yield difference in Accrued
liabilities or in Accrued assets and is amortized over the average remaining
term of the investments concerned, and either credited or debited to the result.

Fixed-interest securities on which interest is not received annually and on
which the redemption value is paid out as a lump sum at maturity (such as
zero-coupon bonds and savings certificates) are included at purchase price plus
the proportion of the difference between purchase price and redemption value
related to the period elapsed since the date of purchase.

The result on disposal, i.e. the difference between the proceeds on
disposal and the book value, is likewise shown as yield difference. Allowing for
the weighted average remaining term of the investment portfolio, these yield
differences are included in the profit and loss account.

Investments in interest-only securities are included at purchase price. The
interest received is reduced each year by a proportion of the purchase price
related to the expected remaining term.

Interests in investment pools

These are stated in accordance with the valuation principles of the pools
concerned.

Investments for risk of life policyholders and investments of annual life funds

In the valuation of these investments, the same principles are generally
applied as to the valuation of the investments held for the Group's own risk
except that fixed-interest securities directly linked to life policy liabilities
and the annual funds of the annual life fund operations are stated at market
value plus accrued interest where relevant.

1.6.2.5. LENDING

Leased durable (movable) assets are stated at purchase price less
depreciation and provisions determined on the basis of the type of asset
concerned, contract period, estimated economic life and residual value.

1.6.2.6. OTHER ASSETS

Government and other securities in the trading portfolio are stated at
market value, which generally means quoted prices. Securities trading portfolio,
equity participations and fixed-interest securities repurchased after issue by
Group companies are stated at the lower of cost and market value. Capital gains
and losses, both realized and unrealized, on the securities in the trading
portfolio are included in the profit and loss account. Property under
development is valued at direct construction cost incurred up to the balance
sheet date, plus interest during construction and the Group's own development
and supervision expenses, where necessary, less any expected diminution in value
on sale. Rented property and infrastructure works are valued at the estimated
proceeds on private sale or the contractually agreed selling price. Gains and
losses (including realized revaluations) on the sale of property under
development, rented property and infrastructure works and any downward value
adjustments are reflected in the profit and loss account.

1.6.2.7. ACCRUED ASSETS

Directly variable costs incurred in securing new life insurance policies
for which periodic premiums are payable are deferred and amortized over the
average period for which premiums are receivable, with allocation to such
periods being made on an annuity basis. Costs of acquiring non-life insurance
business

F-11
322

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

which vary with and are primarily related to the production of such business are
deferred and amortized ratably over the period the related premiums are
recognized.

1.6.2.8. GENERAL PROVISIONS

Deferred tax liabilities

Deferred tax liabilities are stated at the face value of the tax
liabilities attaching to differences between the valuation for accounting and
tax purposes of assets and liabilities as well as to the reserves permitted for
tax purposes, including the tax equalization reserve of the insurance
operations. The face value is calculated at the prevailing rate of corporation
tax in the countries where the Group is active. Deferred tax claims are taken
into account if they can be expected to be realized in due course. The effect of
dividend withholding tax is not taken into account in respect of the retained
earnings of participating interests.

Pension liabilities

The Provision for pension liabilities relates to pension entitlements not
covered elsewhere. The pension entitlements of the vast majority of the staff in
the Netherlands, which are based on the number of years in service according to
the final-pay system, are insured with Stichting Nationale-Nederlanden
Pensioenfonds and Stichting Pensioenfonds ING Bank, with annual additions being
made to the funds in amounts necessary to cover the existing liabilities in
respect of past years of service. Regarding the remaining staff in the
Netherlands and staff in other countries, adequate provisions have been made to
meet the liabilities arising out of pension commitments.

Other personnel-related provisions

Provisions for early retirement and disability benefit supplements as well
as provisions for benefits payable to employees no longer in active service are
determined on the basis of the actuarial value of the commitments entered into.
For employees in the United States of America these provisions are created
during the period of active service.

1.6.2.9. INSURANCE PROVISIONS

Provision for life policy liabilities

The Provision for life policy liabilities is estimated using assumptions as
to investment yields, mortality, withdrawals, and other assumptions based on ING
Group's and industry experience, modified as necessary to reflect anticipated
trends, and having regard to the conditions of current insurance contracts. The
as yet unamortized interest-rate rebates on periodic and single premium
contracts are deducted from the provision for life policy liabilities.
Interest-rate rebates granted during the year are capitalized and amortized in
conformity with the anticipated recovery pattern.

The adequacy of the Provision for life policy liabilities is evaluated each
year and augmented if necessary with a provision for any inadequacy due to the
applied principles. The test for adequacy takes into account future developments
and allows for remaining unamortized interest-rate rebates and deferred costs of
securing new life business. The assumptions used to estimate the provisions vary
by policy series, plan, year of issue, and policy duration. Interest assumptions
on current life policies range from 2.25% to 11.25%. Policy benefit claims are
charged to expense in the year that the claims are incurred.

F-12
323

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Provision for unearned premiums and unexpired non-life insurance risks

The Provision for unearned premiums and unexpired non-life insurance risks
is calculated in proportion to the unexpired periods of risk. The corresponding
part of the commission incurred is included in Accrued assets. For insurance
policies covering a risk increasing during the term of the policy at premium
rates independent of age, this risk is taken into account in determining the
provision. Further provisions are made to cover claims under unexpired insurance
contracts which may exceed the unearned premiums and the premiums due in respect
of these contracts.

Claims provision

The Claims provision is calculated either case by case or by approximation
to this method on the basis of experience. Provisions have also been made for
claims incurred but not reported and for future claims handling expenses. The
estimates are continually reviewed and necessary adjustments are reported in the
profit and loss account. Other than provisions for long duration disability
contracts sold in the Netherlands and Australia, ING Group maintains claims
provisions on an undiscounted basis.

The Claims provision also includes marine and aviation insurance funds.
Included in the marine and aviation insurance funds is the balance of premiums
written, investment income, claims recorded, commission and expenses in respect
of all underwriting years up to and including the year under review, adjusted
for the amounts taken to the profit and loss account. Each underwriting year is
closed at the end of the third financial year. After provision has been made, on
the basis of best judgement, for all liabilities reported and unreported but
expected in connection with the underwriting year which has been closed, the
result for that year is determined and settled with the fund. If necessary, the
funds in respect of the underwriting years not yet closed are augmented. The
run-off of underwriting years already closed is taken into account to the extent
that this may be reasonably estimated.

Other insurance provisions

This represents a provision to cover the risk of possible catastrophes. The
addition to this provision is based on the estimated cost of underwriting these
risks with third parties.

Insurance provisions for policies where the policyholders bear the investment
risk, and for annual life funds

The provisions for the segregated investment deposits, included in this
item, are calculated on the same basis as the provision for life policy
liabilities. For insurances where policyholders bear the investment risk and for
annual life funds, the insurance provisions are generally shown at the balance
sheet value of the associated investments.

1.6.2.10. FUNDS ENTRUSTED TO AND DEBT SECURITIES OF THE BANKING OPERATIONS

The savings accounts included in Funds entrusted to and debt securities of
the banking operations are stated inclusive of interest payable insofar as it is
contractually agreed that this will be added to the savings accounts.

1.6.2.11. USE OF ESTIMATES

The preparation of the financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.

F-13
324

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

2. NOTES TO THE CONSOLIDATED BALANCE SHEET

ASSETS

2.1. TANGIBLE FIXED ASSETS

1996 1995
----- -----

Data processing equipment................................................ 611 616
Other movable fixed assets............................................... 1,189 921
----- -----
1,800 1,537
===== =====
Opening balance.......................................................... 1,537 1,243
Additions................................................................ 1,124 718
Changes in the composition of the Group.................................. 2 171
Disposals................................................................ (229) (109)
Depreciation............................................................. (678) (472)
Exchange rate differences................................................ 44 (43)
Other changes............................................................ -- 29
----- -----
CLOSING BALANCE.......................................................... 1,800 1,537
===== =====

Accumulated depreciation of the tangible fixed assets shown in the balance
sheet as at December 31, 1996 was NLG 2,099 million (1995: NLG 1,750 million).

2.2. PARTICIPATING INTERESTS

1996 1995
----- -----

Shares................................................................... 3,213 2,511
Receivables from participating interests................................. 396 521
----- -----
3,609 3,032
===== =====

SHARES RECEIVABLES
--------------- --------------
1996 1995 1996 1995
----- ----- ----- ----

Opening balance........................................ 2,511 2,033 521 423
Additions and advances................................. 242 247 25 228
Changes in the composition of the Group................ 56 63 -- --
Transfer from Investments.............................. 457 -- -- --
Revaluations........................................... 194 189 -- --
Changes in provision for credit risk exposure.......... -- -- 29 (8)
Result from participating interests.................... 59 68 -- --
Dividend received...................................... (10) (12) -- --
Disposals and redemptions.............................. (327) (20) (186) (119)
Exchange rate differences.............................. 31 (23) 7 (3)
Other changes.......................................... -- (34) -- --
----- ----- ----- ----
CLOSING BALANCE........................................ 3,213 2,511 396 521
===== ===== ===== =====

The balance sheet value of the shares as at December 31, 1996 includes
revaluations of NLG 851 million (1995: NLG 320 million), cost amounting to NLG
2,362 million (1995: NLG 2,321 million). The fair value of the Receivables from
participating interests is NLG 402 million (1995: NLG 558 million).

F-14
325

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

2.3. INVESTMENTS

1996 1995
-------- --------

Land and buildings, including commuted ground rents................ 10,749 9,990
Shares and convertible debentures.................................. 26,390 19,754
Fixed-interest securities.......................................... 127,136 103,313
Interests in investment pools of the insurance operations.......... 617 720
Deposits with insurers............................................. 58 52
Investments for risk of policyholders and investments of annual
life funds....................................................... 23,519 19,929
-------- --------
188,469 153,758
======== ========

Investments include some shareholdings representing more than 20% which are
not regarded as participating interests.

2.3.1. LAND AND BUILDINGS

INSURANCE BANKING
OPERATIONS OPERATIONS TOTAL
--------------- --------------- -----------------
1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------

Land and buildings wholly or
partially in use by Group
companies.......................... 1,300 1,173 1,815 1,821 3,115 2,994
Other land and buildings............. 7,624 6,992 10 4 7,634 6,996
------ ------ ------ ------ ------ ------
8,924 8,165 1,825 1,825 10,749 9,990
====== ====== ====== ====== ====== ======

1996 1995
------ ------

Opening balance...................................................... 9,990 10,059
Additions............................................................ 1,049 550
Capitalized interest during construction............................. 12 7
Changes in the composition of the Group.............................. (18) (2)
Revaluations......................................................... (33) (63)
Disposals............................................................ (452) (394)
Depreciation of commuted ground rents................................ (2) (3)
Exchange rate differences............................................ 203 (164)
------ ------
CLOSING BALANCE...................................................... 10,749 9,990
====== ======

The balance sheet value as at December 31, 1996 includes revaluations of
NLG (785) million (1995: NLG (1,367) million), the cost or purchase price
amounting to NLG 11,534 million (1995: NLG 11,430 million).

Professional appraisals of land and buildings have been carried out in each
of the years listed below (the figures show the percentage of the balance sheet
value as at December 31, 1996):

YEARS OF APPRAISAL:
1996............................................................................. 42.2
1995............................................................................. 15.9
1994............................................................................. 14.5
1993............................................................................. 13.0
1992............................................................................. 14.4
-----
100.0
=====

F-15
326

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

2.3.2. SHARES AND CONVERTIBLE DEBENTURES

INSURANCE BANKING
OPERATIONS OPERATIONS TOTAL
--------------- --------------- ---------------
1996 1995 1996 1995 1996 1995
------ ------ ------ ------ ------ ------

Listed................................. 27,255 19,594 266 85 27,521 19,679
Unlisted............................... 1,571 1,582 52 134 1,623 1,716
------ ------ --- --- ------ ------
28,826 21,176 318 219 29,144 21,395

Less: shares in ING Groep N.V. held by
Group companies...................... 2,754 1,641
------ ------
26,390 19,754
====== ======

1996 1995
------- -------

Opening balance.................................................... 19,754 16,233
Additions and advances............................................. 3,213 2,176
Changes in the composition of the Group............................ 120 108
Transfer to Participating interests................................ (457) --
Revaluations....................................................... 6,939 2,897
Disposals and redemptions.......................................... (3,511) (1,376)
Exchange rate differences.......................................... 332 (284)
------ ------
CLOSING BALANCE.................................................... 26,390 19,754
====== ======

The balance sheet value as at December 31, 1996 includes revaluations of
NLG 13,095 million (1995: NLG 8,133 million), the cost or purchase price
amounting to NLG 13,295 million (1995: NLG 11,622 million).

Listed shares and convertible debentures include related options and shares
and convertible debentures traded over the counter in the United States of
America.

2.3.3. FIXED-INTEREST SECURITIES

1996 1995
------- -------

INSURANCE OPERATIONS
Debentures
-- listed......................................................... 33,448 28,557
-- unlisted....................................................... 9,307 6,675
Private loans....................................................... 20,306 19,426
Mortgage loans...................................................... 23,816 21,495
Policy loans........................................................ 1,890 1,655
Deposits with credit institutions................................... 710 328
Professional loans.................................................. 512 473
Other financial investments......................................... 55 408
------ ------
90,044 79,017
------ ------

F-16
327

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

1996 1995
------- -------

BANKING OPERATIONS
Debentures
-- listed......................................................... 32,093 15,989
-- unlisted....................................................... 1,318 2,470
Private loans....................................................... -- 10
Short-term government securities:
-- the Netherlands................................................ 893 1,049
-- other countries................................................ 2,179 985
Certificates of deposit............................................. 2,445 5,396
Commercial paper.................................................... 426 364
Savings certificates................................................ 10 23
------- -------
39,364 26,286
Eliminations........................................................ 2,272 1,990
------- -------
TOTAL............................................................... 127,136 103,313
======== ========

1996 1995
-------- -------

Opening balance................................................... 103,313 92,381
Additions and advances............................................ 141,126 75,863
Yield differences................................................. 743 484
Changes in the composition of the Group........................... 1,576 1,241
Disposals and redemptions......................................... (122,094) (64,387)
Exchange rate differences......................................... 2,505 (2,275)
Other changes..................................................... (33) 6
-------- -------
CLOSING BALANCE................................................... 127,136 103,313
========= ========

The estimated fair value of the investments in fixed-interest securities as
at December 31 amounts to:

1996 1995
------- -------

INSURANCE OPERATIONS
Debentures.......................................................... 45,683 38,280
Private loans....................................................... 22,616 20,859
Mortgage loans...................................................... 25,170 21,664
Other investments................................................... 3,147 2,823
------- -------
96,616 83,626
BANKING OPERATIONS
Debentures.......................................................... 33,433 18,526
Other investments................................................... 6,720 7,522
------- -------
40,153 26,048
Eliminations........................................................ 2,446 1,553
------- -------
134,323 108,121
======== ========

The balance sheet value as at December 31, 1996 includes NLG 617 million
(1995: NLG 529 million) in respect of listed securities issued by the Group.

Listed debentures include debentures and other fixed-interest securities
traded over the counter in the United States of America.

F-17
328

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

2.3.4. INVESTMENTS FOR RISK OF POLICYHOLDERS AND INVESTMENTS OF ANNUAL LIFE
FUNDS

1996 1995
------ ------

Land and buildings................................................... 225 203
Shares and convertible debentures.................................... 3,307 2,126
Fixed-interest securities............................................ 18,590 16,714
Other investments.................................................... 1,397 886
------ ------
23,519 19,929
====== ======

1996 1995
------ ------

Opening balance...................................................... 19,929 18,879
Additions and advances............................................... 11,073 10,785
Changes in the composition of the Group.............................. 35 1
Disposals and redemptions............................................ (9,251) (9,723)
Exchange rate differences............................................ 622 (322)
Other changes........................................................ 1,111 309
------ ------
CLOSING BALANCE...................................................... 23,519 19,929
====== ======

Investments for risk of life policyholders and investments of annual life
funds include investments related directly to life policy liabilities,
segregated investments with contractual sharing of results and the investments
of the annual funds of the annual life fund operations.

2.4. LENDING

Lending relates to receivables from non-banks, other than in the form of
interest-earning securities.

The consolidated balance sheet as at December 31, 1996 also includes
operational lease contracts totalling NLG 2,913 million (1995: NLG 2,749
million).

Analyzed by security:

1996 1995
------- -------

Private sector:
-- guaranteed by public authorities............................ 22,273 22,158
-- secured by mortgages........................................ 84,936 69,588
-- guaranteed by credit institutions........................... 1,072 1,103
-- other....................................................... 88,497 68,360
------- -------
196,778 161,209
Public sector.................................................... 5,070 5,257
------- -------
201,848 166,466
======== ========

F-18
329

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Private sector lending analyzed by industry:

1996 1995
------- -------

Agriculture, horticulture, forestry and fisheries................ 5,671 1,608
Manufacturing.................................................... 24,917 23,779
Service industry................................................. 52,559 47,110
Financial institutions........................................... 48,889 27,560
Other............................................................ 64,742 61,152
------- -------
196,778 161,209
======== ========

Analyzed by remaining term:

1996 1995
------- -------

Available on demand.............................................. 18,945 19,310
Not available on demand:
-- up to three months.......................................... 36,007 19,141
-- three months to one year.................................... 22,492 18,747
-- one year to five years...................................... 51,527 51,742
-- over five years............................................. 72,877 57,526
------- -------
201,848 166,466
======== ========

Analyzed by non-subordinated and subordinated receivables:

1996 1995
------- -------

Non-subordinated................................................. 201,323 166,043
Subordinated..................................................... 525 423
------- -------
201,848 166,466
======== ========

2.5. BANKS

This relates to receivables from domestic and foreign banks, other than in
the form of interest-earning securities.

Analyzed by remaining term:

1996 1995
------ ------

Available on demand.................................................. 4,324 2,556
Not available on demand:
-- up to three months.............................................. 21,593 17,252
-- three months to one year........................................ 8,995 11,537
-- one year to five years.......................................... 1,256 1,346
-- over five years................................................. 1,185 1,840
------ ------
37,353 34,531
====== ======

Analyzed by non-subordinated and subordinated receivables:

1996 1995
------ ------

Non-subordinated..................................................... 37,075 34,403
Subordinated......................................................... 278 128
------ ------
37,353 34,531
====== ======

F-19
330

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

2.6. CASH

1996 1995
------ ------

Cash and bank balances............................................... 2,400 1,710
Call money of the insurance operations............................... 678 677
------ ------
3,078 2,387
====== ======

Cash includes till money held at post offices, demand deposits with central
banks and balances held by the insurance operations with other banks. Amounts
receivable by the banking operations from domestic and foreign banks are
included in Banks.

2.7. OTHER ASSETS

1996 1995
------ ------

Securities and options................................................ 22,454 14,822
Property.............................................................. 2,824 2,423
Other receivables..................................................... 10,388 7,044
------ ------
35,666 24,289
====== ======

As at December 31, 1996, Property included NLG 26 million (1995: NLG 15
million) in respect of capitalized interest during construction.

Other receivables include:

1996 1995
----- -----

Receivables on account of direct insurance from:
-- policyholders....................................................... 1,651 1,235
-- intermediaries...................................................... 764 785
Reinsurance receivables.................................................. 373 518

2.8. ACCRUED ASSETS

1996 1995
------ ------

Accrued interest and rents............................................ 5,782 5,282
Deferred acquisition costs............................................ 4,749 4,083
Other accrued assets.................................................. 1,544 899
------ ------
12,075 10,264
====== ======

Changes in deferred acquisition costs:

NON-LIFE
LIFE INSURANCE INSURANCE TOTAL
--------------- --------------- ---------------
1996 1995 1996 1995 1996 1995
----- ----- ----- ----- ----- -----

Opening balance..................... 3,603 3,277 480 455 4,083 3,732
Capitalized......................... 1,037 1,021 37 30 1,074 1,051
Amortization........................ (521) (535) (46) (19) (567) (554)
Changes in the composition of the
Group............................. -- 34 -- 35 -- 69
Exchange rate differences........... 129 (194) 28 (21) 157 (215)
Other changes....................... -- -- 2 -- 2 --
----- ----- ----- ----- ----- -----
CLOSING BALANCE..................... 4,248 3,603 501 480 4,749 4,083
===== ===== ===== ===== ===== =====

F-20
331

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

LIABILITIES

2.9. SHAREHOLDERS' EQUITY

1996 1995 1994
------ ------ ------

SHAREHOLDERS' EQUITY........................................ 34,124 23,777 21,758
====== ====== ======
Opening balance............................................. 23,777 21,758 21,481
Changes in the composition of the Group..................... (450) (1,578) (21)
Revaluations after taxation................................. 6,703 2,873 (1,098)
Exchange rate differences................................... 590 (699) (766)
Charge, after deduction of taxation, relating to full
provision for longevity risk.............................. -- (1,025) --
Exercise of optional dividend............................... 859 977 863
Private placements.......................................... 1,244 136 129
From proposed profit appropriation.......................... 1,714 1,400 1,220
------ ------ ------
34,437 23,842 21,808
Changes in ING Groep N.V. shares held by
Group companies........................................... (313) (65) (50)
------ ------ ------
CLOSING BALANCE............................................. 34,124 23,777 21,758
====== ====== ======

As at December 31, for each of the years indicated, shareholders' equity
was employed in the various activities as follows:

1996 1995 1994
------- ------- -------

Group equity employed in the insurance operations........... 27,830 18,610 15,561
Group equity employed in the banking operations............. 15,001 11,911 10,174
Own shares held by the Group, subordinated loan, third-party
interests, debenture loan and sundries.................... (8,707) (6,744) (3,977)
------- ------- -------
34,124 23,777 21,758
====== ====== ======

2.10. SUBORDINATED LOAN

1996 1995
----- -----

SUBORDINATED LOAN........................................................ 1,068 1,068
===== =====

10% subordinated debenture loan due March 15, 2001 issued by ING Groep N.V.
on March 15, 1991.

2.11. GENERAL PROVISIONS

1996 1995
------ ------

Deferred tax liabilities................................................. 1,187 1,465
Pension liabilities...................................................... 94 77
Provision for early retirement........................................... 175 174
Provision for other non-activity schemes................................. 502 473
Reorganizations and relocations.......................................... 469 517
Other general provisions................................................. 1,144 658
------ ------
3,571 3,364
===== =====

Other general provisions includes provisions for information technology,
preparation for the introduction of the euro and preparation to avoid the
potential adverse effects on computer systems of reaching the year 2000. The
general provisions are mainly of a long-term nature.

F-21
332

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

2.12. INSURANCE PROVISIONS

REINSURANCE
GROSS ELEMENT TOTAL OWN ACCOUNT
----------------- ----------------- -----------------
1996 1995 1996 1995 1996 1995
------- ------- ------- ------- ------- -------

Provision for life-policy
liabilities................... 87,722 78,150 1,677 1,991 86,045 76,159
Provision for profit sharing and
rebates....................... 1,297 1,137 135 110 1,162 1,027
Provision for unearned premiums
and unexpired non-life
insurance risks............... 2,960 2,691 116 148 2,844 2,543
Claims provision................ 8,063 7,413 632 657 7,431 6,756
Other insurance provisions...... 405 359 -- -- 405 359
------- ------- ------- ------- ------- -------
100,447 89,750 2,560 2,906 97,887 86,844
Insurance provisions for
policies where the
policyholders bear the
investment risk and for annual
life funds.................... 23,974 20,872 455 943 23,519 19,929
------- ------- ------- ------- ------- -------
124,421 110,622 3,015 3,849 121,406 106,773
======== ======== ======== ======== ======== ========

Changes in the unamortized interest-rate rebates included in the Provision
for life-policy liabilities were as follows:

1996 1995
----- -----

Opening balance......................................................... 2,658 1,981
Interest-rate rebates paid.............................................. 375 1,159
Amortized............................................................... (430) (453)
Exchange rate differences............................................... 32 (27)
Other changes........................................................... 140 (2)
----- -----
CLOSING BALANCE......................................................... 2,775 2,658
===== =====

The insurance provisions are generally of a long-term nature.

2.13. FUNDS ENTRUSTED TO AND DEBT SECURITIES OF THE BANKING OPERATIONS

1996 1995
------- -------

Savings accounts................................................. 66,600 57,785
Other funds entrusted............................................ 110,244 96,561
------- -------
FUNDS ENTRUSTED.................................................. 176,844 154,346
Debt securities.................................................. 28,041 22,071
------- -------
204,885 176,417
======== ========

SAVINGS ACCOUNTS

Savings accounts relate to the balances on savings accounts, savings books,
savings deposits and time deposits of personal customers. The interest payable
on savings accounts which is contractually added to the accounts is also
included in this item.

F-22
333

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Analyzed by remaining term:

1996 1995
------- -------

Payable on demand................................................ 58,364 52,564
Not payable on demand:
-- up to three months.......................................... 4,213 1,164
-- three months to one year.................................... 1,340 331
-- one year to five years...................................... 1,699 3,103
-- over five years............................................. 984 623
------- -------
66,600 57,785
======== ========

OTHER FUNDS ENTRUSTED

1996 1995
------- -------

Private loans.................................................... 6,753 7,960
Mortgage loans................................................... 160 165
Corporate time deposits.......................................... 48,381 42,483
Credit balances on customer accounts............................. 54,950 45,953
------- -------
110,244 96,561
======== ========

Analyzed by remaining term:

1996 1995
------- -------

Payable on demand................................................ 58,150 42,426
Not payable on demand:
-- up to three months.......................................... 32,410 30,523
-- three months to one year.................................... 5,179 5,720
-- one year to five years...................................... 6,965 8,161
-- over five years............................................. 7,540 9,731
------- -------
110,244 96,561
======== ========

FUNDS ENTRUSTED

Funds entrusted relate to non-subordinated debts to non-banks insofar as
not embodied in debt securities.

DEBT SECURITIES

Debt securities include debentures and other issued debt securities with
either fixed interest rates or interest rates dependent on prevailing
interest-rate levels, such as certificates of deposit and accepted bills issued
by the Company, where not subordinated.

Debt securities falling due in 1997 amount to NLG 14,140 million as at
December 31, 1996. (Debt securities falling due in 1996: NLG 10,412 million as
at December 31, 1995).

F-23
334

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

2.14. BANKS

Banks include non-subordinated debts to domestic and foreign banks, insofar
as not represented by debt securities.

Analyzed by remaining term:

1996 1995
------ ------

Payable on demand.................................................... 6,457 3,546
Not payable on demand:
-- up to three months.............................................. 53,840 38,937
-- three months to one year........................................ 10,407 7,217
-- one year to five years.......................................... 1,400 1,103
-- over five years................................................. 299 1,193
------ ------
72,403 51,996
====== ======

2.15. OTHER LIABILITIES

Analyzed by type:

1996 1995
------ ------

Subordinated loans of Group companies................................ 7,269 5,069
Debenture loans...................................................... 2,894 2,658
Loans taken up....................................................... 2,968 3,104
Loans from credit institutions....................................... 1,619 1,249
Deposits from reinsurers............................................. 222 187
Pensions............................................................. 1 1
Taxation and social security contributions........................... 1,546 885
Dividend............................................................. 965 710
Other liabilities.................................................... 14,552 9,809
------ ------
32,036 23,672
====== ======

Analyzed by remaining term:

1996 1995
------------------------------ ------------------------------
FROM 1 FROM 1
UP TO TO 5 OVER UP TO TO 5 OVER
1 YEAR YEARS 5 YEARS 1 YEAR YEARS 5 YEARS
------ --------- ------- ------ --------- -------

Subordinated loans of Group
companies.................... 31 1,455 5,783 76 854 4,139
Debenture loans................ 388 727 1,779 -- 843 1,815
Loans taken up................. 2,262 51 655 2,978 93 33
Loans from credit
institutions................. 1,251 302 66 756 362 131
Deposits from reinsurers....... 37 38 147 16 60 111
Pensions....................... 1 -- -- 1 -- --
Taxation and social insurance
contributions................ 1,546 -- -- 885 -- --
Dividend....................... 965 -- -- 710 -- --
Other liabilities.............. 12,999 227 1,326 8,969 123 717
------ ----- ----- ------ ----- -----
19,480 2,800 9,756 14,391 2,335 6,946
====== ===== ===== ====== ===== =====

F-24
335

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The other liabilities include amounts due in respect of:

1996 1995
----- -----

Direct insurance........................................................ 1,481 2,501
Reinsurance............................................................. 1,014 925

Non-subordinated debenture loans, loans taken up and deposits of the
banking operations are included in Funds entrusted to and debt securities of the
banking operations and in Banks.

The Subordinated loans of Group companies relate to capital debentures and
private loans which are subordinated to all current and future liabilities of
ING Bank N.V., Postbank N.V. or Westland/Utrecht Hypotheekbank N.V. The average
interest rate on the subordinated loans is 6.8%.

The average interest rate of the Debenture loans when issued is 6.6% and
the debenture loans are repayable in the years 1997 to 2009. The loans are
denominated in various currencies. Some of the loans have been converted into
U.S. dollars by means of currency swaps; others have been converted into loans
with a variable interest-rate by means of interest-rate swaps. As at December
31, 1996, loans amounting to NLG 1,730 million had an average fixed interest
rate of 6.9%. The remaining NLG 1,164 million had an average variable interest
rate of 4.4%.

The average interest rate of the Loans taken up with fixed interest rates,
with a remaining principal amount of NLG 1,474 million, is 3.4%. The remaining
principal amount of NLG 1,494 million carries a variable interest rate of 5.5%
on average. These loans are repayable in the years 1997 to 2006. Loans totalling
NLG 1 million have been secured by mortgages.

The average interest rate of the Loans from credit institutions with fixed
interest rates, with a remaining principal of NLG 1,524 million, is 4%; the
remaining part of NLG 95 million carries a variable interest of 7% on an
average. Loans totalling NLG 196 million have been secured by mortgages.

Other liabilities include policyholders' premium deposits, rental deposits,
cash collateral and withholdings from mortgage loans, private loans and
professional loans.

2.16. ACCRUED LIABILITIES

1996 1995
------ -----

Accrued interest...................................................... 7,215 5,192
Costs payable......................................................... 5,077 2,938
Yield differences on fixed-interest investments....................... 1,643 927
------ -----
13,935 9,057
====== =====

2.17. ASSETS NOT AT FREE DISPOSAL

The assets not at free disposal, which consist primarily of
interest-bearing securities pledged to secure deposits from the Dutch Central
Bank and other banks, to secure margin accounts and for other purposes required
by law, include:

1996 1995
----- -----

Investments............................................................ 1,358 1,468
Lending................................................................ 9 23
Banks.................................................................. 8 58
Cash................................................................... -- 12
Other assets........................................................... 31 10
----- -----
1,406 1,571
===== =====

F-25
336

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

In connection with guarantees provided for certain liabilities included in
the balance sheet as well as off-balance-sheet contingent liabilities,
encumbered assets of the banking operations, amounting to NLG 1,161 million as
of December 31, 1996 (1995: NLG 998 million), are also included in the Assets
not at free disposal.

Analyzed as follows:

ENTRUSTED
FUNDS AND OTHER CONTINGENT
DEBT SECURITIES BANKS LIABILITIES LIABILITIES TOTAL
--------------- ----- ----------- ---------- -----

1996
Investments............................. 578 505 -- 30 1,113
Lending................................. -- 9 -- -- 9
Banks................................... -- 8 -- -- 8
Other assets............................ 3 6 1 21 31
--- --- ----- ----- -----
581 528 1 51 1,161
=== === ===== ===== =====
1995
Investments............................. 135 749 -- 11 895
Lending................................. -- -- -- 23 23
Banks................................... -- -- -- 58 58
Cash.................................... 7 -- -- 5 12
Other assets............................ -- -- 2 8 10
--- --- ----- ----- -----
142 749 2 105 998
=== === ===== ===== =====

2.18. COMMITMENTS NOT APPEARING IN THE BALANCE SHEET

1996 1995
------ ------

INSURANCE OPERATIONS
Investments in land and buildings..................................... 799 968
Commitments concerning fixed-interest securities...................... 2,704 2,695
Other................................................................. 237 175

BANKING OPERATIONS
Contingent liabilities in respect of:
-- discounted bills................................................. 204 63
-- guarantees....................................................... 9,373 8,202
-- irrevocable letters of credit.................................... 5,622 3,915
-- other............................................................ 1,831 937
------ ------
20,770 16,955
Irrevocable facilities................................................ 22,964 16,697
------ ------
43,734 33,652
====== ======

2.19. DERIVATIVES

Use is made of derivatives in various parts of the ING Group organization.
The following tables give numerical information about these derivatives
activities, detailing types of derivatives, credit risks, counterparties and use
of the derivatives transactions.

The table below illustrates the relative importance of the various types of
derivative products, showing the notional amounts at year-end 1996 and year-end
1995. Notional amounts represent units of

F-26
337

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

account which, in respect of derivatives, reflect the relationship with the
underlying assets (bonds, for example, in the case of interest-rate futures).
What they do not reflect, however, are the credit risks assumed by entering into
derivatives transactions.

The positive replacement cost represents the maximum loss that ING Group
would incur on its derivatives transactions if all its counterparties at
year-end defaulted. This replacement cost can and will fluctuate from day to day
due to changes in the value of the underlying assets. In order to arrive at an
estimate of credit risk at any given time, a margin is added to the replacement
cost figures to arrive, in accordance with internationally accepted criteria, at
what is called the unweighted lending equivalents. Finally, this table shows the
weighted lending equivalents. These are the unweighted lending equivalents
multiplied by the weighting factors determined in accordance with standards of
the international supervisory authorities.

As at year-end the following contracts were open:

1996 1995
------------------------------------- -------------------------------------
POSITIVE WEIGHTED POSITIVE WEIGHTED
NOTIONAL REPLACEMENT LENDING NOTIONAL REPLACEMENT LENDING
AMOUNT COST EQUIVALENT AMOUNT COST EQUIVALENT
-------- ----------- ---------- -------- ----------- ----------

INTEREST-RATE CONTRACTS
Over-the-counter:
-- swaps................. 285,715 7,332 1,993 241,855 6,067 1,617
-- forwards.............. 72,612 112 33 38,840 34 16
-- options............... 16,496 141 52 22,886 168 51
Listed:
-- options............... 5,332 33 8 488 -- --
-- futures............... 18,367 -- -- 18,578 2 --
CURRENCY CONTRACTS
Over-the-counter:
-- swaps................. 17,653 451 338 9,747 383 209
-- forwards.............. 140,872 2,036 876 112,747 1,007 410
-- options............... 11,090 71 34 5,153 59 32
-- other................. -- -- -- 916 16 15
Listed:
-- options............... 89 -- -- 2 -- --
-- futures............... 2,528 -- -- -- -- --
OTHER CONTRACTS
Over-the-counter........... 17,824 432 333 2,241 82 --
Listed..................... 4,315 77 28 146 2 --
-------- ----------- ---------- -------- ----------- ----------
592,893 10,685 3,695 453,599 7,820 2,350
======== ========== ======== ======== ========== ========

F-27
338

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The following table further subdivides the categories by the remaining term
of the underlying assets. The analysis by remaining term as of December 31, 1996
is as follows:

NOTIONAL AMOUNT
-------------------------------------------
FROM 1
UP TO TO 5 OVER
1 YEAR YEARS 5 YEARS TOTAL
------- --------- ------- --------

INTEREST-RATE CONTRACTS
Over-the-counter:
-- swaps............................................ 66,772 155,244 63,699 285,715
-- forwards......................................... 62,096 10,237 279 72,612
-- options.......................................... 9,900 4,485 2,111 16,496
Listed:
-- options.......................................... 895 4,437 -- 5,332
-- futures.......................................... 8,469 9,898 -- 18,367
CURRENCY CONTRACTS
Over-the-counter:
-- swaps............................................ 2,695 8,923 6,035 17,653
-- forwards......................................... 139,522 1,324 26 140,872
-- options.......................................... 10,796 294 -- 11,090
Listed:
-- options.......................................... 89 -- -- 89
-- futures.......................................... 2,521 -- 7 2,528
OTHER CONTRACTS
Over-the-counter...................................... 14,734 2,760 330 17,824
Listed................................................ 4,238 77 -- 4,315
------- --------- ------- --------
322,727 197,679 72,487 592,893
======== ======== ====== ========

The following two tables describe the types of counterparties with which
ING Group enters into derivatives contracts and what purpose derivatives have
within ING Group. Trading refers to derivatives transactions on behalf of
customers as well as to proprietary dealing. Asset and Liability Management
refers to derivatives transactions for risk control purposes in the normal
course of banking and insurance business.

Analysis by counterparty:

1996 1995
------------------------------------ ------------------------------------
UNWEIGHTED WEIGHTED UNWEIGHTED WEIGHTED
NOTIONAL LENDING LENDING NOTIONAL LENDING LENDING
AMOUNT EQUIVALENT EQUIVALENT AMOUNT EQUIVALENT EQUIVALENT
-------- ---------- ---------- -------- ---------- ----------

Public sector.............. 1,689 233 -- 2,294 47 --
Banks...................... 498,604 12,782 2,612 384,938 8,949 1,791
Other...................... 92,600 2,168 1,083 66,367 1,114 559
-------- ---------- ---------- -------- ---------- ----------
592,893 15,183 3,695 453,599 10,110 2,350
======== ========= ======== ======== ========= ========

F-28
339

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Analysis by use:

1996 1995
-------------------------------- --------------------------------
ASSET & ASSET &
LIABILITY LIABILITY
TRADING MANAGEMENT TOTAL TRADING MANAGEMENT TOTAL
------- ---------- ------- ------- ---------- -------

Interest-rate contracts... 246,028 152,494 398,522 172,861 149,786 322,647
Currency contracts........ 40,248 131,984 172,232 34,649 93,916 128,565
Other contracts........... 19,376 2,763 22,139 2,352 35 2,387
------- ---------- ------- ------- ---------- -------
305,652 287,241 592,893 209,862 243,737 453,599
======== ========== ======== ======== ========== ========

F-29
340

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

3. NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

3.1. INCOME

INSURANCE OPERATIONS BANKING OPERATIONS ELIMINATIONS TOTAL
------------------------ ---------------------- ------------------ ------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994 1996 1995 1994
------ ------ ------ ------ ----- ----- ---- ---- ---- ------ ------ ------

Premium income........... 24,322 21,511 20,377 -- -- -- -- -- -- 24,322 21,511 20,377
Income from investments
of the insurance
operations............. 11,073 9,605 8,202 -- -- -- 141 138 137 10,932 9,467 8,065
Interest from banking
operations............. -- -- -- 7,251 6,258 6,288 (109) (104) (94) 7,360 6,362 6,382
Commission............... 248 195 171 2,647 1,980 1,368 -- -- -- 2,895 2,175 1,539
Other income............. 224 169 174 1,818 1,519 511 -- -- -- 2,042 1,688 685
------ ------ ------ ----- ----- ----- ---- ---- ---- ------ ------ ------
35,867 31,480 28,924 11,716 9,757 8,167 32 34 43 47,551 41,203 37,048
====== ====== ====== ===== ===== ===== ==== ==== ==== ====== ====== ======

3.1.1. PREMIUM INCOME

Premium income has been included before deduction of reinsurance and
retrocession premiums granted.

3.1.2. INCOME FROM INVESTMENTS OF THE INSURANCE OPERATIONS

This item includes interest received, income from financial instruments to
the extent that these serve to limit interest-rate risks, rental, leasing and
dividend income from investments, optional stock dividends to the amount of the
optional cash dividend, and amounts released from yield differences. This item
also includes income from investments for the risk of policyholders and from
investments of annual life funds as well as income from participating interests.

3.1.3. INTEREST FROM BANKING OPERATIONS

This item includes the interest income and interest charges (net), results
from interest-rate arbitrage, results from financial instruments to the extent
that these serve to limit interest-rate risk, and lending commission.

3.1.4. COMMISSION

INSURANCE
OPERATIONS BANKING OPERATIONS TOTAL
------------------- ------------------------- -------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
--- --- --- ----- ----- ----- ----- ----- -----

Funds transfer... -- -- -- 667 642 601 667 642 601
Securities
business....... -- -- -- 736 481 346 736 481 346
Insurance
broking........ 102 81 82 105 93 86 207 174 168
Other............ 146 114 89 1,139 764 335 1,285 878 424
----- ----- ----- ------ ----- ----- ----- ----- ----
248 195 171 2,647 1,980 1,368 2,895 2,175 1,539
====== ====== ====== ====== ===== ===== ===== ===== ====

Commission includes fees for services rendered, such as commission on
foreign currency transactions and insurance broking and funds transfer charges.
In 1996, the banking operations received NLG 3,376 million (1995: NLG 2,392
million; 1994: NLG 1,840 million) and paid NLG 729 million (1995: NLG 412
million; 1994: NLG 472 million) in commission.

F-30
341

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

3.1.5. OTHER INCOME

INSURANCE OPERATIONS BANKING OPERATIONS TOTAL
-------------------- ---------------------- ----------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
---- ---- ---- ----- ----- ---- ----- ----- ----

Income relating to
securities and
participations............ 80 45 16 132 109 106 212 154 122
Result from financial
transactions.............. 41 32 60 1,230 977 37 1,271 1,009 97
Other....................... 103 92 98 456 433 368 559 525 466
--- --- --- ----- ----- ----- ---- ---- ---
224 169 174 1,818 1,519 511 2,042 1,688 685
=== === === ===== ===== ===== ==== ==== ===

The Result from financial transactions includes results from exchange rate
differences and stock price fluctuations in the securities trading portfolio, as
well as valuation differences on equity participations. Also included in this
item are exchange rate differences in connection with holding assets and
liabilities in foreign currencies, the results of the associated forward
contracts and the results from financial instruments other than those serving to
limit interest-rate risks. Asset trading results are also included in this item.

Analysis of the Result from financial transactions:

INSURANCE OPERATIONS BANKING OPERATIONS TOTAL
-------------------- --------------------- ----------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
---- ---- ---- ----- ---- ---- ----- ----- ----

Result from securities
trading portfolio........ 8 1 41 881 513 131 889 514 172
Result from currency
trading portfolio........ -- -- -- 109 189 51 109 189 51
Other results.............. 33 31 19 240 275 (145) 273 306 (126)
--- --- --- ----- ----- ----- ---- ---- ---
41 32 60 1,230 977 37 1,271 1,009 97
=== === === ===== ===== ===== ==== ==== ===

Included in Other results presented above is an aggregate gain (loss) on
foreign currency translation amounting to NLG 32 million in 1996 (1995: NLG 37
million; 1994: NLG (25) million).

3.1.6. GEOGRAPHIC DISTRIBUTION OF INCOME

INSURANCE OPERATIONS BANKING OPERATIONS ELIMINATIONS TOTAL
--------------------------- --------------------------- --------------------------- ---------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994 1996 1995 1994
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------

The
Netherlands. 18,397 16,897 14,942 7,759 6,876 6,431 31 23 36 26,125 23,750 21,337
Rest of
Europe... 2,927 2,564 2,155 2,350 1,667 540 -- 8 5 5,277 4,223 2,690
North
America... 9,661 8,397 8,246 705 539 335 -- -- -- 10,366 8,936 8,581
South
America... 179 170 175 519 342 647 -- -- -- 698 512 822
Asia....... 1,742 1,529 1,254 355 310 212 1 -- -- 2,096 1,839 1,466
Australia... 2,912 1,879 2,200 27 23 2 -- 1 -- 2,939 1,901 2,202
Other...... 344 342 300 1 -- -- -- 2 2 345 340 298
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
36,162 31,778 29,272 11,716 9,757 8,167 32 34 43 47,846 41,501 37,396
Income
between
geographic
areas(1)... (295) (298) (348) -- -- -- -- -- -- (295) (298) (348)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
35,867 31,480 28,924 11,716 9,757 8,167 32 34 43 47,551 41,203 37,048
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======

- ---------------

(1) Mainly relates to reinsurance premiums ceded between Group companies in
various geographic areas

F-31
342

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

3.1.7. GEOGRAPHIC DISTRIBUTION OF INCOME FROM THE INSURANCE OPERATIONS

INVESTMENT INCOME(1)
LIFE PREMIUMS NON-LIFE PREMIUMS TOTAL
------------------------ ---------------------- ----------------------- ------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994 1996 1995 1994
------ ------ ------ ------ ----- ----- ------ ------ ----- ------ ------ ------

The Netherlands..... 7,860 7,458 6,312 2,845 2,651 2,578 7,692 6,788 6,052 18,397 16,897 14,942
Rest of Europe...... 1,748 1,490 1,217 450 426 410 729 648 528 2,927 2,564 2,155
North America....... 4,586 3,798 4,089 3,078 2,846 2,651 1,997 1,753 1,506 9,661 8,397 8,246
South America....... 52 54 49 87 79 88 40 37 38 179 170 175
Asia................ 1,446 1,284 1,043 123 101 96 173 144 115 1,742 1,529 1,254
Australia........... 1,442 759 1,263 570 516 538 900 604 399 2,912 1,879 2,200
Other............... 5 4 7 260 278 302 79 60 (9) 344 342 300
------ ------ ------ ----- ----- ----- ------ ------ ----- ------ ------ ------
17,139 14,847 13,980 7,413 6,897 6,663 11,610 10,034 8,629 36,162 31,778 29,272
Income between
geographic
areas............. (4) (3) (6) (226) (230) (260) (65) (65) (82) (295) (298) (348)
------ ------ ------ ----- ----- ----- ------ ------ ----- ------ ------ ------
17,135 14,844 13,974 7,187 6,667 6,403 11,545 9,969 8,547 35,867 31,480 28,924
====== ====== ====== ===== ===== ===== ====== ====== ===== ====== ====== ======

- ---------------

(1) Including commission and other income.

3.2. EXPENDITURE

INSURANCE OPERATIONS BANKING OPERATIONS ELIMINATIONS TOTAL
------------------------ --------------------- --------------------- ------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994 1996 1995 1994
------ ------ ------ ----- ----- ----- ----- ----- ----- ------ ------ ------

Underwriting 26,890 23,394 21,454 -- -- -- -- -- -- 26,890 23,394 21,454
expenditure..........
Other interest 902 991 944 32 32 32 32 34 43 902 989 933
expense..............
Salaries and charges 2,034 1,856 1,789 4,319 3,516 2,736 -- -- -- 6,353 5,372 4,525
for pensions and
social security......
Value adjustments to -- -- -- 1,130 1,090 1,035 -- -- -- 1,130 1,090 1,035
receivables of the
banking operations...
Other expenditure...... 3,543 3,133 2,903 4,102 3,367 2,855 -- -- -- 7,645 6,500 5,758
------ ------ ------ ----- ----- ------ ----- ----- ----- ------ ------ ------
- - - - - -
33,369 29,374 27,090 9,583 8,005 6,658 32 34 43 42,920 37,345 33,705
====== ====== ====== ===== ==== ===== ===== ===== ==== ====== ====== ======

3.2.1. UNDERWRITING EXPENDITURE

Underwriting expenditure includes reinsurance premiums, retrocession
premiums, additions to insurance provisions, benefits, surrenders, claims
(including claims handling expenses) and profit sharing by life policyholders.

3.2.2. OTHER INTEREST EXPENSE

This includes, among other items, the interest on the subordinated
debenture loan issued by ING Groep N.V. in 1991, due March 15, 2001.

F-32
343

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

3.2.3. SALARIES AND CHARGES FOR PENSIONS AND SOCIAL SECURITY

INSURANCE OPERATIONS BANKING OPERATIONS TOTAL
------------------------- ------------------------- -------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
----- ----- ----- ----- ----- ----- ----- ----- -----

Salaries......... 1,465 1,317 1,288 3,034 2,530 1,976 4,499 3,847 3,264
Pension and early 119 171 171 229 171 149 348 342 320
retirement
charges........
Social security 194 147 157 255 183 136 449 330 293
charges........
Other staff 256 221 173 801 632 475 1,057 853 648
costs..........
------ ------ ------ ------ ------ ------ ------ ------ ------
2,034 1,856 1,789 4,319 3,516 2,736 6,353 5,372 4,525
====== ====== ====== ====== ====== ====== ====== ====== ======

3.2.4. VALUE ADJUSTMENTS TO RECEIVABLES OF THE BANKING OPERATIONS

Value adjustments to receivables of the banking operations relate to both
the addition to the Provision for loan losses and the addition to the Provision
for general banking risks (See also Note 7.1, paragraph r.)

3.2.5. OTHER EXPENDITURE

Other expenditure includes accommodation costs, goods and services supplied
by third parties, depreciation on tangible fixed assets, insurance commission
and other general expenses. Also included in this item are the fees paid to
Postkantoren B.V. for post office counter services and mail transport and the
fees paid to postal services abroad for cashing Postcheques. Depreciation on
tangible fixed assets included in Other expenditure amounted to NLG 678 million
in 1996 (1995: NLG 472 million; 1994: NLG 512 million).

3.3. STAFF

Average number of staff employed on the basis of full-time equivalents:

INSURANCE OPERATIONS BANKING OPERATIONS TOTAL
------------------------ ------------------------ ------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
------ ------ ------ ------ ------ ------ ------ ------ ------

The Netherlands... 9,483 9,410 8,991 19,929 19,213 19,944 29,412 28,623 28,935
Rest of Europe.... 5,263 3,977 3,838 7,917 4,790 1,859 13,180 8,767 5,697
North America..... 8,036 8,061 7,623 1,200 1,213 594 9,236 9,274 8,217
South America..... 304 250 359 1,081 1,007 781 1,385 1,257 1,140
Asia.............. 937 868 791 1,969 1,720 618 2,906 2,588 1,409
Australia......... 1,830 1,543 1,555 81 72 2 1,911 1,615 1,557
Other............. 17 20 19 59 -- 1 76 20 20
------ ------ ------ ------ ------ ------ ------ ------ ------
25,870 24,129 23,176 32,236 28,015 23,799 58,106 52,144 46,975
====== ====== ====== ====== ====== ====== ====== ====== ======

In addition, the average number of staff employed by the joint ventures
included in the consolidated accounts was 356 in 1996 (1995: 281; 1994: 275).

F-33
344

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

3.4. RESULT BEFORE TAXATION AND NET PROFIT

INSURANCE OPERATIONS BANKING OPERATIONS TOTAL(1)
------------------------ ------------------------ ------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
------ ------ ------ ------ ------ ------ ------ ------ ------

Result before 2,498 2,106 1,834 2,133 1,752 1,509 4,559 3,800 3,292
taxation........
Taxation.......... 613 582 518 590 556 476 1,203 1,138 994
Third-party 1 (3) 2 34 16 (6) 35 13 (4)
interests.......
----- ----- ----- ----- ----- ----- ----- ----- -----
NET PROFIT........ 1,884 1,527 1,314 1,509 1,180 1,039 3,321 2,649 2,302
===== ===== ===== ===== ===== ===== ===== ===== =====

- ---------------
(1) After deduction of dividend on own shares of NLG 72 million in 1996, NLG 58
million in 1995 and NLG 51 million in 1994.

3.4.1. GEOGRAPHIC DISTRIBUTION OF THE RESULT BEFORE TAXATION

INSURANCE OPERATIONS BANKING OPERATIONS TOTAL
--------------------- --------------------- ---------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
----- ----- ----- ----- ----- ----- ----- ----- -----

The Netherlands......... 1,620 1,386 1,181 2,334 2,083 1,829 3,954 3,469 3,010
Rest of Europe.......... 164 146 69 309 256 49 473 402 118
North America........... 491 490 367 162 170 94 653 660 461
South America........... 20 (61) (7) 286 156 485 306 95 478
Asia.................... 92 61 77 173 165 86 265 226 163
Australia............... 92 61 122 5 12 1 97 73 123
Other................... 19 23 25 (6) -- -- 13 23 25
----- ----- ----- ----- ----- ----- ----- ----- -----
2,498 2,106 1,834 3,263 2,842 2,544 5,761 4,948 4,378
----- ----- ----- ----- ----- ----- ----- ----- -----
Value adjustments to
receivables of the
banking operations.... -- -- -- 1,130 1,090 1,035 1,130 1,090 1,035
----- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL................... 2,498 2,106 1,834 2,133 1,752 1,509 4,631 3,858 3,343
===== ===== ===== ===== ===== ===== ===== ===== =====
Less: dividend on own
shares................ 72 58 51
----- ----- -----
RESULT BEFORE
TAXATION.............. 4,559 3,800 3,292
===== ===== =====

3.4.2. GEOGRAPHIC DISTRIBUTION OF THE RESULT BEFORE TAXATION FROM THE INSURANCE
OPERATIONS

LIFE NON-LIFE GENERAL(1) TOTAL
-------------------- ------------------ ------------------ ---------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994 1996 1995 1994
----- ----- ---- ---- ---- ---- ---- ---- ---- ----- ----- -----

The
Netherlands.. 919 819 689 200 188 146 501 379 346 1,620 1,386 1,181
Rest of
Europe... 35 23 (3) 32 35 12 97 88 60 164 146 69
North
America.. 178 192 174 106 114 7 207 184 186 491 490 367
South
America.. 2 (1) 3 1 (59) 1 17 (1) (11) 20 (61) (7)
Asia....... 52 38 53 22 6 6 18 17 18 92 61 77
Australia... 22 21 34 15 (10) 41 55 50 47 92 61 122
Other...... (1) 5 3 61 65 82 (41) (47) (60) 19 23 25
---- --- --- --- --- --- --- --- --- ---- ---- ----
1,207 1,097 953 437 339 295 854 670 586 2,498 2,106 1,834
==== === === === === === === === === ==== ==== ====

- ---------------

(1) General refers to results from insurance holding companies and results from
non-insurance holding companies included within ING Insurance, and income
from investments representing shareholders' equity of the insurance
companies.

F-34
345

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4. RESULTS FROM THE INSURANCE OPERATIONS

Notes 4.1 through 4.13 contain a more detailed explanation of the insurance
results on the basis of the statutory formats and analyses applicable to these
activities. As a result, the figures are not always reconcilable with those in
ING Groep N.V.'s consolidated profit and loss account and related notes.

4.1. NON-TECHNICAL ACCOUNT

1996 1995 1994
------ ------ ------

Result from life underwriting account...................... 1,207 1,097 953
Result from non-life underwriting account.................. 437 339 295
------ ------ ------
1,644 1,436 1,248
Income from investments.................................... 11,134 9,638 8,205
Investment expenditure..................................... 1,612 1,551 1,544
Allocated income from investments transferred to
underwriting accounts.................................... (9,014) (7,680) (6,347)
Other income............................................... 351 282 276
Other expenditure.......................................... 5 19 4
------ ------ ------
RESULT BEFORE TAXATION..................................... 2,498 2,106 1,834
Taxation................................................... 613 582 518
------ ------ ------
RESULT AFTER TAXATION...................................... 1,885 1,524 1,316
Third-party interests...................................... 1 (3) 2
------ ------ ------
NET PROFIT................................................. 1,884 1,527 1,314
====== ====== ======

4.2. LIFE UNDERWRITING ACCOUNT

1996 1995 1994
------ ------- -------

Premiums for own account:
-- gross premiums...................................... 17,135 14,844 13,974
-- outward reinsurance premiums........................ 499 526 322
----- ----- -----
16,636 14,318 13,652
Allocated income from investments........................ 8,322 7,042 5,734
Other underwriting income for own account................ 56 43 59
----- ----- -----
Total income............................................. 25,014 21,403 19,445
Benefits for own account:
-- gross............................................... 8,595 7,419 6,905
-- reinsurers' share................................... 197 344 274
----- ----- -----
8,398 7,075 6,631
Changes in other insurance provisions for own account
Provision for life policy liabilities:
-- gross............................................... 10,450 9,049 8,272
-- reinsurers' share................................... 186 208 85
----- ----- -----
10,264 8,841 8,187
Profit sharing and rebates............................... 2,544 2,070 1,531
Operating expenses....................................... 2,591 2,315 2,135
Other insurance expenditure for own account.............. 10 5 8
----- ----- -----
RESULT FROM LIFE UNDERWRITING ACCOUNT.................... 1,207 1,097 953
===== ===== =====

F-35
346

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4.3. ANALYSIS OF THE LIFE UNDERWRITING ACCOUNT

GROSS REINSURERS' SHARE TOTAL FOR OWN ACCOUNT
------------------------ ----------------- ------------------------
1996 1995 1994 1996 1995 1994 1996 1995 1994
------ ------ ------ --- ---- ---- ------ ------ ------

Premiums................ 17,135 14,844 13,974 499 526 322 16,636 14,318 13,652
Other underwriting
income................ 56 43 59 -- -- -- 56 43 59
Benefits................ 8,595 7,419 6,905 197 344 274 8,398 7,075 6,631
Changes in other
insurance
provisions............ 10,450 9,049 8,272 186 208 85 10,264 8,841 8,187
Profit sharing and
rebates............... 2,615 2,185 1,628 71 115 97 2,544 2,070 1,531
Operating expenses...... 2,623 2,337 2,141 32 22 6 2,591 2,315 2,135
Other underwriting
expenditure........... 10 5 8 -- -- -- 10 5 8
------ ------ ------ --- ---- ---- ------ ------ ------
UNDERWRITING RESULT..... (7,102) (6,108) (4,921) 13 (163) (140) (7,115) (5,945) (4,781)
Allocated income from
investments........... 8,322 7,042 5,734 -- -- -- 8,322 7,042 5,734
------ ------ ------ --- ---- ---- ------ ------ ------
RESULT FROM LIFE
UNDERWRITING ACCOUNT.. 1,220 934 813 13 (163) (140) 1,207 1,097 953
====== ====== ====== === ==== ==== ====== ====== ======

4.4. ANALYSIS OF PROFIT SHARING AND REBATES

1996 1995 1994
----- ----- -----

Distributions on account of interest or underwriting
results.............................................. 1,832 1,411 906
Bonuses added to policies.............................. 712 659 625
----- ----- -----
2,544 2,070 1,531
===== ===== =====

4.5. ANALYSIS OF LIFE PREMIUMS

1996 1995 1994
----------------------- ----------------------- -----------------------
REINS. OWN REINS. OWN REINS. OWN
GROSS SHARE ACCOUNT GROSS SHARE ACCOUNT GROSS SHARE ACCOUNT
------ ----- ------ ------ ----- ------ ------ ----- ------

Policies where the
insurer bears the
investment risk..... 13,609 2,561 11,048 12,094 2,393 9,701 11,253 2,968 8,285
Policies where the
policyholder bears
the investment
risk................ 3,124 51 3,073 2,275 198 2,077 2,443 54 2,389
------ ----- ------ ------ ----- ------ ------ ----- ------
Total direct
business............ 16,733 2,612 14,121 14,369 2,591 11,778 13,696 3,022 10,674
Indirect business..... 2,648 133 2,515 2,643 103 2,540 3,115 137 2,978
------ ----- ------ ------ ----- ------ ------ ----- ------
19,381 2,745 16,636 17,012 2,694 14,318 16,811 3,159 13,652
Eliminations.......... 2,246 2,246 -- 2,168 2,168 -- 2,837 2,837 --
------ ----- ------ ------ ----- ------ ------ ----- ------
TOTAL....... 17,135 499 16,636 14,844 526 14,318 13,974 322 13,652
====== ===== ====== ====== ===== ====== ====== ===== ======

F-36
347

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4.6. PREMIUMS FROM DIRECT LIFE BUSINESS

POLICIES WHERE THE
POLICIES WHERE THE INSURER POLICYHOLDER
BEARS THE INVESTMENT RISK BEARS THE INVESTMENT RISK
--------------------------- ----------------------------
REINS. OWN REINS. OWN
1996 GROSS SHARE ACCOUNT GROSS SHARE ACCOUNT
- ------------------------------------ ------ ----- ------ ----- ------ -------

Periodic premiums:
Individual policies
-- without profits................ 3,696 456 3,240 496 -- 496
-- with profits................... 3,104 578 2,526 -- -- --
--
------ ----- ------ ----- --- -----
TOTAL............................... 6,800 1,034 5,766 496 -- 496
Group
-- without profits................ 232 32 200 974 40 934
-- with profits................... 1,142 43 1,099 -- -- --
--
------ ----- ------ ----- --- -----
TOTAL............................... 1,374 75 1,299 974 40 934
TOTAL PERIODIC PREMIUMS............. 8,174 1,109 7,065 1,470 40 1,430
====== ===== ====== ===== == =====
Single premiums:
Individual policies
-- without profits................ 1,795 1,213 582 525 -- 525
-- with profits................... 2,223 145 2,078 -- -- --
--
------ ----- ------ ----- --- -----
TOTAL............................... 4,018 1,358 2,660 525 -- 525
Group
-- without profits................ 688 84 604 1,129 11 1,118
-- with profits................... 729 10 719 -- -- --
--
------ ----- ------ ----- --- -----
TOTAL............................... 1,417 94 1,323 1,129 11 1,118
TOTAL SINGLE PREMIUMS............... 5,435 1,452 3,983 1,654 11 1,643
====== ===== ====== ===== == =====
TOTAL LIFE BUSINESS PREMIUMS........ 13,609 2,561 11,048 3,124 51 3,073
====== ===== ====== ===== == =====

The life business total single premiums include NLG 892 million in 1996
from profit sharing.

F-37
348

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

POLICIES WHERE THE POLICIES WHERE THE
INSURER POLICYHOLDER
BEARS THE INVESTMENT BEARS THE INVESTMENT
RISK RISK
----------------------- ---------------------
REINS. OWN REINS. OWN
1995 GROSS SHARE ACCOUNT GROSS SHARE ACCOUNT
- ----------------------------------------------- ------ ----- ------ ----- ----- -------

Periodic premiums
Individual policies
-- without profits........................... 4,484 710 3,774 480 139 341
-- with profits.............................. 1,560 457 1,103 -- -- --
------ ----- ------ ----- ---- ------
TOTAL.......................................... 6,044 1,167 4,877 480 139 341
Group
-- without profits........................... 178 15 163 913 37 876
-- with profits.............................. 1,299 96 1,203 -- -- --
------ ----- ------ ----- ---- ------
TOTAL.......................................... 1,477 111 1,366 913 37 876
TOTAL PERIODIC PREMIUMS........................ 7,521 1,278 6,243 1,393 176 1,217
====== ===== ====== ===== ==== ======
Single premiums:
Individual policies
-- without profits........................... 3,100 937 2,163 217 4 213
-- with profits.............................. 469 118 351 -- -- --
------ ----- ------ ----- ---- ------
TOTAL.......................................... 3,569 1,055 2,514 217 4 213
Group
-- without profits........................... 508 40 468 665 18 647
-- with profits.............................. 496 20 476 -- -- --
------ ----- ------ ----- ---- ------
TOTAL.......................................... 1,004 60 944 665 18 647
TOTAL SINGLE PREMIUMS.......................... 4,573 1,115 3,458 882 22 860
====== ===== ====== ===== ==== ======
TOTAL LIFE BUSINESS PREMIUMS................... 12,094 2,393 9,701 2,275 198 2,077
====== ===== ====== ===== ==== ======

The life business total single premiums include NLG 913 million in 1995
from profit sharing.

F-38
349

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

POLICIES WHERE THE
POLICIES WHERE THE INSURER POLICYHOLDER
BEARS THE INVESTMENT RISK BEARS THE INVESTMENT RISK
----------------------------- -----------------------------
REINS. OWN REINS. OWN
1994 GROSS SHARE ACCOUNT GROSS SHARE ACCOUNT
- ------------------------------ ------ ------ ------- ------ ------ -------

Periodic premiums:
Individual policies
-- without profits.......... 4,151 1,083 3,068 160 -- 160
-- with profits............. 1,293 376 917 -- -- --
------ ----- ----- ----- ----- -----
TOTAL......................... 5,444 1,459 3,985 160 -- 160
Group
-- without profits.......... 206 13 193 777 47 730
-- with profits............. 1,329 88 1,241 -- -- --
------ ----- ----- ----- ----- -----
TOTAL......................... 1,535 101 1,434 777 47 730
TOTAL PERIODIC PREMIUMS....... 6,979 1,560 5,419 937 47 890
====== ===== ===== ===== ===== =====
Single premiums:
Individual policies
-- without profits.......... 2,672 1,202 1,470 469 -- 469
-- with profits............. 335 113 222 -- -- --
------ ----- ----- ----- ----- -----
TOTAL......................... 3,007 1,315 1,692 469 -- 469
Group
-- without profits.......... 654 77 577 1,037 7 1,030
-- with profits............. 613 16 597 -- -- --
------ ----- ----- ----- ----- -----
TOTAL......................... 1,267 93 1,174 1,037 7 1,030
TOTAL SINGLE PREMIUMS......... 4,274 1,408 2,866 1,506 7 1,499
====== ===== ===== ===== ===== =====
TOTAL LIFE BUSINESS
PREMIUMS.................... 11,253 2,968 8,285 2,443 54 2,389
====== ===== ===== ===== ===== =====

The life business total single premiums include NLG 610 million in 1994
from profit sharing.

F-39
350

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4.7. NON-LIFE UNDERWRITING ACCOUNT

1996 1995 1994
----- ----- -----

Premiums written for own account:
-- gross premiums............................................ 7,187 6,667 6,403
-- outward reinsurance premiums.............................. 583 566 487
----- ----- -----
6,604 6,101 5,916
Changes in provision for unearned premiums and unexpired
non-life underwriting risks:
-- gross..................................................... (159) (104) (125)
-- reinsurers' share......................................... 16 28 (27)
----- ----- -----
(175) (132) (98)
----- ----- -----
Premiums earned for own account:............................... 6,429 5,969 5,818

Allocated income from investments.............................. 692 638 613
Other underwriting income for own account...................... 3 6 7
----- ----- -----
Total income................................................... 7,124 6,613 6,438

Claims for own account:
claims paid:
-- gross..................................................... 4,449 3,989 3,884
-- reinsurers' share......................................... 351 321 268
----- ----- -----
4,098 3,668 3,616
changes in the claims provision:
-- gross..................................................... 287 541 582
-- reinsurers' share......................................... (42) 25 (1)
----- ----- -----
329 516 583
----- ----- -----
Total claims incurred.......................................... 4,427 4,184 4,199

Operating expenses............................................. 2,257 2,083 1,941
Other insurance expenditure for own account.................... 3 7 3
----- ----- -----
RESULT FROM NON-LIFE UNDERWRITING ACCOUNT...................... 437 339 295
===== ===== =====

F-40
351

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4.8. ANALYSIS OF THE NON-LIFE INSURANCE UNDERWRITING ACCOUNT BY CLASS OF
BUSINESS

The tables presented below do not include allocated income from investments
or other underwriting income and expenditure.

NET
GROSS GROSS GROSS REINSURANCE
PREMIUMS PREMIUMS CLAIMS OPERATING INCOME/
WRITTEN EARNED EXPENDITURE EXPENDITURE EXPENDITURE RESULT
-------- -------- ----------- ----------- ----------- ------

1996
Health........................... 782 776 618 209 (9) (23)
Accident(1)...................... 1,075 1,052 678 320 -- 215
Third-party liability motor...... 1,192 1,137 857 358 (18) 59
Other motor...................... 1,086 1,039 705 309 (4) 72
Marine and aviation.............. 134 133 68 46 (11) 22
Fire and other property losses... 2,034 2,006 1,236 788 (82) (3)
General liability................ 559 558 420 225 9 11
Credit and suretyship............ 47 46 6 27 (9) 6
Legal assistance................. 30 29 21 13 -- (4)
Miscellaneous financial losses... 64 63 24 33 (9) (1)
Indirect business................ 184 190 104 107 21 83
------- ------- ------ ----- ------ -----
7,187 7,029 4,737 2,435 (112) 437
======= ======= ====== ===== ====== =====

NET
GROSS GROSS GROSS REINSURANCE
PREMIUMS PREMIUMS CLAIMS OPERATING INCOME/
WRITTEN EARNED EXPENDITURE EXPENDITURE EXPENDITURE RESULT
-------- -------- ----------- ----------- ----------- ------

1995
Health........................... 737 727 520 174 (54) 15
Accident(1)...................... 937 933 592 284 (21) 192
Third-party liability motor...... 1,082 1,060 926 310 3 (36)
Other motor...................... 985 953 671 270 (6) 48
Marine and aviation.............. 135 133 66 51 (6) 26
Fire and other property losses... 1,925 1,896 1,168 757 (31) 26
General liability................ 533 529 403 207 (10) (21)
Credit and suretyship............ 42 41 17 25 (2) (1)
Legal assistance................. 30 29 19 11 (1) (1)
Miscellaneous financial losses... 59 58 24 27 (6) 11
Indirect business................ 202 204 124 66 (15) 80
----- ----- ----- ----- --- ----
6,667 6,563 4,530 2,182 (149) 339
===== ===== ===== ===== === ====

- ---------------
(1) Includes disability insurance products.

F-41
352

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4.8. ANALYSIS OF THE NON-LIFE INSURANCE UNDERWRITING ACCOUNT BY CLASS OF
BUSINESS -- (CONTINUED)

NET
GROSS GROSS GROSS REINSURANCE
PREMIUMS PREMIUMS CLAIMS OPERATING INCOME/
WRITTEN EARNED EXPENDITURE EXPENDITURE EXPENDITURE RESULT
-------- -------- ----------- ----------- ------------ ------

1994
Health................................ 701 694 546 163 (30) (8)
Accident(1)........................... 964 955 655 282 (2) 159
Third-party liability motor........... 1,048 1,037 896 305 1 (32)
Other motor........................... 853 834 609 237 (4) 19
Marine and aviation................... 137 137 80 49 (4) 23
Fire and other property losses........ 1,825 1,782 1,062 664 (40) 105
General liability..................... 532 518 378 200 (26) (14)
Credit and suretyship................. 42 41 13 26 (4) (1)
Legal assistance...................... 26 25 15 9 (2) 0
Miscellaneous financial losses........ 63 63 34 27 (3) 2
Indirect business..................... 212 192 178 92 34 42
----- ----- ----- ----- --- ----
6,403 6,278 4,466 2,054 (80) 295
===== ===== ===== ===== === ====

- ---------------

(1) Includes disability insurance products.

4.9. OPERATING EXPENDITURE

LIFE NON-LIFE
--------------------- ---------------------
1996 1995 1994 1996 1995 1994
----- ----- ----- ----- ----- -----

New business acquisition costs................... 2,152 1,974 1,799 1,699 1,605 1,544
Deferred acquisition costs....................... (516) (486) (408) 9 (11) 20
----- ----- ----- ----- ----- -----
1,636 1,488 1,391 1,708 1,594 1,564
Administrative and staff costs, depreciation of
business equipment............................. 987 849 750 727 588 490
Commission and profit-sharing amounts received
from reinsurers................................ 32 22 6 178 99 113
----- ----- ----- ----- ----- -----
2,591 2,315 2,135 2,257 2,083 1,941
===== ===== ===== ===== ===== =====

Operating expenditure includes an amount of NLG 2,756 million (1995: NLG
2,515 million; 1994: NLG 1,940 million) in respect of commission paid and
payable. Amortization of deferred acquisition costs was NLG 567 million in 1996
(1995: NLG 554 million; 1994: NLG 424 million).

4.10. INCOME FROM INVESTMENTS

F-42
353

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Income from investments is attributable to:

1996 1995 1994
------ ----- -----

Results from participating interests....................... 55 33 3
Income from land and buildings............................. 803 788 762
Income from other investments.............................. 7,961 6,969 6,629
Income from investments for risk of policyholders and from
investments of annual life funds......................... 2,315 1,848 811
----- ----- -----
11,134 9,638 8,205
===== ===== =====

Income from land and buildings includes the following amounts in respect of
allocated rental income (the same amounts are included in operating
expenditure):

1996 1995 1994
------ ----- -----

116 93 109
===== ===== =====

Analysis of income from investments:

1996 1995 1994
------ ----- -----

Results from participating interests......................... 55 33 3
ING Group.................................................... 73 58 51
Group companies.............................................. 146 138 137
Third parties................................................ 10,860 9,409 8,014
----- ----- -----
11,134 9,638 8,205
===== ===== =====

4.11. INVESTMENT EXPENDITURE

1996 1995 1994
------ ----- -----

Administrative expenses and interest charges................. 1,590 1,547 1,521
Value adjustments to investments............................. 22 4 23
----- ----- -----
1,612 1,551 1,544
===== ===== =====

4.12. ALLOCATED INCOME FROM INVESTMENTS AND TRANSFERS TO UNDERWRITING ACCOUNTS

Shareholders' equity of the Group's insurance companies is deemed to be
invested in land and buildings, shares and subsidiaries to the extent that they
do not exceed the amount of average shareholders' equity. The associated
investment income is retained in the non-technical account together with the
results of insurance holding companies and non-insurance companies included
within ING Insurance. The remaining income from investments of the Group's life
and non-life insurance companies is allocated to such companies on a legal
entity basis, and, in the case of companies conducting both life and non-life
operations, is allocated to such operations pro rata based on the average
insurance provisions held by each.

F-43
354

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4.13. OTHER INCOME

1996 1995 1994
----- ----- -----

Commission..................................................... 248 195 171
Income from securities and participating interests............. 19 12 13
Results from financial transactions............................ 41 32 60
Other.......................................................... 43 43 32
----- ----- -----
351 282 276
===== ===== =====

The item Commission is made up as follows:
Insurance...................................................... 102 81 82
Other.......................................................... 146 114 89
----- ----- -----
248 195 171
===== ===== =====

Commission income includes fees for services including insurance broking
and funds transfer services.

F-44
355

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

5. RESULTS FROM THE BANKING OPERATIONS

Notes 5.1 through 5.8 contain a more detailed explanation of the banking
results on the basis of the statutory formats and analyses applicable to these
activities. As a result, the figures are not always comparable with those in ING
Groep N.V.'s consolidated profit and loss account and related notes.

5.1. PROFIT AND LOSS ACCOUNT OF THE BANKING OPERATIONS

1996 1995 1994
------ ------ ------

Interest income............................................ 20,255 18,371 17,788
Interest charges........................................... 13,004 12,113 11,500
------ ------ ------
Interest................................................... 7,251 6,258 6,288
Income relating to securities and participating
interests................................................ 132 109 106
Commission income.......................................... 3,376 2,392 1,840
Commission expense......................................... 729 412 472
------ ------ ------
Commission................................................. 2,647 1,980 1,368
Result from financial transactions......................... 1,230 977 37
Other revenue.............................................. 456 433 368
------ ------ ------
Other income............................................... 4,465 3,499 1,879
Total income............................................... 11,716 9,757 8,167
Staff costs................................................ 4,319 3,516 2,736
Other administrative expenses.............................. 3,597 2,940 2,489
------ ------ ------
7,916 6,456 5,225
Depreciation............................................... 537 459 398
------ ------ ------
Operating expenditure...................................... 8,453 6,915 5,623
Value adjustments to receivables........................... 1,130 1,090 1,035
------ ------ ------
Total expenditure.......................................... 9,583 8,005 6,658
Operating result before taxation........................... 2,133 1,752 1,509
Taxation................................................... 590 556 476
Third-party interests...................................... 34 16 (6)
------ ------ ------
Net profit................................................. 1,509 1,180 1,039
====== ====== ======

5.2. INTEREST

This item includes interest income and interest charges, both separately
and netted off, including results from interest-rate arbitrage and results on
financial instruments serving to limit interest-rate risks, as well as fees
connected with lending.

Interest income includes an amount of NLG 2,848 million (1995: NLG 2,485
million, 1994: NLG 2,410 million) in respect of interest-bearing securities.
Interest charges include an amount of NLG 2,026 million (1995: NLG 1,537
million, 1994: NLG 1,408 million) in respect of interest-bearing securities.

F-45
356

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

5.3. INCOME FROM SECURITIES AND PARTICIPATING INTERESTS

This item includes dividends, other income from shares held in the
investment portfolio and the results from participating interests.

1996 1995 1994
---- ---- ----

Shares............................................................. 17 10 8
Participating interests stated at net asset value.................. 53 63 81
Participating interests stated at fair value....................... 62 36 17
--- --- ---
132 109 106
=== === ===

5.4. COMMISSION

This item includes income and expense, both separately and netted off,
related to fees for banking services other than income and expense which are
treated as interest.

5.5. RESULT FROM FINANCIAL TRANSACTIONS

This item includes results on exchange-rate and stock price fluctuations in
the securities trading portfolio as well as valuation differences on equity
participations. Also included here are exchange-rate differences on assets and
liabilities denominated in foreign currencies, the results of associated forward
contracts and the results on financial instruments other than those serving to
limit interest-rate risks as well as asset trading results.

1996 1995 1994
----- ---- ----

Result from securities trading portfolio......................... 881 513 131
Result from currency trading portfolio........................... 109 189 51
Other............................................................ 240 275 (145)
--- --- ----
1,230 977 37
=== === ====

5.6. OTHER REVENUE

This item includes income which cannot be classified with any of the above
items, including rental income, results on the sale of property and leasing
income which is not treated as interest.

5.7. STAFF COSTS AND OTHER ADMINISTRATIVE EXPENSES

This item includes accommodation expenses, third-party supplies and
services, other general expenses, including advertising and publicity expenses
as well as other interest charges.

1996 1995 1994
----- ----- -----

Salaries, including bonuses and premium transfer allowance..... 3,034 2,530 1,976
Pension and early retirement charges........................... 229 171 149
Social security charges........................................ 255 183 136
Other staff costs.............................................. 801 632 475
----- ----- -----
Total staff costs.............................................. 4,319 3,516 2,736
Other administrative expenses.................................. 3,597 2,940 2,489
----- ----- -----
7,916 6,456 5,225
===== ===== =====

F-46
357

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

5.8. DEPRECIATION

By category:

1996 1995 1994
----- ----- -----

Property....................................................... -- 32 25
Equipment and other operating assets........................... 537 427 377
----- ----- -----
537 459 402
Less: investment grants released............................... -- -- 4
----- ----- -----
537 459 398
===== ===== =====

F-47
358

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

6. PARENT COMPANY INFORMATION

PARENT COMPANY BALANCE SHEET AS AT DECEMBER 31

After profit appropriation

ASSETS 1996 1995
------- -------

Participating interests(6.2.1)....................................... 39,735 28,769
Cash................................................................. -- 163
Other assets(6.2.2).................................................. 368 372
------ ------
TOTAL................................................................ 40,103 29,304
====== ======
LIABILITIES
Shareholders' equity(6.2.3)
Share capital........................................................ 1,004 950
Share premium........................................................ 5,395 4,196
Revaluation reserve.................................................. 15,158 7,937
Reserve for participating interests.................................. 693 10,421
Other reserves....................................................... 11,874 273
------ ------
34,124 23,777
Subordinated loan(6.2.4)............................................. 1,068 1,068
------ ------
Capital base......................................................... 35,192 24,845
Other liabilities(6.2.5)............................................. 4,911 4,459
------ ------
TOTAL................................................................ 40,103 29,304
====== ======

PARENT COMPANY PROFIT AND LOSS ACCOUNT

1996 1995 1994
------ ------ ------

Result of Group companies after taxation...................... 3,388 2,673 2,314
Other results after taxation.................................. (67) (24) (12)
----- ----- -----
NET PROFIT.................................................... 3,321 2,649 2,302
===== ===== =====

See accompanying Notes

F-48
359

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

PARENT COMPANY STATEMENT OF CASH FLOWS

1996 1995 1994
------ ------ ------

NET PROFIT................................................. 3,321 2,649 2,302
Adjusted for:
-- equity in earnings of subsidiaries.................... (3,388) (2,673) (2,314)
-- decrease in Receivables from Group companies.......... 9 361 --
-- increase in Amounts owed to Group companies........... 221 2,131 180
-- other, net............................................ 92 (201) 28
----- ----- -----
NET CASH FLOW FROM OPERATING ACTIVITIES.................... 255 2,267 196
Investments and advances:
-- investments in Group companies........................ (1,187) (2,108) (1,199)
----- ----- -----
NET CASH FLOW FROM INVESTING ACTIVITIES.................... (1,187) (2,108) (1,199)
Private placings of ordinary shares........................ 1,270 129 129
Cash dividends............................................. (501) (125) (126)
Loans taken up............................................. -- -- 1,000
----- ----- -----
NET CASH FLOW FROM FINANCING ACTIVITIES.................... 769 4 1,003
NET CASH FLOW.............................................. (163) 163 --
CASH AT BEGINNING OF YEAR.................................. 163 -- --
----- ----- -----
CASH AT YEAR-END........................................... 0 163 0
===== ===== =====

See accompanying Notes

F-49
360

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

6.1. ACCOUNTING PRINCIPLES FOR THE PARENT COMPANY BALANCE SHEET AND PROFIT AND
LOSS ACCOUNT

The principles of valuation and determination of results described with
regard to the consolidated balance sheet and profit and loss account are also
applicable to the valuation of directly held participating interests. Amounts
receivable from and owed to Group companies in connection with ordinary
interbank transactions are included in Other assets and Other liabilities,
respectively.

The market value of depositary receipts for ordinary and preference shares
of ING Groep N.V. held by Group companies has been deducted from shareholders'
equity. The dividends received on these shares have been eliminated from the
result.

Changes in balance sheet value due to movements in the revaluation reserve
for participating interests are reflected in the revaluation reserve. Changes in
balance sheet value due to the results of these participating interests
accounted for in accordance with Group accounting principles are included in the
profit and loss account. As at January 1, 1996, the retained profits of
participating interests which are freely distributable, and which had been
included up to 1995 in the reserve for participating interests, were transferred
from the latter reserve to other reserves. Accordingly, the reserve for
participating interests as at December 31, 1996 consists exclusively of retained
profits of participating interests which are not freely distributable.

Other changes in the balance sheet value of these participating interests,
other than movements due to changes in capital, are included in Other reserves.

6.2. NOTES TO THE PARENT COMPANY BALANCE SHEET

ASSETS

6.2.1. PARTICIPATING INTERESTS

The Participating interests in Group companies relate mainly to the
shareholdings in ING Verzekeringen N.V. and ING Bank N.V., including Stichting
Regio Bank. The entire share capital of these participating interests is held by
ING Groep N.V. No guarantees have been issued in respect of the participating
interests.

1996 1995
------ ------

Opening balance...................................................... 28,769 24,378
Investment in Group companies........................................ 1,187 2,108
Changes in the composition of the Group.............................. (450) (1,315)
Revaluations......................................................... 7,295 1,091
Result of Group companies............................................ 3,388 2,673
Dividend............................................................. (141) (101)
------ ------
40,048 28,834
Movements in ING Groep N.V. shares held by Group companies........... (313) (65)
------ ------
CLOSING BALANCE...................................................... 39,735 28,769
====== ======

6.2.2. OTHER ASSETS

1996 1995
------ -------

Receivables from Group companies...................................... 357 366
Other receivables, prepayments and accruals........................... 11 6
------ ------
368 372
====== ======

F-50
361

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

LIABILITIES

6.2.3. SHAREHOLDERS' EQUITY

CUMULATIVE
ORDINARY SHARES PREFERENCE SHARES PREFERENCE SHARES
(NOMINAL VALUE NLG (NOMINAL VALUE NLG (NOMINAL VALUE NLG
1.00) 2.50) 2.50)
--------------------- -------------------- --------------------
NUMBER NUMBER NUMBER
SHARE CAPITAL X 1,000 AMOUNT X 1,000 AMOUNT X 1,000 AMOUNT
----------------------- --------- -------- -------- -------- -------- --------

1996
Authorized share
capital.............. 1,500,000 1,500 300,000 750 900,000 2,250
Unissued share
capital.............. 714,264 714 212,920 532 900,000 2,250
------- ------- ------- ------- ------- -------
ISSUED SHARE CAPITAL... 785,736 786 87,080 218 0 0
======= ======= ======= ======= ======= =======

CUMULATIVE
ORDINARY SHARES PREFERENCE SHARES PREFERENCE SHARES
(NOMINAL VALUE NLG (NOMINAL VALUE NLG (NOMINAL VALUE NLG
2.50) 2.50) 2.50)
--------------------- -------------------- --------------------
NUMBER NUMBER NUMBER
X 1,000 AMOUNT X 1,000 AMOUNT X 1,000 AMOUNT
--------- -------- -------- -------- -------- --------

1995
Share capital
authorized........... 525,000 1,313 350,000 875 875,000 2,187
Share capital
unissued............. 232,388 581 262,920 657 875,000 2,187
------- ------- ------- ------- ------- -------
SHARE CAPITAL ISSUED... 292,612 732 87,080 218 0 0
======= ======= ======= ======= ======= =======

The movements in issued share capital were as follows:

ORDINARY SHARES PREFERENCE SHARES
------------------ -----------------
NUMBER NUMBER
X 1,000 AMOUNT X 1,000 AMOUNT
------- ------ ------- ------

ISSUED SHARE CAPITAL AS AT JANUARY 1, 1994........... 265,959 665 87,080 218
From exchange of ING Verzekeringen N.V. and ING Bank 72 --
N.V. shares and ING Groep N.V. warrants............ -- --
From 1993 final optional dividend.................... 6,649 17 -- --
From 1994 interim optional dividend.................. 6,816 17 -- --
------ --- ------ ---
ISSUED SHARE CAPITAL AS AT DECEMBER 31, 1994......... 279,496 699 87,080 218
From exchange of ING Verzekeringen N.V. and ING Bank 32 --
N.V. shares and ING Groep N.V. warrants............ -- --
From 1994 final optional dividend.................... 6,988 18 -- --
From 1995 interim optional dividend.................. 6,096 15 -- --
------ --- ------ ---
ISSUED SHARE CAPITAL AS AT DECEMBER 31, 1995......... 292,612 732 87,080 218
From 2.5 for 1 stock split........................... 438,918 -- -- --
From exchange of ING Verzekeringen N.V. shares and 28,003 --
ING Groep N.V. warrants............................ 28 --
From 1995 final dividend............................. 13,408 13 -- --
From 1996 interim dividend........................... 11,902 12 -- --
Stock options........................................ 893 1 -- --
------ --- ------ ---
ISSUED SHARE CAPITAL AS AT DECEMBER 31, 1996......... 785,736 786 87,080 218
====== === ====== ===

F-51
362

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

SHAREHOLDERS' RESERVES

The composition of and movements in the reserves were as follows:

RESERVE
REVALU- PARTICI-
SHARE ATION PATING OTHER
TOTAL PREMIUM RESERVE INTERESTS RESERVES
------ ------- ------- --------- --------

BALANCE AS AT JANUARY 1, 1994.............. 20,598 3,989 8,712 5,544 2,353
1993 final dividend and 1994 interim
dividend................................. 831 (29) -- -- 860
Private placements and warrants............ 129 129 -- -- --
Revaluations............................... (1,887) -- (1,866) (21) --
Movements in own shares held by Group
companies................................ (50) -- -- -- (50)
Appropriation from net profit.............. 1,220 -- -- 2,268 (1,048)
------ ----- ----- ------ ------
BALANCE AS AT DECEMBER 31, 1994............ 20,841 4,089 6,846 7,791 2,115
1994 final dividend and 1995 interim
dividend................................. 944 (29) -- -- 973
Private placements and warrants............ 136 136 -- --
Revaluations............................... (429) -- 1,091 58 (1,578)
Movements in own shares held by Group
companies................................ (65) -- -- -- (65)
Appropriation from net profit.............. 1,400 -- -- 2,572 (1,172)
------ ----- ----- ------ ------
BALANCE AS AT DECEMBER 31, 1995............ 22,827 4,196 7,937 10,421 273
Transfer of reserves....................... -- -- -- (9,775) 9,775
1995 final dividend and 1996 interim
dividend................................. 834 (16) -- -- 850
Private placements and warrants............ 1,215 1,215 -- -- --
Revaluations............................... 6,843 -- 7,221 47 (425)
Movements in own shares held by Group
companies................................ (313) -- -- -- (313)
Appropriation from net profit.............. 1,714 -- -- -- 1,714
------ ----- ----- ------ ------
BALANCE AS AT DECEMBER 31, 1996............ 33,120 5,395 15,158 693 11,874
====== ===== ====== ====== ======

The amount of share premium has been fixed at the amount recognized for tax
purposes. The revaluation reserve and the reserve for participating interests
include the statutory reserves.

DIVIDENDS PER SHARE FOR THE YEARS 1996, 1995 AND 1994 ARE AS FOLLOWS:

ORDINARY SHARES PREFERENCE SHARES
-------------------------- --------------------------
PER SHARE AGGREGATE PER SHARE AGGREGATE
NLG(1) MILLIONS NLG NLG MILLIONS NLG
--------- ------------ --------- ------------

1996.................................. 2.00 1,561 0.53 46
1995.................................. 1.66 1,203 0.53 46
1994.................................. 1.50 1,036 0.53 46

- ---------------
(1) 1995 and 1994 per share amounts are restated to reflect the June 3, 1996 2.5
to 1 stock split.

Shareholders, at the discretion of the Executive Board, subject to the
approval of the Supervisory Board, may be given the option to receive dividends
in the form of cash or stock. Stock dividends are usually determined based on a
share value as close as possible to the market value of the shares at the date
on which dividends are paid.

F-52
363

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

All shares are in registered form. No share certificates shall be issued.
Shares may be transferred by means of a deed of transfer, subject to the
approval of the Executive Board of ING Group.

ORDINARY SHARES

The nominal value of the ordinary shares is currently NLG 1.00 (before the
stock split of June 3, 1996, the nominal value was NLG 2.50). Ordinary shares
may only be issued if at least the nominal amount is paid up.

PREFERENCE SHARES

The nominal value of the preference shares is NLG 2.50. Preference shares
are divided into two categories: "A" preference shares and "B" preference
shares. The authorized share capital of ING Group consists of 100 million "A"
preference shares, of which as at December 31, 1996, 87 million have been issued
and 200 million "B" preference shares, none of which have yet been issued. The
"B" preference shares are subdivided into five series of 5 million, 5 million,
40 million, 75 million and 75 million shares, respectively.

Preference shares may only be issued if at least the nominal amount is paid
up.

Preference shares rank before the ordinary shares in entitlement to
dividends and distributions upon liquidation of ING Group, but are subordinated
to the cumulative preference shares. Holders of "A" and "B" preference shares
rank pari passu among themselves. If the profit or amount available for
distribution to the holders of preference shares is not sufficient to make such
distribution in full, such holders will receive a distribution in proportion to
the amount they would have received if such distribution could have been made in
full. The "A" preference shares and "B" preference shares are not cumulative and
the holders thereof will not be compensated in subsequent years for a shortfall
in a prior year.

If the profit or the amount available for distribution to the holders of
preference shares upon liquidation of ING Group is not sufficient to make this
distribution in full, such holders will receive a distribution in proportion to
the amount they would have received if such distribution could have been made in
full.

The ING Group's Articles of Association make provision for cancellation of
preference shares.

"A" PREFERENCE SHARES

The dividend on the "A" preference shares is equal to a percentage,
calculated over NLG 7.50.

This percentage is calculated by taking the arithmetic mean of the average
effective yield on the five longest-dated Dutch government loans, as prepared by
the Dutch Central Bureau of Statistics and published in the Official List of the
Amsterdam Stock Exchange Association for the last twenty stock exchange days
preceding the day on which the first "A" preference shares are issued, or, as
the case may be, preceding the day on which the dividend percentage is adjusted.
The percentage so established may be increased or decreased by not more than
half a percentage point, depending on the market conditions then prevailing, as
the Executive Board may decide with the approval of the Supervisory Board.

The dividend percentage will be readjusted on January 1, 2004 in keeping
with the average effective yield at that time on the five longest-dated Dutch
government loans and thereafter every ten years.

Consequently the dividend on the "A" preference shares will be NLG 0.53 per
year until January 1, 2004.

F-53
364

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

"A" preference shares may only be cancelled if a distribution of NLG 5.00
can be made on each "A" preference share in addition to the repayment of the
nominal amount of NLG 2.50. Upon liquidation of ING Group, a distribution of NLG
7.50 will, insofar possible, be made on each "A" preference share.

"B" PREFERENCE SHARES

The dividend on the "B" preference shares will be equal to a percentage,
calculated on the amount (including share premium) for which the first "B"
preference shares of the relevant series are subscribed.

The percentage, referred to in the preceding paragraph, is for each series
of the "B" preference shares equal to the arithmetic mean of the average
effective yield on the government loans with a maturity (term to maturity) of
six to seven years, as prepared by the Dutch Central Bureau of Statistics and
published in the Official List of the Amsterdam Stock Exchange Association for
the last twenty stock exchange days preceding the day on which the first "B"
preference shares of the relevant series are issued, or as the case may be,
preceding the day on which the dividend percentage is adjusted.

The percentage so established may be increased or decreased by not more
than one percentage point, depending on the market conditions then prevailing,
as the Executive Board may decide with the approval of the Supervisory Board.

The dividend percentage will be readjusted in keeping with the average
effective yield at that time on January 1 of the calendar year following the day
after seven years have expired since the day on which the first "B" preference
shares of the relevant series were issued and thereafter every seven years.

"B" preference shares may only be cancelled if in addition to the repayment
of the nominal value of NLG 2.50 a distribution is made equal to the amount
(including share premium) for which the first "B" preference shares of the
relevant series were subscribed minus NLG 2.50. Upon liquidation of ING Group, a
distribution of the amount (including share premium) for which the first "B"
preference shares of the relevant series were subscribed will, insofar possible,
be made on each "B" preference share.

BEARER RECEIPTS FOR ORDINARY SHARES AND FOR PREFERENCE SHARES

The issue and transfer of Ordinary Shares and Preference Shares is
restricted, pursuant to the Articles of Association of ING Group. Natural
persons may acquire Ordinary Shares and/or Preference Shares up to a limit of 1%
of the issued Ordinary Share capital or the issued Preference Share capital,
respectively. Legal entities may not acquire any Ordinary or Preference Shares.
However, there are some exceptions to this rule, including the Trust specially
appointed for that purpose.

The Trust holds more than 99% of the Ordinary and Preference Shares issued
by ING Group. In exchange for these Shares, the Trust has issued Bearer Receipts
for Ordinary Shares and Preference Shares. The Bearer Receipts are freely
transferable.

The holder of a Bearer Receipt is entitled to receive from the Trust
payment of dividends and distributions corresponding with the dividends and
distributions received by the Trust on a Share of the relevant category.
Moreover, the holder of a Bearer Receipt is entitled to attend and to speak at
the general meeting of shareholders of ING Group, but does not have voting
rights.

F-54
365

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The number of Bearer Receipts for ING Groep N.V. Ordinary and Preference
Shares held by Group companies as at December 31 amounted to:

1996 1995
-------------------------- --------------------------
NUMBER MARKET NUMBER MARKET
X 1,000 CAPITALIZATION X 1,000 CAPITALIZATION
------- -------------- ------- --------------

Ordinary Shares.......................... 43,641 2,714.4 14,970 1,604.8
Preference Shares........................ 4,290 39.8 4,246 36.1

CUMULATIVE PREFERENCE SHARES

The nominal value of the Cumulative Preference Shares is NLG 2.50.
Cumulative Preference Shares may only be issued if at least one fourth of the
nominal amount is paid up.

The Cumulative Preference Shares rank before the Preference Shares and the
Ordinary Shares in entitlement to dividend and to distributions upon liquidation
of ING Group.

The dividend on the Cumulative Preference Shares will be equal to a
percentage, calculated on the amount compulsorily paid up or yet to be paid up.
The percentage, referred to in the preceding paragraph, shall be equal to the
average of the special advance rate of the Dutch Central Bank, weighted on the
basis of the number of days for which it applied, during the financial year in
respect of which the distribution is made, increased by two and a half points
and by the average interest surcharge as applied by the three largest lending
institutions, in terms of balance sheet total, in the Netherlands (excluding
lending institutions which are part of the same group as ING Group).

If and to the extent that the profits are not sufficient to make the
dividend distribution referred to above in full, the shortfall will be
distributed from the reserves insofar possible. If and to the extent that the
dividend distribution cannot be made from the reserves, the profits achieved in
subsequent years shall first be used to make up for the shortfall before any
distribution may be made on shares of any other category.

The ING Group's Articles of Association make provision for the cancellation
of Cumulative Preference Shares. Upon cancellation of Cumulative Preference
Shares and upon liquidation of ING Group, the amount paid up on the Cumulative
Preference Shares will be repaid together with the dividend shortfall in
preceding years, insofar as this shortfall has not yet been made up.

WARRANTS

In 1991, ING Group authorized the issuance of 261,070,062 warrants, of
which 253,053,188 have been issued. On December 31, 1996 174,845,527 Warrants
were outstanding (1995: 253,022,830). Warrant holders are entitled to obtain
from ING Group for a fixed price, Bearer Receipts for Ordinary Shares in the
ratio of 14 Warrants to 5 Bearer Receipts. Warrant holders may exercise their
rights at their own discretion but no later than March 15, 2001. As at December
31, 1996, a total of 23,654 Warrants (1995: 21,816,577) was held by Group
companies of ING Group.

The current exercise price is NLG 136 for 5 Bearer Receipts (NLG 27.20 per
Bearer Receipt). The exercise price will be adjusted by ING Group if one or more
of the following general circumstances occur:

1. ING Group issues Ordinary Shares with pre-emptive rights for existing
holders thereof against an issue price which is below the then
applicable exercise price;

2. ING Group issues Ordinary Shares to existing holders thereof, such
shares being paid from a reserve of the company at a price which is
below the then applicable exercise price;

3. ING Group issues Ordinary Shares to existing holders thereof by way of
paying a dividend at a price which is below the then applicable exercise
price;

F-55
366

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

4. ING Group grants to existing holders of Ordinary Shares pre-emptive
rights to obtain securities other than Ordinary Shares;

5. any company grants to existing holders of Ordinary Shares of ING Group a
right of subscription for securities which may be converted into or
exchanged for Ordinary Shares of ING Group, provided that the price for
which such Ordinary Shares of ING Group may (initially) be obtained is
lower than the then applicable exercise price;

6. ING Group makes a distribution in cash out of its share premium
reserve(s) to holders of Ordinary Shares.

In case of a split or consolidation of the shares of ING Group, a warrant
holder shall remain entitled to a number of shares, the aggregate nominal value
of which shall be equal to the aggregate nominal value of the number of shares
to which he was entitled before such split or consolidation.

In case of a restructuring of the share capital of ING Group or a merger of
ING Group with any other company or a transfer of the assets of ING Group (or a
substantial part thereof) to any other company, the exercise price of the
Warrants will not be adjusted. In that event, a Warrant holder will be entitled
to obtain the securities of the kind and number a holder of Ordinary Shares
would have been entitled to if the warrants had been exchanged for Ordinary
Shares immediately before that event.

STOCK OPTION PLAN

The ordinary share capital may increase as a result of exercised Option
rights granted to a number of senior executives. The options may be exercised
during predetermined periods over a period of five years.

OPTION RIGHTS

ORIGINAL OPTIONS IN OPTIONS IN EXERCISE PRICE
NUMBER OF ISSUE AS AT ISSUE AS AT NLG
OPTIONS 01-01-1996 12-31-1996 12-31-1996
----------- ------------ ------------ ----------------

1994.............................. 50,501 50,501 8,418 25.53
208,717 208,717 108,977 26.36
1995.............................. 873,506 760,496 306,369 28.27
495,879 495,879 199,141 29.10
1996.............................. 2,450 -- 2,450 43.52
880,258 -- 880,000 51.80
--------- --------- ---------
2,511,311 1,515,593 1,505,355
========= ========= =========

The movements in the option rights were as follows:

1996 1995
--------- ---------

Opening balance................................................. 1,515,593 259,218
Granted......................................................... 882,708 1,369,385
Exercised....................................................... 892,946 113,010
--------- ---------
CLOSING BALANCE................................................. 1,505,355 1,515,593
========= =========

6.2.4. SUBORDINATED LOAN

1996 1995
----- -----

Subordinated loan....................................................... 1,068 1,068

F-56
367

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

This relates to the 10% subordinated debentures issued by ING Groep N.V. in
1991, due on March 15, 2001.

The number of debentures held by Group companies as at December 31, 1996
was 63,575 with a balance sheet value of NLG 64 million (December 31, 1995:
63,575 with a balance sheet value of NLG 64 million).

6.2.5. OTHER LIABILITIES

1996 1995
----- -----

Debenture loan.......................................................... 1,000 1,000
Amounts owed to Group companies......................................... 2,844 2,623
Dividend................................................................ 965 710
Other amounts owed and accrued liabilities.............................. 102 126
----- -----
4,911 4,459
===== =====

The Debenture loan relates to the 1994 7.125% ING Groep N.V. loan with a
term of 10 years up to June 28, 2004.

The number of debentures held by Group companies as at December 31, 1996
was 475 with a balance sheet value of NLG 0.5 million (December 31, 1995: 33,440
with a balance sheet value of NLG 33 million).

Analysis of Amounts owed to Group companies by remaining term:

1996 1995
----- -----

up to one year.......................................................... -- 220
from one year to five years............................................. 573 682
over five years......................................................... 2,271 1,721
----- -----
2,844 2,623
===== =====

GENERAL

The remuneration of the members of the Executive Board, including pension
contributions, amounted to NLG 14 million (1995: NLG 18 million). The
remuneration of the members and former members of the Supervisory Board amounted
in 1996 to NLG 1 million (1995: NLG 1 million).

The amount outstanding as at December 31, 1996 in respect of loans and
advances to members of the Executive Board and the Supervisory Board was NLG 14
million (1995: NLG 7 million) at an average interest rate of 4.9% (1995: 5.8%).

F-57
368

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

7. DIFFERENCES BETWEEN DUTCH AND US ACCOUNTING PRINCIPLES

7.1. VALUATION AND INCOME RECOGNITION DIFFERENCES BETWEEN DUTCH AND US
ACCOUNTING PRINCIPLES

The consolidated financial statements of ING Group are presented in
accordance with accounting principles generally accepted in the Netherlands
("Dutch GAAP"). Dutch GAAP differs in certain respects from accounting
principles generally accepted in the United States of America ("U.S. GAAP"). The
following is a summary of the significant differences.

a. Goodwill.

Goodwill, which represents the difference between the purchase price
and the fair value of the net assets acquired, is debited or credited
in full to shareholders' equity at transaction date.

Under U.S. GAAP, such goodwill is capitalized and amortized over the
expected periods to be benefited with adjustments for impairment
evaluated based on estimated undiscounted future cash flows.

Under Dutch GAAP, ING Group accounted for the 1991 merger of its
insurance and banking businesses under the pooling of interests
method. As such, the balance sheets and operating statements of the
two businesses were effectively combined and no adjustments to the
carrying values of the assets and liabilities were made. Under U.S.
GAAP, this merger was accounted for under the purchase method. Because
the purchase price was less than the estimated fair value of the net
assets acquired, negative goodwill was created, which will be
amortized over the 10-year period beginning March, 1991.

b. Recognition of realized gains and losses on sales of participating
interests and Group companies.

Gains and losses on disposal of participating interests and Group
companies, defined as the difference between the balance sheet value
and the proceeds on sale, are directly credited or debited to
shareholders' equity.

Under U.S. GAAP, gains and losses on those disposals are computed
based on historical cost and are incorporated in the profit and loss
account at the date of disposal.

c. Real estate.

Investments in land and buildings are generally carried at their
estimated net realizable value, based on values prevailing at
acquisition or on subsequent, periodic appraisals. These properties
are not depreciated. Additionally, realized gains and losses are
charged directly to shareholders' equity.

U.S. GAAP distinguishes between real estate properties held for own
use and real estate investments. Properties held for own use are
generally carried at historical cost less accumulated depreciation,
but the carrying amounts may be adjusted for a decline in value deemed
other than temporary; depreciation is provided over the estimated
economic life of the property. Properties held for investment are
generally carried at the lower of cost or net realizable value, and
are adjusted for declines in value deemed other than temporary;
depreciation is provided over the estimated economic life of the
property. Realized gains and losses are charged to the profit and loss
account.

F-58
369

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

d. Recognition of realized gains and losses on sales of shares and
convertible debentures.

Realized and unrealized gains and losses on investments in shares and
convertible debentures are recognized directly in shareholders' equity
in the year the revaluations or sales take place.

Under U.S. GAAP, realized gains and losses on sales of such
investments are recorded in earnings of the period in which the sales
occurred. Individual securities classified as available-for-sale are
subject to review to determine whether a decline in fair value below
cost or amortized cost is other than temporary. If the decline in fair
value is judged to be other than temporary, the cost basis of the
individual security is written down to fair value as the new cost
basis and the amount of the write down is included in current period
earnings.

e. Valuation of debt securities.

Debt securities held for investment, other than zero-coupon bonds, are
carried at redemption value. Premiums or discounts arising at
acquisition are recorded separately and amortized over the estimated
life of the portfolio on a straight line basis. Zero-coupon bonds are
carried at amortized cost. Additionally, debt securities are recorded
net of a provision for credit losses.

Under U.S. GAAP, investments in debt securities must be classified as
either:

(i) trading, which are valued at fair value with changes in fair
value recorded through current period earnings;

(ii) held-to-maturity, which are carried at amortized cost, or;

(iii) available-for-sale, which are carried at fair value with changes
in fair value recorded as a separate component of shareholders'
equity.

Premiums and discounts arising from acquisition are amortized to
interest income using the effective yield method over the contractual
life of the securities. Allowances for credit losses on debt
securities are not permitted. Individual securities classified as
either available-for-sale or held-to-maturity are subject to review
to determine whether a decline in fair value below amortized cost is
other than temporary. If the decline in fair value is judged to be
other than temporary, the cost basis of the individual security is
written down to fair value as the new cost basis and the amount of
the write down is included in the profit and loss account.

Revaluing debt securities classified as available-for-sale to fair
value results in a reconciling item to shareholders' equity. A
portion of this reconciliation relates to assets held in support of
policies in the Netherlands where the policyholder shares in the
profits of the company. Although unrealized gains on these assets are
included in shareholders' equity for U.S. GAAP purposes, as these
gains are realized a portion may be passed to policyholders, at the
discretion of the Company.

f. Recognition of results on sales of debt securities.

Realized gains and losses on sales of investments in debt securities
are deferred as part of the provision for yield differences and
amortized on a straight-line basis over the estimated average
remaining life of the portfolio.

Under U.S. GAAP, realized gains and losses on sales of investments in
debt securities are recorded in the earnings of the period in which
the sales occurred.

F-59
370

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

g. Accounting for certain derivative financial instruments denominated in
foreign currencies that did not meet the U.S. hedging criteria.

Under Dutch GAAP, derivative financial instruments which are used for
interest rate and foreign exchange risk management are accounted for
as off-balance sheet transactions. The related interest income and
expense is recognized on an accrual basis. Risk management practices
may include the use of foreign currency denominated derivative
financial instruments, primarily interest rate swaps, within the
overall interest rate gap management.

Under U.S. GAAP, such derivative financial instruments do not meet the
criteria for hedge accounting treatment and are carried on the U.S.
GAAP balance sheet at fair value, with changes in fair value
recognized in current period earnings.

h. Accounting for derivative financial instruments held for risk
management purposes that did not meet the U.S. hedging criteria.

Under Dutch GAAP, interest rate contracts, primarily interest rate
swap contracts, used to manage the interest rate risk arising in ING's
domestic banking activities are accounted for as off-balance sheet
transactions. The related interest income and expense is accounted for
on a basis in conformity with the hedged position, primarily on an
accrual basis. ING's ALCO risk management activities are conducted on
an overall basis without, through December 31, 1996, specifically
designating derivative contracts as hedges of individual assets or
liabilities. See "Business -- Risk Management -- Interest Rate Risk in
Banking Activities -- Interest rate risk from non-trading activities".

U.S. GAAP requires that derivatives be carried at fair value with
changes in fair value recorded in income unless specified criteria are
met to obtain hedge accounting treatment. One of such specified
criteria, which ING has not complied with, is the specific
contemporaneous designation of each derivative contract as a hedge of
specific assets, liabilities, or pools of similar items. Accordingly,
the risk management derivatives were carried on the U.S. GAAP balance
sheet as at December 31, 1996 and 1995, at fair value with changes in
fair value recognized in current period earnings.

i. Deferred acquisition costs of insurance contracts.

Under both Dutch and U.S. GAAP, costs that vary with and are directly
related to the acquisition of life insurance contracts are deferred
and amortized.

Under Dutch GAAP, deferred acquisition costs are amortized in
proportion to future premiums. Under U.S. GAAP, deferred acquisition
costs of traditional insurance contracts are likewise amortized in
proportion to future premiums. For universal-life type contracts,
investment contracts and for participating individual life insurance
contracts in the Netherlands, U.S. GAAP requires that deferred
acquisition costs be amortized at a constant rate based on the
present value of the estimated gross profit margins expected to be
realized over the life of the book of contracts. In addition, in
accordance with SFAS 115, deferred acquisition costs related to
universal-life type contracts, investment contracts and participating
individual life insurance contracts in The Netherlands are adjusted
to reflect changes that would have been necessary if unrealized
investment gains and losses related to available-for-sale securities
had been realized. The SFAS 115 adjustment to deferred acquisition
costs is an adjustment to equity that is not taken through net
profit. As a result of this adjustment, U.S. GAAP equity has been
reduced by NLG 349 million in 1996 (1995: NLG 345 million).

F-60
371

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

j. General provisions.

Under Dutch GAAP, liabilities can be set up under certain conditions,
for expenditures that will be incurred in the future, such as expenses
relating to information technology systems enhancement.

Under U.S. GAAP, the criteria for setting up liabilities are more
stringent and include, among others, that a liability be incurred at
the date of the financial statements for such costs. As a result, a
portion of the general provision has been eliminated in order to meet
the U.S. GAAP criteria.

k. Pension liabilities and pension costs.

For most ING Group employees, separate funds have been created for
pension entitlements. These funds are separate legal entities outside
the control of ING Group, that are accounted for in separate financial
statements. For the Dutch pension funds, the amount expensed in a
given period is based on past and estimated future payments to the
funds. A liability (or asset) is recognized for the excess (or
deficiency) of the current year's expense over the current year's
payments required by the funds.

Under U.S. GAAP, the pension expense is based on a specific method of
actuarial valuation of plan assets and future, as well as past,
expected liabilities. Amounts recognized as expense may differ from
amounts funded in the same year. The accrual of pension expense is
intended to effectively match the full cost of the expected pension
benefits to the period of employee service.

l. Post-employment benefits.

Under Dutch GAAP a liability for early retirement benefit costs is
recognized when eligible employees opt for such an arrangement.

Under U.S. GAAP, the method described for the expense to be recognized
as post-employment benefits is similar to those governing the
recognition of pension expense.

m. Post-retirement benefits.

For post-retirement benefits other than pensions, a provision has been
established, partly based on accrual of those benefits during the
service of the employees and partly based on a valuation of those
benefits at the retirement date. Yearly increases to the provision are
charged to the profit and loss account.

Under U.S. GAAP, the expense for expected post-retirement benefits
other than pensions must be accrued during the service of an employee.
The methods prescribed for determining the expense to be recognized
are similar in many respects to those governing the recognition of
pension expense.

n. Provision for life policy liabilities.

The provision for life policy liabilities, under both Dutch and U.S.
GAAP, is calculated based on the benefits attributable to the
policyholders as set out in the insurance contracts.

Under both Dutch and U.S. GAAP, the liability for life policy benefits
for traditional life insurance contracts is computed using a net level
premium method with assumptions such as expected investment yields,
mortality, morbidity, terminations and expenses consistent with the
provisions of Statement of Financial Accounting Standards No. 60,
"Accounting and Reporting by

F-61
372

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Insurance Enterprises." These assumptions are based on expectations at
the time the insurance contracts are made and include a provision for
adverse deviation. Additionally, under both Dutch and U.S. GAAP, the
adequacy of the provision for life policy benefits is evaluated each
year and is augmented if necessary. The principal difference between
Dutch and U.S. GAAP relates to applied investment yields for certain
Group companies. Assumed investment yields for these companies under
Dutch GAAP range from 4.50% to 6.75% in accordance with the valuation
basis prescribed by the regulatory authorities. While for Dutch GAAP the
liability for life policy benefits is adequate, for purposes of the
reconciliation of the Dutch accounts to U.S. GAAP, ING Group has
assumed, in accordance with SFAS 60, investment yields ranging from
4.25% to 6.00%.

Under both Dutch and U.S. GAAP, the liability for life policy benefits
for universal life and investment type contracts as described in
Statement of Financial Accounting Standards No. 97, "Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration Contracts
and for Realized Gains and Losses from the Sale of Investments," is
equal to the balance that accrues to the benefit of policyholders at the
balance sheet date. These contracts include policies where the
policyholder bears the investment risk, annual life funds and
unit-linked policies. Investments related to such contracts are
segregated and the majority are valued at fair value with changes in
fair value recorded through current period earnings for both Dutch and
U.S. GAAP.

In the Netherlands, the principal individual life insurance contracts
sold by the subsidiaries of ING Group provide for bonuses and
distributions on account of interest or underwriting experience to
policyholders based on the overall results of the operations. Such
amounts are generally credited in the form of additional paid-up
insurance. Participating insurance contracts with such features are
traditionally sold in the United States by mutual insurance companies.
Under both Dutch and U.S. GAAP, the liability for these types of
contracts is equal to the net level reserve consistent with the
provisions of Statement of Financial Accounting Standards No. 120,
"Accounting and Reporting by Mutual Life Enterprises and by Insurance
Enterprises for Certain Long-Duration Participating Contracts.

In 1993, the Company recognized it had adverse experience related to
less than expected mortality related to certain annuity contracts which
provide guaranteed life benefits under defined benefit retirement plans
of client companies, and as a result, began a 15-year program to accrue
for the needed reserve strengthening. Under Dutch GAAP, the accruals
related to 1993 and 1994 were recorded through charges to the income
statement. In 1995, there was a change in Dutch insurance regulations
recommending that the remaining balance of future accruals for this
reserve strengthening be taken at once to the provisions. In accordance
with Dutch GAAP, the required addition to the provision was directly
debited, in total, to shareholders' equity. Under U.S. GAAP, these are
SFAS 60 insurance contracts, and the entire reserve strengthening would
have been recorded through charges to the income statement in 1993 so as
to include realistic reserve mortality assumptions. That is, in 1993,
there would have been a reconciling item with respect to both net profit
and shareholders' equity between Dutch GAAP and U.S. GAAP related to
this reserve strengthening. As a result of the 1995 special accrual,
however, no shareholders' equity or net profit reconciling items exist
in 1995 between Dutch GAAP and U.S. GAAP.

o. Provision for future catastrophe and other accidental losses.

ING Group carries a non-life provision for future catastrophe and
other accidental losses. The yearly additions are based on estimates
of premiums for external reinsurance. The provision implicitly accrues
loadings for catastrophe risks included in gross premium revenues.

F-62
373

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Under U.S. GAAP, this provision is not allowed, since losses on
non-life insurance policies are recorded in the period they are
incurred.

p. Dividend to ING Groep N.V. shareholders.

Final dividends payable to ING Group shareholders are provided for and
deducted from shareholders' equity when they are proposed by the
Executive Board at the end of the accounting period.

Under U.S. GAAP, proposed final dividends are not recognized as a
reduction of shareholders' equity until they are formally declared.

q. Other.

This item mainly relates to certain shareholdings presented as part of
Other assets, which are held for sale, and which are carried at the
lower of cost or market value. Dividends received from and realized
gains and losses on the sale of these shareholdings are charged to the
profit and loss account.

Under U.S. GAAP, these shareholdings are accounted for at either fair
value with changes in fair value recorded in shareholders' equity, or,
in cases where the shareholding exceeds 20% of the voting stock (i.e.
where significant influence is presumed to be exercised), by the
equity method. Realized gains and losses on the sale of these
investments are charged to the profit and loss account.

r. Provision for general banking risks.

Pursuant to Dutch GAAP, ING Group maintained, through December 31,
1996, an undisclosed provision with respect to the general risks
inherent in its banking activities. The provision may be used for all
major losses which are not predictable or estimable, and is accounted
for as a deduction of the loans receivable, under the caption Lending.
Additions to the provision for general banking risks are taken to the
profit and loss account. In conformity with the "Recommendations
regarding the annual accounts of banks" from the Dutch Central Bank,
the tax debits and credits in respect of the additional value
adjustments and re-adjustments are included in the provision itself.

Under U.S. GAAP, such a general risk provision is not permitted.

Subsequent to changes in industry reporting practices in the
Netherlands and starting January 1, 1997, the provision for general
banking risks will be reduced to NLG 1,300 million (from NLG 2,550
million as at December 31, 1996) and renamed "Fund for general banking
risks", which will be disclosed and presented on the liabilities side
of the balance sheet. The remainder of the provision will be added to
shareholders' equity. As a result of this change in presentation, the
amount presented in the reconciliation from Dutch to U.S. GAAP
shareholders' equity in respect of the provision for general banking
risks will substantially decrease in the next reporting periods as
compared to the years 1996 and 1995.

s. Lending commissions.

Under Dutch GAAP, a significant portion of the lending commissions
received and the related direct costs paid, are accounted for on a
cash basis.

Under U.S. GAAP, all loan fees and direct costs are deferred and
recognized as an adjustment to the yield of the related loan or
facility. As the direct costs related to the granted loans and

F-63
374

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

facilities offset a substantial part of the commissions earned and
considering the size and changes in the loan portfolio, ING Group has
estimated that the difference between interest income recognized in
1996 and 1995 and interest income that would have been recognized
under U.S. GAAP is not material.

t. Provision for loan losses.

Under Dutch GAAP, the provision for loan losses in respect of
corporate loans is determined on a case by case basis, taking the
following factors into consideration:

(i) the financial standing of the customer, including a realistic
assessment of the likelihood of repayment of the loan within an
acceptable period and the extent of ING Group's other
commitments to the same customer;

(ii) the realizable value of any security for the loan; and

(iii) the cost associated with obtaining repayment and realization of
any such security.

Under U.S. GAAP, the provision for loan losses within the scope of
SFAS 114 "Accounting by creditors for impairment of a loan" should be
determined based on the present value of expected future cash flows,
discounted using the effective rate of the loan, or, as an
alternative, at the fair value of the loan's collateral. ING Group has
estimated, for those loans subject to SFAS 114, that the difference
between the provisions for loan losses under Dutch GAAP at December
31, 1996 and 1995, and the corresponding provisions under U.S. GAAP is
not material.

F-64
375

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

7.2. RECONCILIATION OF DUTCH GAAP SHAREHOLDERS' EQUITY AND NET PROFIT TO U.S.
GAAP:

SHAREHOLDERS'
EQUITY NET PROFIT
----------------- ----------------
1996 1995 1996 1995
------ ------ ------ ------

AMOUNTS DETERMINED IN ACCORDANCE WITH DUTCH
GAAP: 34,124 23,777 3,321 2,649
------ ------ ------ ------
Adjustments in respect of:
a. Goodwill:
Goodwill associated with acquisitions.... 2,359 2,253 (368) (477)
Negative goodwill associated with the
1991 merger............................ (250) (310) 60 60
b. Recognition of realized gains and losses on
sales of participating interests and
Group companies.......................... -- -- 12 14
c. Real estate
Valuation................................. (2,740) (2,508) (353) (317)
Realized gains and losses on sales........ -- -- 104 136
d. Recognition of realized gains and losses on
sales of shares and convertible
debentures............................... -- -- 885 178
e. Valuation of debt securities............... 5,867 3,912 13 5
f. Recognition of results on sales of debt
securities:
Realized gains and losses on sales....... -- -- 827 575
Reversal of provision for yield
difference............................. 1,156 672 (264) (222)
Amortization of premiums and discounts... -- -- (209) (55)
g. Accounting for certain derivative financial
instruments denominated in foreign
currencies that did not meet the U.S.
hedging criteria......................... 241 258 (17) 332
h. Accounting for derivative financial
instruments held for risk management
purposes that did not meet the U.S.
hedging criteria......................... 78 (195) 235 538
i. Deferred acquisition costs of insurance
contracts................................ 99 44 74 56
j. General provisions......................... 470 103 367 59
k. Pension liabilities and pension costs...... (1,250) (1,209) (40) (154)
l. Post-employment benefits................... (987) (930) (69) (63)
m. Post-retirement benefits................... (328) (356) 28 15
n. Provision for life policy liabilities...... (45) (27) (32) (68)
o. Provision for future catastrophe and other
accidental losses........................ 405 359 44 36
p. Dividend to ING Groep N.V. shareholders.... 966 710 -- --
q. Other...................................... 131 51 14 0
------ ------ ------ ------
Sub-total.................................. 6,172 2,827 1,311 648
Tax effect of the adjustments.............. (1,098) (56) (375) (249)
r. Provision for general banking risks(1)..... 2,550 2,010 416 159
------ ------ ------ ------
Total adjustments.......................... 7,624 4,781 1,352 558
------ ------ ------ ------
AMOUNTS DETERMINED IN ACCORDANCE WITH U.S.
GAAP:....................................... 41,748 28,558 4,673 3,207
====== ====== ====== ======

- ---------------

(1) The Provision for general banking risks is presented net of tax effect.

F-65
376

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

7.3. NET PROFIT PER SHARE

1996 1995 1994 1993
----- ----- ----- -----

Net profit determined in accordance with Dutch GAAP... 3,321 2,649 2,302 2,029
Reconciling adjustments to net profit U.S. GAAP....... 1,352 558 n.a. n.a.
Net profit determined in accordance with U.S. GAAP.... 4,673 3,207 n.a. n.a.
Dividend on preference shares......................... 46 46 46 28
----- ----- ----- -----
Net profit available for ordinary shares and ordinary
shares equivalents:
Dutch GAAP.......................................... 3,275 2,603 2,256 2,001
U.S. GAAP........................................... 4,627 3,161 n.a. n.a.
Net profit per ordinary share and ordinary share
equivalent:
Dutch GAAP.......................................... 4.34 3.67 3.40 3.09
U.S. GAAP........................................... 6.14 4.46 n.a. n.a.

Prior years per share data have been restated to reflect the June 3, 1996
2.5 for 1 stock split, and adjusted for capital movements.

Net profit per ordinary share is calculated based on the weighted average
number of ordinary shares outstanding. The following has been taken into
consideration in the calculation of the weighted average number of ordinary
shares outstanding:

-- Own shares held by Group companies are deducted from the total number
of ordinary shares outstanding.
-- The computation is based on daily averages.
-- In calculating the increase in the weighted average number of shares
resulting from interim and final stock dividends, the day on which the
dividend is payable is considered.
-- In case of exercised warrants, the day of the exercise is considered.
-- Warrants and stock options issued by ING Group are considered ordinary
shares equivalents.

The net profit per share data are computed as if the options and warrants
were exercised at the beginning of the period. In respect of the warrants, the
determination of the shares that would be assumed to be repurchased out of the
funds obtained is based on the market price at the end of the period. For the
stock options, the exercise price is taken into account. The net increase in the
number of shares resulting from the exercise of warrants and stock options is
added to the average number of shares used for the calculation of net profit per
share.

7.4. PRESENTATION DIFFERENCES BETWEEN DUTCH AND US ACCOUNTING PRINCIPLES

In addition to the differences in valuation and income recognition
principles, other differences, essentially related to presentation, exist
between Dutch and U.S. GAAP. Although these differences do not cause differences
between Dutch and U.S. GAAP reported net profit and/or shareholders' equity, it
may be useful to understand them to better interpret the financial statements
presented in accordance with Dutch GAAP. The following is a summary of the
classification differences that pertain to the basic financial statements.

a. Tangible fixed assets, comprised primarily of data processing
equipment and other movable assets used in the Company's operations,
are presented as a separate item in the balance sheet.

Under U.S. GAAP, such assets are presented, together with all other
assets used in the Company's operations, under Property and equipment.

F-66
377

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

b. Real estate properties in use by ING Group's operating entities are
presented as an investment, and the related rental income as investment
income and operating expense.

Under U.S. GAAP, real estate owned and occupied by a business unit is
presented separately under the caption Property and equipment, and the
impact of rental income and expense is eliminated from the profit and
loss account.

c. Equity securities of shareholdings in enterprises in the same
industries as ING Group and certain receivables from the same
enterprises are reported as participating interests, regardless of
whether they are accounted for using the equity method.

Under U.S. GAAP, only shareholdings which are accounted for under the
equity method are presented separately from other investments in
equity securities.

d. Investments for the risk of policyholders, interest in investment pools
and deposits with reinsurers are included in Investments.

Under U.S. GAAP, investments for the risk of policyholders are included
in Separate accounts and interests in investment pools and deposits
with reinsurers are included in Other assets.

e. Assets, other than real estate, under operational lease contracts are
classified as Lending.

Under U.S. GAAP, assets under operational lease contracts are included
in Other assets.

f. The net fair value of certain derivative financial instruments is
presented as part of securities and options, a component of Other
assets. Similarly, interest accrued on derivative contracts is
presented net, under Accrued interest and rents, a component of
Accrued assets.

Under U.S. GAAP, these items are netted to the extent that a master
netting agreement is in place. The gross positive and negative fair
values of derivatives that are considered to be held for trading
purposes are presented under Trading account assets and Trading
account liabilities.

g. Reinsurance recoverables on claims are recorded as an offset to the
insurance provisions. Reinsurance ceded results are included in
Underwriting Expenditure.

Under U.S. GAAP, the insurance liabilities are presented on a gross
basis and the reinsured portion as an asset under Reinsurance
receivables. Reinsurance ceded results are applied to each appropriate
caption of the profit and loss account.

h. Premium income of the non-life operations is presented on a written
basis, with the change in unearned premiums reported as an underwriting
expenditure.

Under U.S. GAAP, non-life premium income is presented on an as earned
basis.

i. Premiums collected on universal-life type contracts and insurance
contracts that do not expose the company to significant mortality or
morbidity risks are reported as premium income and the allocation of
these premiums to the provision for life policy benefits as an
underwriting expense.

Under U.S. GAAP, premiums collected on these types of products are not
reported as revenue in the profit and loss accounts; revenues from
these products are amounts assessed against policyholders and are
reported in the period that the amounts are assessed unless evidence
indicates that the amounts are designed to compensate for services
provided over more than one period.

j. Death and surrender benefits paid on universal-life type contracts and
the corresponding release of the provision for life policy benefits
are reported separately as underwriting expenses in the profit and
loss accounts.

F-67
378

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Under U.S. GAAP, these items are not reported separately; benefits
paid from these products are the amounts paid in excess of the related
release of the provision for life policy benefits.

k. Interest paid to contract holders of guaranteed investment contracts
is reported as an investment expense that is netted against investment
income.

Under U.S. GAAP, the interest paid to contract holders of guaranteed
investment contracts is reported as an underwriting expense and not
netted against investment income.

l. Short-term and long-term borrowings are included in the following
captions: funds entrusted to and debt securities of the banking
operations and other liabilities.

Under U.S. GAAP, short-term borrowings are presented separately from
long term borrowings.

m. If the financial statements had been prepared in accordance with U.S.
GAAP, certain items, which are included in interest income and expense,
would have been classified differently. Included in these captions are,
among others, the amortization of realized gains (losses) on sales of
certain financial instruments used in interest rate risk management
which have been deferred, results of interest arbitrage transactions
and certain loan fees.

Under U.S. GAAP, realized gains (losses) on sales of financial
instruments are classified as either trading income or separately as
results from sales. Results of interest arbitrage transactions are
included in trading income under U.S. GAAP.

n. Investment expenditures include certain amounts for interest charges
and value adjustments to investments as well as administrative
expenses.

Under U.S. GAAP, investment expenditures would generally only include
administrative expenses.

o. All financial information related to health and disability insurance
is incorporated under the segment "non-life".

Under U.S. GAAP, financial information related to these classes of
insurance is incorporated under the segment "life".

F-68
379

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

7.5. CONDENSED CONSOLIDATED BALANCE SHEET

The following is a condensed consolidated balance sheet of ING Group, for
the years ended December 31, 1996 and 1995, restated to reflect the impacts of
the valuation and presentation differences between Dutch and U.S. GAAP.

1996 1995
------------------------ ------------------------
U.S. GAAP DUTCH GAAP U.S. GAAP DUTCH GAAP
--------- ------------ --------- ------------

ASSETS
Total investments............................... 164,715 188,469 131,844 153,758
Separate accounts............................... 23,519 -- 19,929 --
Trading account assets.......................... 32,993 22,454 22,415 14,822
Loans........................................... 201,485 201,848 165,727 166,466
Banks........................................... 37,353 37,353 34,531 34,531
Cash and due from banks......................... 3,078 3,078 2,387 2,387
Participating interests......................... 1,038 3,609 750 3,032
Reinsurance receivables......................... 3,331 373 4,271 518
Other receivables............................... 11,028 10,015 7,767 6,526
Deferred policy acquisition costs............... 4,848 4,749 4,127 4,083
Goodwill........................................ 2,359 -- 2,253 --
Property and equipment.......................... 4,487 1,800 4,154 1,537
Other assets.................................... 17,453 10,150 12,910 8,604
------- ------- ------- -------
TOTAL ASSETS.................................... 507,687 483,898 413,065 396,264
======= ======= ======= =======
LIABILITIES
Future policy benefits, claims reserves, other
policyholder funds and unearned premiums...... 123,945 121,405 110,142 106,773
Deposits........................................ 176,844 204,885 154,346 176,417
Banks........................................... 72,402 72,402 51,996 51,996
Trading account liabilities..................... 12,792 -- 7,530 --
Short-term borrowings and current maturities of
long-term debt................................ 25,199 -- 14,224 --
Long-term borrowings, excluding current
maturities.................................... 18,662 -- 20,995 --
Other liabilities............................... 35,625 50,612 25,134 37,161
------- ------- ------- -------
TOTAL LIABILITIES............................... 465,469 449,304 384,367 372,347
Minority interests.............................. 470 470 140 140
Shareholders' equity............................ 41,748 34,124 28,558 23,777
------- ------- ------- -------
TOTAL LIABILITIES, MINORITY INTERESTS, AND
SHAREHOLDERS' EQUITY.......................... 507,687 483,898 413,065 396,264
======= ======= ======= =======

F-69
380

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

7.6. CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT

The following is a condensed consolidated profit and loss account of ING
Group, for the years ended December 31, 1996 and 1995, restated to reflect the
impacts of the valuation and presentation differences between Dutch and U.S.
GAAP.

1996 1995
-------------------------- --------------------------
U.S. GAAP DUTCH GAAP U.S. GAAP DUTCH GAAP
----------- ------------ ----------- ------------

Revenues................................. 43,373 47,551 37,656 41,203
Expenses................................. 36,791 42,920 32,906 37,345
------ ------ ------ -----
Income before taxes and dividends on own
shares................................. 6,582 4,631 4,750 3,858
Dividends on own shares.................. 72 72 58 58
------ ------ ------ -----
Profit before income taxes............... 6,510 4,559 4,692 3,800
Income taxes............................. 1,802 1,203 1,472 1,138
------ ------ ------ -----
Profit after income taxes................ 4,708 3,356 3,220 2,662
Minority interests....................... 35 35 13 13
------ ------ ------ -----
NET PROFIT............................... 4,673 3,321 3,207 2,649
====== ====== ====== =====

7.7. NEWLY ISSUED STATEMENTS OF THE FINANCIAL ACCOUNTING STANDARDS BOARD

The Financial Accounting Standards Board (FASB) of the United States
issued, in the course of 1996, Statement of Financial Accounting Standards
(SFAS) No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities". SFAS No. 125 addresses whether the transfer of
financial assets should be accounted for as a sale and removed from the balance
sheet or as a financing recognized as a borrowing. SFAS No. 125 uses a
"financial components" approach which focuses on control to determine whether
assets have been sold. If the entity has surrendered control over the
transferred assets, the transaction is considered a sale. Control is considered
surrendered only if the seller has no legal right to the assets, even in
bankruptcy; the buyer has the right to pledge or exchange the assets; and the
seller does not maintain effective control over the assets through an agreement
to repurchase or redeem them. SFAS No. 125 is effective for transactions
occurring after December 31, 1996 and is to be applied prospectively, with
earlier or retroactive application not permitted. Management is in the process
of evaluating the impact this standard will have on ING Group's financial
position and results of operations.

In 1997, the FASB issued SFAS No. 128, "Earnings per Share". SFAS No. 128
establishes standards for computing and presenting earnings per share (EPS) that
are comparable to international EPS standards. SFAS No. 128 is effective for
financial statements issued for periods ending after December 15, 1997; earlier
application is not permitted. At the effective date of this standard, all
prior-period U.S. GAAP EPS data presented will be restated and "Basis EPS" will
be presented. Basis EPS exclude ordinary shares equivalents and other dilution
and is computed by dividing net profit available for ordinary shares by the
weighted-average number of ordinary shares outstanding for the period.

F-70
381

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8. ADDITIONAL INFORMATION REQUIRED BY U.S. GAAP

8.1. PARTICIPATING INTERESTS

ING Group presents its equity method investments under the caption
Participating interests, together with other investments that are carried at net
realizable value. The equity method of accounting is used where ING Group
exercises a significant influence on the commercial and financial policy of the
investee. Other participating interests are stated at estimated net realizable
value, which approximates the fair value of the investment. Amounts reported in
the column "Balance Sheet Value" correspond to the Dutch GAAP balance sheet
values.

1996 1995
-------------------- --------------------
PERCENTAGE BALANCE PERCENTAGE BALANCE
OF OWNERSHIP SHEET ESTIMATED OF OWNERSHIP SHEET ESTIMATED
NAME OF THE INVESTEES 1996 VALUE FAIR VALUE 1995 VALUE FAIR VALUE
- ----------------------------------- ------------ ------- ---------- ------------ ------- ----------

Equity method investments:
Nederlandse
Participatiemaatschappij(1)...... 27% 285 461 -- -- --
De Nationale Investeringsbank
N.V.............................. 20% 261 466 20% 241 315
Bank Slaski S.A.(2)................ -- -- -- 26% 132 224
Atlas Investeringsgroep N.V........ 33% 124 124 33% 115 124
Postkantoren B.V................... 50% 81 81 50% 102 102
Dillon, Read & Co., Inc............ 25% 74 74 25% 55 55
Other equity method
investments(3)................... 213 199 106 121
Other participating interests...... 2,175 2,175 1,761 1,761
----- ----- ----- -----
TOTAL SHARES OF PARTICIPATING
INTERESTS........................ 3,213 3,580 2,512 2,702
Receivables from participating
interests........................ 396 402 520 558
----- ----- ----- -----
TOTAL.............................. 3,609 3,982 3,032 3,260
===== ===== ===== =====

- ------------------

(1) Presented in 1995 as part of Shares and convertible debentures, a component
of Investments.

(2) Consolidated, starting August 1, 1996.

(3) Equity method investments included under "other" do not exceed NLG 60
million individually.

Shareholders' equity at December 31, 1996 includes NLG 115 million (1995:
NLG 96 million) related to non-distributed earnings of equity-method
investments.

F-71
382

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.2. INVESTMENTS

Debt securities include fixed-interest securities, with the exception of
mortgage loans and policy loans. Following is a summary of investments in
marketable securities at December 31, 1996 and 1995. Amounts reported in the
column "Balance Sheet Value" correspond to the Dutch GAAP balance sheet value.

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED BALANCE
COST GAINS LOSSES FAIR VALUE SHEET VALUE
--------- ---------- ---------- ---------- -----------

DECEMBER 31, 1996
Debt securities
available-for-sale:
-- Dutch Government............ 25,087 2,199 54 27,232 25,184
-- Foreign Governments......... 41,616 1,745 194 43,167 41,368
-- Corporate debt securities... 16,411 1,134 132 17,413 16,197
-- Mortgage-backed
securities.................. 8,509 488 91 8,906 8,414
-- Other....................... 10,223 398 42 10,578 10,267
------- ------ ------ ------- -------
Sub-total........................ 101,846 5,964 513 107,296 101,430
Shares and convertible
debentures..................... 11,384 15,291 286 26,390 26,390
------- ------ ------ ------- -------
TOTAL............................ 113,230 21,255 799 133,686 127,820
======= ====== ====== ======= =======

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED BALANCE
COST GAINS LOSSES FAIR VALUE SHEET VALUE
--------- ---------- ---------- ---------- -----------

DECEMBER 31, 1995
Debt securities
available-for-sale:
-- Dutch Government............ 27,034 2,115 948 28,201 27,035
-- Foreign Governments......... 19,732 980 124 20,588 19,723
-- Corporate debt securities... 15,157 1,108 61 16,204 15,045
-- Mortgage-backed
securities.................. 6,959 446 80 7,325 6,898
-- Other....................... 11,653 172 68 11,757 11,462
------ ------ ----- ------- ------
Sub-total........................ 80,535 4,821 1,281 84,075 80,163
Shares and convertible
debentures..................... 10,519 9,723 488 19,754 19,754
------ ------ ----- ------- ------
TOTAL............................ 91,054 14,544 1,769 103,829 99,917
====== ====== ===== ======= ======

F-72
383

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

MATURITIES OF DEBT SECURITIES

The amortized cost and estimated fair value of debt securities by
contractual maturity are shown below. Expected maturities may differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without penalties.

AS OF DECEMBER 31,
1996
----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------

Available-for-sale:
-- Within one year.................................................. 9,412 9,779
-- After 1 year through 5 years..................................... 26,632 28,269
-- After 5 years through 10 years................................... 46,650 49,369
-- After 10 years................................................... 10,333 10,675
-- Without maturity................................................. 310 298
-- Mortgage-backed securities....................................... 8,509 8,906
------- -------
TOTAL............................................................... 101,846 107,296
======= =======

PROCEEDS ON SALES OF INVESTMENTS IN DEBT SECURITIES, SHARES AND CONVERTIBLE
DEBENTURES

During the years ended December 31, 1996 and 1995, proceeds from sales of
debt securities were NLG 81,752 million and NLG 55,831 million, respectively.
For the same periods, proceeds from sales of shares and convertible debentures
were NLG 3,449 million and NLG 1,811 million, respectively.

REALIZED GAINS AND LOSSES ON SALES OF DEBT SECURITIES AND TERMINATION OF
DERIVATIVE FINANCIAL INSTRUMENTS

Under Dutch GAAP, debt securities are stated under Investments at
redemption value. The difference between redemption value and the purchase price
is included as a provision for yield difference in either Accrued liabilities or
Accrued assets. Realized gains and losses on sales of debt securities are
calculated as the difference between the proceeds and the redemption values and
are also included in the provision for yield difference. The provision for yield
differences also includes realized results on the termination of derivative
financial instruments. See Note 8.15. The provision for yield difference is
amortized over the estimated average remaining life to maturity of the
portfolio.

The changes in the provision for yield difference are as follows:

1996 1995
----- -----

Opening balance......................................................... 927 549
Additions............................................................... 1,247 756
Amortization............................................................ (569) (366)
Foreign currency translation adjustments................................ 38 (12)
----- ----
Ending balance.......................................................... 1,643 927
-==== ====

F-73
384

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

REALIZED AND UNREALIZED RESULTS ON SHARES AND CONVERTIBLE DEBENTURES

With respect to shares and convertible debentures, realized as well as
unrealized gains and losses are debited or credited directly to shareholders'
equity under Dutch GAAP. The amounts can be analyzed as follows:

1996 1995
----- -----

Realized gains and losses............................................... 508 131
Unrealized gains and losses............................................. 6,431 2,766
----- -----
Total................................................................... 6,939 2,897
===== =====

Under Dutch GAAP, realized gains and losses on shares and convertible
debentures are calculated as the difference between the proceeds on sales and
the balance sheet value at the beginning of the year.

PROVISIONS FOR CREDIT LOSSES IN THE FIXED-INTEREST SECURITIES PORTFOLIO

ING Group carries a provision for credit losses associated with its
fixed-interest securities portfolio. This provision is netted against the
carrying value of the related investments. For the years 1996 and 1995, the
movements in this provision were:

1996 1995
----- -----

Balance at January 1.................................................... 271 250
Additions:
-- Debentures......................................................... 16 16
-- Mortgage loans..................................................... 22 15
Deductions:............................................................. (3) (10)
---- ----
Net increase for the year............................................... 35 21
---- ----
Balance at December 31.................................................. 306 271
==== ====

As at December 31, 1996, NLG 115 million (1995: NLG 106 million) of the
provision for credit losses relates to the debt securities portfolio and is not
permitted under US GAAP.

ING Group's insurance operations' investments in debentures and other fixed
interest obligations, mortgage loans and real estate, with a combined carrying
value of NLG 155 million, were non-income producing for the year ended December
31, 1996 (December 31, 1995: NLG 413 million).

CONCENTRATIONS

ING Group had investments in debt securities and shares of ABN AMRO N.V.
that exceeded 10% of shareholders' equity both at December 31, 1996 and at
December 31, 1995. The total investment amounted to NLG 8,081 million (1995: NLG
5,342 million) and comprised NLG 7,846 million (1995: NLG 5,024 million) in
shares and NLG 235 million (1995: NLG 318 million) in debt securities.

F-74
385

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.3. LENDING

Lending relates to receivables from non-banks, other than in the form of
interest-bearing securities.

1996 1995
---------------------------- ----------------------------
DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN TOTAL
-------- ------- ------- -------- ------- -------

Loans guaranteed by government
authorities......................... 25,347 1,291 26,638 26,676 1,028 27,704
Loans secured by mortgages............ 82,690 3,016 85,706 68,264 1,811 70,075
Loans guaranteed by credit
institutions........................ 526 546 1,072 300 803 1,103
Other personal lending................ 5,908 841 6,749 5,240 1 5,241
Other business loans.................. 41,755 46,689 88,444 36,018 32,087 68,105
Unearned income....................... (363) (71) (434) (387) (387)
TOTAL GROSS LENDING................... 155,863 52,312 208,175 136,111 35,730 171,841
Provision for loan losses............. (3,777) (3,536)
Tax adjustment related to provision
for loan losses..................... -- 171
Provision for general banking risks,
net of tax.......................... (2,550) (2,010)
------- -------
TOTAL NET LENDING..................... 201,848 166,466
======= =======

The geographic segregation of lending is based on the location of the
office from which the loans are made.

The changes in ING Group's provision for loan losses associated with the
lending portfolio are as follows:

1996 1995
------ ------

Opening balance...................................................... (3,536) (3,382)
Charge-offs.......................................................... 627 713
Recoveries........................................................... (83) (30)
------ ------
Net charge-offs...................................................... 544 683
Additions............................................................ (785) (837)
------ ------
Closing balance...................................................... (3,777) (3,536)
====== ======

Loans are stated at their outstanding principal balances. Interest income
is accrued on the unpaid principal balance.

Each of the business units within the banking operations of ING Group
maintains its own system for servicing and monitoring past due loans. ING
Group's international banking offices and subsidiaries generally account for
delinquent loans in accordance with U.S. GAAP. When a loan is in default as to
payment of principal or interest for 90 days or when, in the judgment of
management, the accrual of interest should cease before 90 days, such a loan is
placed on nonaccrual status. Any accrued but unpaid interest is reversed against
current period interest revenue. Interest payments received on a cash basis
during the period are recorded as interest income. Domestic banking offices
follow the same policy for consumer mortgage and personal loans. For commercial
loans combined with an overdraft facility, interest continues to accrue and is
charged to that overdraft facility. The collectibility of the overdraft facility
is evaluated with the primary loan on a regular basis, and a provision is
established as deemed necessary in the judgment of management.

ING Group identifies loans as impaired as those loans for which it is more
likely than not that 100% of principal and interest amounts contractually due
will not be collected. ING Group evaluates all loans on

F-75
386

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

non-accrual status for potential impairment as well as other loans of which
management may have concerns as to the ultimate collectibility.

The following table summarizes ING Group's investments in impaired loans as
of December 31. In accordance with SFAS 114, small balance homogeneous loans
such as consumer mortgages and loans and small business loans are excluded from
the definition of impaired loans presented below.

1996 1995
------- -------

Total recorded investment in impaired loans at December 31......... 4,073 3,904
Amount of impaired loans for which a provision exists.............. 3,732 3,667
Amount of provision related to impaired loans...................... 1,965 1,913
Average recorded investment in impaired loans during the period.... 3,955 3,675
Interest income on impaired loans recognized in the period......... 262 125
Interest income on impaired loans recognized on a cash basis....... 157 108

8.4. BANKS

The caption Banks relates to receivables from national and international
banks, other than in the form of interest-bearing securities. Receivables from
banks are as follows:

1996 1995
--------------------------- ---------------------------
DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN TOTAL
-------- ------- ------ -------- ------- ------

Loans and advances to banks.............. 2,262 6,035 8,297 1,752 3,513 5,265
Cash, current accounts and other
deposits............................... 16,999 12,162 29,161 17,603 11,771 29,374
------ ------ ------ ------ ------ ------
Total gross receivables from banks....... 19,261 18,197 37,458 19,355 15,284 34,639
Provision for loan losses................ (105) (108)
------ ------
TOTAL NET RECEIVABLES FROM BANKS......... 37,353 34,531
====== ======

The geographic analysis of receivables from banks is based on the location
of the office from which the loans are originated.

The changes in the provision for loan losses related to receivables from
banks are as follows:

1996 1995
---- ----

Opening balance.......................................................... (108) (173)
Charge-offs.............................................................. -- --
Recoveries............................................................... -- (1)
---- ----
Net charge-offs.......................................................... -- (1)
Additions................................................................ 3 66
---- ----
Closing balance.......................................................... (105) (108)
==== ====

F-76
387

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.5. TAXES

The net deferred tax liability is as follows:

1996 1995
----- -----

Deferred tax assets
-- Insurance provisions............................................... 1,681 1,634
-- Provisions......................................................... 445 147
-- Operating losses carry forward..................................... 235 11
-- Other.............................................................. 919 315
----- -----
Total deferred tax assets............................................... 3,280 2,107
Deferred tax liabilities
-- Investments........................................................ 1,892 1,235
-- Deferred acquisition costs......................................... 1,318 1,268
-- Equalization reserve............................................... 448 412
-- Other reserves..................................................... 92 123
-- Provision for depreciation......................................... 59 114
-- General Provisions................................................. 93 112
-- Receivables........................................................ 259 95
-- Loans.............................................................. 42 9
-- Other.............................................................. 264 204
----- -----
Total deferred tax liabilities.......................................... 4,467 3,572
NET DEFERRED TAX LIABILITY.............................................. 1,187 1,465
===== =====

The net deferred tax liability includes an allowance for deferred tax
assets of NLG 10 million and NLG 12 million at December 31, 1996 and 1995,
respectively. The changes in this allowance were NLG (2) million and NLG 7
million for the years 1996 and 1995, respectively.

Income tax payable is presented as part of Other liabilities. As at
December 31, 1996 and 1995, income tax payable was NLG 1,392 million and NLG 775
million, respectively.

The tax expense is as follows:

1996 1995
------------------------------- -------------------------------
DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN TOTAL
-------- ------- ------ -------- ------- ------

Current tax expense.......... 730 490 1,220 836 290 1,126
Deferred tax expense......... (60) 43 (17) (134) 146 12
----- ----- ----- ---- ----- -----
Effective tax expense........ 670 533 1,203 702 436 1,138
===== ===== ===== ==== ===== =====

F-77
388

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The following is a reconciliation of the statutory income tax rate to ING
Group's effective income tax rate:

1996 1995
------ ------

Result before taxation............................................... 4,559 3,800
Statutory tax rate................................................... 35% 35%
----- -----
Statutory tax amount................................................. 1,596 1,330
Participating interests exemption.................................... (349) (237)
Differences caused by different foreign tax rates.................... (107) (96)
Other................................................................ 63 141
----- -----
Effective tax amount................................................. 1,203 1,138
EFFECTIVE TAX RATE................................................... 26.4% 29.9%
===== =====

At December 31, 1996 various subsidiaries of ING Group had net operating
loss carryforwards for income tax purposes amounting to NLG 2,264 million. These
operating loss carryforwards expire in various years through 2011.

8.6. PENSION LIABILITIES

In the main countries in which ING Group operates, employees' retirement
arrangements which cover the majority of employees are provided by defined
benefit plans based on employee pensionable remuneration and length of service.
These are either externally funded, with assets of the plan held separately from
those of ING Group in independently administered funds. The assets consist of
debt securities, share and real estate funds. A small portion (less than 7% in
1996) of the assets are invested in securities of the employer and related
parties, mainly shares of ING Groep N.V. Some smaller Dutch plans are fully
insured with insurance companies of ING Group.

All plans are subject to regular actuarial review. Actuarial advice is
provided by both external consultants and actuaries employed by ING Group.

FUNDING POLICY

ING Group's most significant retirement arrangements are in the
Netherlands. Funding valuations for ING Group's major externally funded Dutch
pension plans are carried out annually using the unit credit method.

The key factors influencing the actuarial valuations are the economic
assumptions. These are: discount rate of 4% per year; no salary increases and
pension increases; fixed-interest investments at redemption value and
investments in shares and convertible debentures and in land and buildings at
market value.

It is assumed that over the long term, the annual rate of return on pension
fund investments will be higher than the discount rate and that a surplus in
investment return will cover the effects of increases in pensionable
remuneration and in pensions in deferment and payment.

All vested benefits are fully funded on the Dutch statutory compliance
basis.

FUNDING LEVEL

At December 31, 1996, the market value of the assets of externally funded
defined benefit plans was NLG 10,845 million (1995: NLG 9,366 million), and net
provisions in the accounts amounted to NLG 1,158 million (1995: NLG 1,118
million). The level of funding of all defined benefit plans at the dates of the
last valuations, in the aggregate, was 122% (1995: 114%). The level of funding
represents the

F-78
389

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

market value of fund assets and the provisions held in the consolidated accounts
at the dates of the most recent valuations expressed as a percentage of the
value of the benefits that had accrued to members at those dates, after allowing
for expected future increases in pensionable remuneration and pensions in the
course of payment.

ADOPTION OF U.S. GAAP

ING Group adopted SFAS No. 87 for purposes of the U.S. GAAP reconciliation
effective January 1, 1994, as it was not feasible to apply it as of January 1,
1989, the date specified in the standard.

The amortization period for the transition liability (asset) is 15 years in
the U.S. GAAP reconciliation. The amount of transition liability (asset)
recorded to shareholders' equity at January 1, 1994 was NLG 166 million; the
remaining transition liability (asset) will be amortized over a 10-year period.

NET PERIODIC PENSION COST

The aggregate amount of the net periodic pension cost for the principal
defined benefit pension plans computed in accordance with SFAS No. 87 is
presented below. At December 31, 1996, these plans represented approximately 90%
(1995: 90%) of all plans based on the market value of the funds plus the
provisions held in ING Group's accounts.

The following are the components of the net periodic pension cost for the
principal plans:

NET PERIODIC COST
-----------------
1996 1995
------ ------

Service cost......................................................... 364 357
Interest cost........................................................ 626 633
Net amortization and deferral........................................ 520 982
Actual return on assets.............................................. (1,318) (1,638)
Employee contributions............................................... (2) (2)
----- -----
NET EMPLOYER COST.................................................... 190 332
===== =====

In addition, NLG 80 million (1995: NLG 54 million) was charged in the
accounts for a large number of smaller defined benefit plans. The amount would
not have been materially different under SFAS No. 87.

F-79
390

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

FUNDED STATUS

The following table summarizes the funded status and the amounts which
would be recognized in ING Group's statement of financial position under SFAS
No. 87 for the principal defined benefits plans:

ACCUMULATED
ASSETS EXCEED BENEFITS
ACCUMULATED EXCEED
BENEFITS ASSETS
----------------- -----------
1996 1995 1996 1995
------ ------ --- ---

Accumulated benefit obligation:
Vested................................................. (7,322) (6,826) (37) (33)
Non-vested............................................. (619) (599) (3) (2)
------ ------ --- ---
Total.................................................. (7,941) (7,425) (40) (35)
------ ------ --- ---
Projected benefit obligation........................... (9,812) (9,126) (48) (43)
Market value of plan assets............................ 10,827 9,346 18 20
------ ------ --- ---
Plan assets above/(below) projected benefit
obligation........................................... 1,015 220 (30) (23)
Unrecognized net transition liability/(asset):......... (253) (287) 2 4
Unrecognized prior service costs....................... 12 9 (3) --
Unrecognized net (gain)/loss........................... (1,908) (1,043) 13 7
Minimum Liability Adjustment........................... -- -- (9) (6)
------ ------ --- ---
PENSION PREPAYMENT/(LIABILITY)......................... (1,134) (1,101) (27) (18)
====== ====== === ===

In addition, an intangible asset of NLG 3 million may be created at 31
December 1996 (31 December 1995: NLG 1 million).

FINANCIAL ASSUMPTIONS

Assumptions (Dutch plans)

% A YEAR
-------------------
1996 1995
------ -----

Discount rate...................................................... 6.5% 6.5%
Salary increase (a)................................................ 3.0% 3.0%
Return on assets................................................... 7.6% 7.6%
Cost of living increase............................................ 2.5% 2.5%

- ---------------

(a) In addition, an allowance for promotional salary increases of 2.5% a
year was made at ages below 45.

The discount rates, salary increases and cost of living increases are those
adopted to value the Dutch plans at December 31. The Dutch retirement plans
account for 87% (1995: 88%) of ING Group's retirement liabilities and 85% (1995:
86%) of ING Group's retirement assets.

DEFINED CONTRIBUTION PLANS

ING Group also operates a number of defined contribution plans covering
employees of certain subsidiaries. The assets of all ING Group's defined
contribution plans are held in independently administered funds. Contributions
are generally determined as a percentage of pay. The pension costs charged to
the profit and loss account represent contributions payable by ING Group to the
funds.

F-80
391

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.7. POST EMPLOYMENT BENEFITS

In the Netherlands the Group provides post employment income benefits to
eligible employees based on employee pensionable remuneration. Benefits do not
vest. In the United States various post employment benefits are provided to
certain eligible employees.

These plans are unfunded but with provisions maintained in the Group's
balance sheet. All are subject to regular actuarial review. In the Netherlands,
actuarial reviews are performed by actuaries employed by the Group in accordance
with official regulations specified by the tax authorities. In the United
States, advice is provided by external actuaries.

Acquisition accounting was adopted for the ING Bank arrangement; the
transition liability at December 31, 1990, was taken as a charge to
shareholders' equity.

In accordance with SFAS No. 112, the entire transition liability for the
other Dutch arrangements has been taken as a charge against shareholders' equity
at December 31, 1993. For the American arrangements, transition to accounting
under SFAS No. 112 occurred either at December 31, 1995 or December 31, 1996.

NET PERIODIC BENEFIT COST

The aggregate amount of net periodic benefit costs for the principal post
employment benefit plans computed in accordance with SFAS No. 87 principles is
presented below:

NET
PERIODIC
COST
-----------
1996 1995
--- ---

Service cost............................................................... 47 44
Interest cost.............................................................. 72 73
Net amortization and deferral.............................................. (2) --
Actual return on assets.................................................... -- --
Employee contributions..................................................... -- --
--- ---
NET EMPLOYER COSTS......................................................... 117 117
=== ===

FUNDED STATUS

The following table summarizes the funded status and the amounts which
would be recognized in the Group's statement of financial position under SFAS
No. 112 for the principal post employment benefit plans:

1996 1995
------ ------

Accumulated benefit obligation (non-vested).......................... (931) (838)
Projected benefit obligation......................................... (1,226) (1,104)
Market value of plan assets.......................................... -- --
------ ------
Plan assets above/(below) projected benefit obligation............... (1,226) (1,104)
Unrecognized prior service costs..................................... -- --
Unrecognized net (gain)/loss......................................... 64 0
------ ------
PENSION PREPAYMENT/(LIABILITY)....................................... (1,162) (1,104)
====== ======

8.8. POST-RETIREMENT BENEFITS OTHER THAN PENSIONS

ING Group provides post-retirement health care benefits to a number of
retired employees in certain countries, principally the Netherlands and the
United States, under several plans which are predominantly unfunded.

F-81
392

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

In the Netherlands, the plans provide a proportion of the premium required,
depending on income, to either the Dutch social security system, or an insured
arrangement. An element of the healthcare plans in the Netherlands is insured
with an insurance company in the ING Group.

In assessing the liability related to these benefits, advice is obtained
from independent actuaries. Evaluations of the major Dutch plans assume medical
cost inflation at 3.0%. General salary increases are assumed at 3%. The discount
rate at December 31, 1996 was 6.5% (1995: 6.5%). The valuations of the major
American plans assume that medical cost inflation will fall from its current
level of approximately 11% over the next few years and reach a constant level of
approximately 5% by the year 2009. The weighted average discount rate assumed at
December 31, 1996 was approximately 7.5% (1995: 7.25%).

NET PERIODIC BENEFIT COST

The following are the components of net periodic cost for the principal
post-retirement healthcare plans, distinguished between those plans covering
non-U.S. employees and those covering U.S. employees.

NET PERIODIC COST
-------------------------------------------------------------
1996 1995
----------------------------- -----------------------------
NON-U.S. NON-U.S.
PLANS U.S. PLANS TOTAL PLANS U.S. PLANS TOTAL
-------- ---------- ----- -------- ---------- -----

Service cost.......................... 17 7 24 16 6 22
Interest cost......................... 26 12 38 27 13 40
Amortization of transition
obligation.......................... -- -- -- 1 -- 1
Net amortization of other items....... -- (33) (33) -- (29) (29)
Actual return on assets............... -- -- -- -- -- --
Employee contributions................ -- -- -- -- -- --
---- ---- ---- ---- ---- ----
NET EMPLOYER COST..................... 43 (14) 29 44 (10) 34
==== ==== ==== ==== ==== ====

FUNDED STATUS

The following table summarizes the status of post-retirement health
benefits:

Accumulated post-retirement benefits:
Retirees.............................. (166) (116) (282) (163) (114) (277)
Fully eligible participants........... (252) (19) (271) (235) (17) (252)
Other active participants............. -- (43) (43) -- (40) (40)
---- ---- ---- ---- ---- ----
Total................................. (418) (178) (596) (398) (171) (569)
Consisting of:
Unrecognized transition obligation.... -- 7 7 -- 6 6
Unrecognized prior service costs...... -- (142) (142) -- (138) (138)
Unrecognized new (gain)/loss.......... (8) 52 44 -- 40 40
---- ---- ---- ---- ---- ----
PROVISION FOR POST-RETIREMENT BENEFITS
OBLIGATION AT DECEMBER 31:.......... (426) (261) (687) (398) (263) (661)
==== ==== ==== ==== ==== ====

An increase of 1% in the assumed health care costs for each future year
would have resulted in an additional accumulated projected benefit obligation of
NLG 89 million at December, 1996 (1995: NLG 83 million) and an increase in the
charge for the year of NLG 11 million (1995: NLG 10 million).

F-82
393

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.9. ANALYSIS OF THE NON-LIFE LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT
EXPENSES

Activity in the non-life liability for unpaid claims and claims adjustment
expenses is as follows:

1996 1995
----- -----

Gross opening balance at January 1....................................... 7,413 6,862
Less reinsurance recoverable........................................... 657 645
----- -----
Net opening balance at January 1......................................... 6,756 6,217
----- -----
Changes in composition of Group companies................................ -- 252
Adjusted opening balance at January 1.................................... 6,756 6,469
----- -----
Add:
Provision for losses and loss adjustment expenses for claims occurring
in the current year, net of reinsurance............................. 4,658 4,384
Decrease in estimated losses and loss adjustment expenses for claims
occurring in prior years, net of reinsurance........................ (357) (312)
Interest accrual of provision for disability losses.................... 76 48
----- -----
Total incurred losses and loss adjustment expenses, net of reinsurance... 4,377 4,120
Deduct loss and loss adjustment expenses payments for claims, net of
reinsurance, occurring during the:
Current year........................................................... 2,456 2,170
Prior years............................................................ 1,612 1,442
----- -----
Total paid, net of reinsurance........................................... 4,068 3,612

Foreign currency translation adjustments................................. 282 (205)
Other changes............................................................ 84 (16)
Net ending balance at December 31........................................ 7,431 6,756
Plus reinsurance recoverable........................................... 632 657
----- -----
GROSS ENDING BALANCE AT DECEMBER 31...................................... 8,063 7,413
===== =====

- ---------------

(1) Changes in composition of Group companies in 1995 relates to the acquisition
of Wellington.

The decrease in estimated losses and loss adjustment expenses for claims
occurring in prior years is mainly attributable to claims closed at amounts
lower than originally expected or by favorable reassessment of outstanding
reserves using the additional information made available during the current
calendar year. The main reassessments for these accident years were made in the
Netherlands and in the United States.

In the Netherlands, the legal requirements that enable citizens to make use
of governmental disability benefits have made it more difficult for individuals
to obtain such benefits. As these laws are also used in the regulation of
private disability insurance, it has become more difficult to obtain disability
benefits. As a result, portions of the disability claims reserves were released
in 1996 and in 1995.

In 1996 and 1995, the operations in the United States experienced favorable
runoff of workers' compensation and personal auto liability loss and loss
adjustment expenses provisions and to a lesser extent favorable runoff of
commercial auto liability and commercial multi-peril provisions. Workers'
compensation cost containment programs continued to be effective during 1996 and
1995 and the book of business profiles has changed to include classes that are
less volatile in loss experience. Changes made to the IBNR (Incurred But Not
Reported) calculation process in 1993 have resulted in providing a more
conservative estimate of the initial IBNR liability.

ING Group had an outstanding balance of NLG 162 million at December 31,
1996 (NLG 123 million at December 31, 1995) relating to environmental and
asbestos claims of the insurance operations. In establishing the liability for
unpaid claims and claims adjustment expenses related to asbestos-related illness
and toxic waste cleanup, the management of ING Group considers facts currently
known and the

F-83
394

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

current state of the law and coverage litigation. Liabilities are recognized for
IBNR claims and for known claims (including the cost of related litigation) when
sufficient information has been developed to indicate the involvement of a
specific insurance policy, and management can reasonably estimate its liability.
In addition, liabilities are reviewed and updated continually. Developed case
law and adequate claims history do not exist for such claims, especially because
significant uncertainty exists about the outcome of coverage litigation and
whether past claims experience will be representative of future claims
experience.

8.10. FUNDS ENTRUSTED BY CUSTOMERS AND DEBT SECURITIES

The funds entrusted by customers relate to non-subordinated liabilities
(other than debt securities) to non-banks. The funds entrusted by customers are
as follows:

1996 1995
---------------------------- ----------------------------
DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN TOTAL
-------- ------- ------- -------- ------- -------

Non-interest bearing.................. 16,160 4,305 20,465 14,833 2,483 17,316
Interest bearing...................... 133,013 23,366 156,379 124,639 12,391 137,030
------- ------ ------- ------- ------ -------
TOTAL FUNDS ENTRUSTED................. 149,173 27,671 176,844 139,472 14,874 154,346
======= ====== ======= ======= ====== =======

No funds have been entrusted to ING Group by customers on terms other than
those prevailing in the normal course of business.

The debt securities relate to debentures and other issued debt securities
with either fixed interest rates or interest rates based on interest-rate
levels, such as certificates of deposit and accepted bills issued by ING Group,
except for subordinated items. ING Group does not have debt securities that are
issued on terms other than those available in the normal course of business. The
maturities of the debt securities are as follows:

1996 1995
--------------------------- ---------------------------
DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN TOTAL
-------- ------- ------ -------- ------- ------

Fixed rate debt securities
-- 1 year or less...................... 2,725 10,187 12,912 2,536 7,876 10,412
-- 2 years or less but over 1 year..... 2,076 138 2,214 2,236 113 2,349
-- 3 years or less but over 2 years.... 1,785 175 1,960 1,735 72 1,807
-- 4 years or less but over 3 years.... 2,036 20 2,056 1,346 14 1,360
-- 5 years or less but over 4 years.... 1,049 128 1,177 1,310 49 1,359
-- over five years..................... 5,835 7 5,842 4,560 -- 4,560
------ ------ ------ ------ ----- ------
Total fixed rate debt securities......... 15,506 10,655 26,161 13,723 8,124 21,847
------ ------ ------ ------ ----- ------
Floating rate debt securities
-- 1 year or less...................... 25 1,203 1,228 -- 2 2
-- 2 years or less but over 1 year..... 142 8 150 25 3 28
-- 3 years or less but over 2 years.... 125 6 131 137 3 140
-- 4 years or less but over 3 years.... -- -- -- 50 -- 50
-- 5 years or less but over 4 years.... -- 19 19 -- 4 4
-- over five years..................... -- 354 354 -- -- --
------ ------ ------ ------ ----- ------
Total floating rate debt securities...... 292 1,590 1,882 212 12 224
------ ------ ------ ------ ----- ------
Total debt securities.................... 15,798 12,245 28,043 13,935 8,136 22,071
====== ====== ====== ====== ===== ======

F-84
395

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

As of December 31, 1996, ING Group had unused lines of credit available for
the banking operations, including the payment of commercial paper borrowings
presented above as part of the debt securities, totalling NLG 4,024 million
(1995: NLG 4,808 million). The commercial paper programs of the insurance
operations are presented as part of Other liabilities, in Note 8.12.

8.11. DEPOSITS BY BANKS

The liability caption Banks includes non-subordinated debt to banks (other
than debt securities) in the Netherlands and abroad. As of December 31, deposits
by banks are as follows:

1996 1995
------------------------------- -------------------------------
DOMESTIC FOREIGN TOTAL DOMESTIC FOREIGN TOTAL
-------- ------- ------ -------- ------- ------

Non-interest bearing........... 1,270 1,679 2,949 1,188 681 1,869
Interest bearing............... 41,657 27,797 69,454 25,689 24,438 50,127
------ ------ ------ ------ ------ ------
TOTAL................ 42,927 29,476 72,403 26,877 25,119 51,996
====== ====== ====== ====== ====== ======

ING Group does not accept deposits on terms other than those available in
the normal course of business.

8.12. BORROWINGS

Maturities of borrowings presented as part of Other liabilities are as
follows:

AS OF DECEMBER 31, 1996
-------------------------------------------------------------------------
1997 1998 1999 2000 2001 THEREAFTER TOTAL
------ ------ ------ ------ ------ ---------- -------

Subordinated loans of Group
companies.................. 31 877 129 252 197 5,783 7,269
Debenture loans.............. 388 200 -- 463 63 1,780 2,894
Loans taken up............... 2,262 18 -- 28 5 655 2,968
Loans from credit
institutions............... 1,251 21 115 145 21 66 1,619
------ ------ ------ ------ ------ ------ ------
TOTAL........................ 3,932 1,116 244 888 286 8,284 14,750
====== ====== ====== ====== ====== ====== ======

AS OF DECEMBER 31, 1995
-------------------------------------------------------------------------
1996 1997 1998 1999 2000 THEREAFTER TOTAL
------ ------ ------ ------ ------ ---------- -------

Subordinated loans of Group
companies.................. 76 66 371 364 53 4,139 5,069
Debenture loans.............. -- 359 200 -- 284 1,815 2,658
Loans taken up............... 2,978 49 16 25 3 33 3,104
Loans from credit
institutions............... 756 98 28 109 127 131 1,249
------ ------ ------ ------ ------ ------ ------
TOTAL........................ 3,810 572 615 498 467 6,118 12,080
====== ====== ====== ====== ====== ====== ======

Commercial paper of the insurance operations, with a carrying value of NLG
1,145 million and NLG 1,665 million at December 31, 1996 and 1995, respectively,
is included in Other liabilities. Lines of credit of NLG 174 million and NLG 160
million support various commercial paper programs at December 31, 1996 and 1995,
respectively. The lines of credit were unused at December 31, 1996 and 1995.
Commercial paper borrowings of the banking operations are presented as part of
the Funds entrusted to and debt securities of the banking operations. See Note.
8.10.

F-85
396

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Debt issues are as follows:

BAL. SHEET BAL. SHEET
INTEREST MATURITY AMOUNT AMOUNT
TYPE OF ISSUE RATE DATE 1996 1995
---------------------------------------------- -------- -------- ---------- ----------

Group companies' subordinated loans........... 6.25% 1998 -- 224
5.83% 1998 435 --
9.13% 2002 388 396
8.63% 2002 394 392
7.25% 2002 350 350
5.75% 2002 348 321
5.30% 2003 174 160
7.21% 2003 150 --
7.21% 2003 150 150
6.00% 2004 254 235
7.68% 2004 100 100
8.00% 2004 218 218
7.52% 2005 136 136
5.38% 2005 522 481
7.13% 2005 109 109
7.57% 2005 100 100
6.25% 2006 1,000 --
7.25% 2006 261 --
6.00% 2007 117 --
4.66% 2015 232 241
Debentures loans.............................. 5.30% 1997 -- 200
6.30% 1998 200 200
6.40% 2000 203 187
3.00% 2000 154 --
6.40% 2000 106 --
7.10% 2004 1,000 1,000
6.30% 2005 250 250
7.00% 2005 279 257
6.30% 2009 250 250
Loans from credit institutions................ 5.90% 2000 139 119
Loans taken up................................ 5.60% 2003 506 --
5.60% 2003 115 --
Other issues maturing in 1997................. 3,932 3,810
Issues less than 100 million maturing beyond
1997........................................ 2,178 2,194
------ ------
TOTAL......................................... 14,750 12,080
====== ======

8.13. CONTINGENCIES

ING Group is party to pending or threatened lawsuits arising from the
normal conduct of its business. While it is not possible to forecast the outcome
of such litigation, management believes that the disposition of such lawsuits
will not have a material adverse effect on ING Group's financial position or
results of operations.

F-86
397

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.14. COMMITMENTS NOT APPEARING ON THE BALANCE SHEET

In order to meet the financial needs of its customers, ING uses
lending-related financial instruments. The contractual amount of these
instruments are not recorded as assets or liabilities on the balance sheet. For
these instruments, the contractual amount of the financial instruments
represents the maximum potential credit risk to which ING is exposed as defined
in SFAS no. 105, i.e. assuming that all counterparties failed completely to
perform according to the terms of the contracts and that any existing collateral
or security proved to be of no value. A summary of the contractual amounts of
these financial instruments is stated below:

1996 1995
------ ------
CONTRACT AMOUNTS

Guarantees................................................... 9,373 8,202
Irrevocable facilities....................................... 22,964 16,697
Irrevocable letters of credit................................ 5,622 3,915
Other........................................................ 2,035 1,000

Guarantees relate both to credit and non credit substitute guarantees.
Credit substitute guarantees are guarantees given by ING in respect of credit
granted to customers by a third party. Many of them are expected to expire
without being drawn and do not necessarily represent future cash outflows.

Irrevocable facilities mainly constitute unused portions of irrevocable
credit facilities granted to corporate clients. Many of these facilities are for
a fixed duration and bear a floating interest rate. Most of the unused portion
of irrevocable credit facilities are secured by assets or counterguarantees by
the central government and exempted bodies under the solvency directives.
Irrevocable facilities also include commitments made to purchase securities to
be issued by governments and private issuers.

Irrevocable letters of credit mainly ensure payments to a third party for a
customer's foreign and domestic trade transactions in order to finance a
shipment of goods. ING's credit risk in these transactions is limited since
these transactions are collateralized by the commodity being shipped and are for
a short duration.

Other contingent liabilities mainly relate to acceptances of bills and are
of a short term nature.

OPERATIONAL LEASE OBLIGATIONS (CONTRACTED AS A LESSEE)

ING Group has entered into operational lease agreements to provide for
office space, office equipment and vehicles. The amounts payable under
noncancellable lease agreements are as follows:

1997.................... 151
1998.................... 131
1999.................... 110
2000.................... 105
2001.................... 95
Thereafter.............. 401
-----
TOTAL................... 993
=====

Rental expense under these leases was approximately NLG 229 million and NLG
434 million in 1996 and 1995, respectively. Other off-balance sheet commitments
comprise commitments to investments in land and buildings amounting to NLG 799
million as at December 31, 1996 and NLG 968 million as at December 31, 1995.

F-87
398

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.15. DERIVATIVE FINANCIAL INSTRUMENTS

ING Group uses derivative financial instruments in the normal course of
business for end user and trading purposes. Derivatives are financial
instruments, which include forwards, futures, options and swaps, whose value is
based upon an underlying asset, index or reference rate. A derivative contract
may be traded on an exchange or over-the-counter ("OTC"). Exchange-traded
derivatives are standardized and include futures and certain option contracts
listed on exchanges. OTC derivative contracts are individually negotiated
between contracting parties and include caps, floors and swaps. Derivatives are
subject to various risks similar to those related to the underlying financial
instruments, including market, credit and liquidity risk. The risks of
derivatives should not be viewed in isolation but rather should be considered on
an aggregate basis along with risks related to ING Group's non-derivative
trading and other activities. ING Group manages derivative and non-derivative
risks on an aggregate basis as part of its firm-wide risk management policies.

Forward contracts are commitments to exchange currencies or to buy or sell
other financial instrument at specified future dates. Futures contracts are
similar to forwards; however, major exchanges act as intermediaries and require
daily cash settlement and collateral deposits.

Swap contracts are commitments to settle in cash at a specified future
date, based on differentials between specified financial indices as applied to a
notional principal amount. Generally, no cash is exchanged at the outset of the
contract and no principal payments are made by either party. Option contracts
give the purchaser, for a fee, the right, but not the obligation, to buy or sell
within a limited time a financial instrument or currency at a contracted price
that may also be settled in cash, based on differentials between specified
indices. Written options subject ING Group to market risk, but not to credit
risk, since the customer has already performed according to the terms of the
contract by paying a cash premium up front. ING Group defers recognition of
premiums received until the contract's maturity.

Market Risk. Market risk is the potential for changes in the value of
derivative financial instruments due to market changes, including interest and
foreign exchange rate movements and fluctuations in commodity and security
prices. Market risk is directly influenced by the volatility and the liquidity
in the markets in which the related underlying assets are traded.

Credit Risk. Credit risk is the possibility that a loss may occur due to
the failure of a counterparty to perform according to the terms of a contract.
ING Group's exposure to the credit risk associated with counterparty
non-performance is limited to the net replacement cost of OTC contracts in a
gain position. Options written do not give rise to counterparty credit risk
since they obligate the Group (not its counterparty) to perform. Exchange traded
financial instruments such as futures generally do not give rise to a
significant counterparty exposure due to the margin requirements of the
individual exchanges. For significant transactions, the Group's credit review
process includes an evaluation of the counterparty's creditworthiness, periodic
credit standing and obtaining collateral in certain circumstances. ING Group
does not require collateral from its highly rated institutional counterparties.
ING Group may require collateral from private client counterparties under
certain circumstances.

Liquidity Risk. Liquidity risk is the possibility that ING Group may not be
able to rapidly adjust the size of its derivative positions in times of high
volatility and financial stress at a reasonable cost. The liquidity of
derivative products is correlated to the liquidity of the underlying cash
instrument.

Under Dutch GAAP, ING Group accounts for derivatives used for trading
activity at market value. Changes in market value are recognized in current
period profits through Result from financial transactions. Realized gains and
losses are determined on the specific identification method and are recognized
currently in profits through Result from financial transactions.

Derivatives held for purposes other than trading are used generally for two
purposes -- to synthetically alter the interest rate characteristics of certain
core business assets and liabilities and to hedge

F-88
399

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

exposures to foreign currency exchange risk. Interest rate swaps are primarily
used to synthetically alter the interest rate characteristics of certain core
business assets and liabilities. Interest income and interest expense related to
these swaps are accrued and the net amount is recognized in current period
profits through Interest from banking operations. Unrealized gains and losses
are not recognized on the balance sheet. ING Group does not receive or pay fees
or commissions related to swap contracts.

ING Group's use of these instruments is modified from time-to-time in
response to changing market conditions as well as changes in the mix of the
related assets and liabilities. Realized gains and losses upon termination of
these swaps are deferred and amortized over a four-year period, which
approximates the average remaining life of the portfolio. Amortization is
recorded through Interest from banking operations. During 1996 and 1995,
interest rate swaps with a notional principal amount of NLG 22,200 million and
NLG 10,750, respectively were terminated. These terminations resulted in net
deferred gains of approximately NLG 518 million and NLG 225 million in 1996 and
1995, respectively. Total unamortized net deferred gains, including those
terminated in prior years, were approximately NLG 486 million and NLG 255
million at December 31, 1996 and 1995, respectively. Unamortized net deferred
gains are recorded in Other liabilities in the consolidated balance sheet.

Forward and option interest rate contracts held for other than trading
purposes are either carried at historical cost or at market value, depending on
the carrying value of the underlying asset or liability. The exchange rate
component of forwards is marked to market with changes in market value charged
to current period earnings. Premiums paid for purchased options are deferred and
recognized as an expense upon maturity of the related contracts. Initial margin
requirements of organized exchanges are accounted for as Other assets.

ING Group also uses swaps and forward currency contracts to hedge its
exposure to foreign exchange rate risk related to certain foreign currency
denominated assets and liabilities. These swaps and forward contracts are
carried at market value and are recorded as Other assets or Other liabilities in
the accompanying consolidated balance sheet. Changes in market values of these
swaps and forwards, hedging the foreign exchange rate risk, are recorded in
current period profits in Results from financial transactions. For swaps and
forward contracts which are designated as hedges of net investments in
subsidiaries with foreign currency exposure, changes in market values are
recorded in the revaluation reserve component of shareholders' equity.

TRADING ACTIVITY

ING Group trades derivative financial instruments on behalf of clients and
for proprietary positions. All derivative financial instruments held for trading
purposes are reported at fair value and the changes in fair value are recorded
as they occur, as part of the Results from financial transactions in Other
income.

The following is a summary of ING Group's revenue in respect of derivative
financial instruments held for trading purposes for the years ended December 31:

1996 1995
---- ----

Interest rate contracts.................................................. 6 62
Currency contracts....................................................... (16) 8
Other contracts.......................................................... (29) (14)
--- ---
Total.................................................................... (39) 56
=== ===

F-89
400

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The following table reflects the notional amounts, gross fair values and
balance sheet amounts of trading derivative financial instruments. All
significant intercompany contracts have been excluded. The ending net fair value
is included on the consolidated balance sheet under Other assets.

1996
--------------------------------------------------------
AVERAGE ENDING
---------------------- ----------------------
NOTIONAL POSITIVE NEGATIVE POSITIVE NEGATIVE
AMOUNT FAIR VALUE FAIR VALUE FAIR VALUE FAIR VALUE
-------- ---------- ---------- ---------- ----------

INTEREST-RATE CONTRACTS
OTC -- swaps... 158,006 2,471 2,187 3,306 2,774
-- forwards... 51,393 31 9 84 16
-- options... 15,534 62 29 121 35
Listed -- options... 2,741 21 8 16 8
-- futures... 18,354 486 485 -- 454
CURRENCY CONTRACTS
OTC -- swaps... 10,669 85 204 142 300
-- forwards... 21,812 1,190 1,207 641 790
-- options... 5,150 9 8 17 13
-- other... -- -- -- -- --
Listed -- options... 89 -- -- -- --
-- futures... 2,528 4 3 -- 4
OTHER CONTRACTS
OTC........... 15,265 389 679 422 740
Listed........ 4,111 344 1,698 76 1,469
------- ----- ----- ----- -------
305,652 5,092 6,517 4,825 6,603
======= ===== ===== ===== =======

1995
--------------------------------------------------------
AVERAGE ENDING
---------------------- ----------------------
NOTIONAL POSITIVE NEGATIVE POSITIVE NEGATIVE
AMOUNT FAIR VALUE FAIR VALUE FAIR VALUE FAIR VALUE
-------- ---------- ---------- ---------- ----------

INTEREST-RATE CONTRACTS
OTC -- swaps... 115,997 1,793 1,737 2,901 2,356
-- forwards... 21,621 15 16 30 17
-- options... 16,177 68 66 97 74
Listed -- options... 488 -- -- -- --
-- futures... 18,578 -- -- 2 --
CURRENCY CONTRACTS
OTC -- swaps... 5,890 80 112 100 165
-- forwards... 25,298 280 176 252 181
-- options... 2,544 1 6 1 5
-- other... 915 16 68 16 68
Listed -- options... 2 -- -- -- --
-- futures... -- -- -- -- --
OTHER CONTRACTS
OTC........... 2,241 80 -- 82 --
Listed........ 111 -- -- -- --
------- ----- ----- ----- -----
209,862 2,333 2,181 3,481 2,866
======= ===== ===== ===== =====

END-USER ACTIVITY

ING Group's principal objective in holding or issuing derivatives for
purposes other than trading is interest rate risk management. The operations of
ING Group are subject to a risk of interest rate fluctuations to the extent that
there is a difference between the amount of interest-earning assets and the
amount of interest-bearing liabilities that mature or reprice in specified
periods. The principal objective of ING Group's asset/liability management
activities is the management of interest rate risk and liquidity within
parameters established by various management committees and approved by the
Executive Board. To achieve its risk management objective, ING Group uses a
combination of interest rate instruments, primarily interest rate swaps. When
ING Group purchases foreign currency denominated debt or has foreign net
investments, it subjects itself to changes in value as exchange rates move.
These fluctuations are managed by entering into currency swaps, forwards and
options.

F-90
401

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The following table reflects the notional principal amounts and fair value
of derivative financial instruments used for interest rate management. All
significant intercompany contracts have been excluded.

1996 1995
----------------------------------- -----------------------------------
ENDING FAIR VALUE ENDING FAIR VALUE
NOTIONAL ---------------------- NOTIONAL ----------------------
AMOUNTS ASSETS LIABILITIES AMOUNTS ASSETS LIABILITIES
-------- ------ ----------- -------- ------ -----------

INTEREST-RATE CONTRACTS
OTC -- swaps............. 127,709 4,026 4,384 125,858 3,166 3,582
-- forwards.......... 21,219 28 31 17,219 4 84
-- options........... 962 20 -- 6,709 71 30
Listed -- options........... 2,591 17 -- -- -- --
-- futures........... 13 -- -- -- -- --
CURRENCY CONTRACTS
OTC -- swaps............. 6,984 309 368 3,857 283 260
-- forwards.......... 119,060 1,395 1,886 87,449 755 759
-- options........... 5,940 54 42 2,609 58 49
-- other............. -- -- -- 1 -- --
OTHER CONTRACTS
OTC.......................... 2,559 10 -- -- -- --
Listed....................... 204 1 5 35 2 1
------- ----- ----- ------- ----- -----
287,241 5,860 6,716 243,737 4,339 4,765
======= ===== ===== ======= ===== =====

End-user Contracts:

NOTIONAL PRINCIPAL PERCENTAGE OF 1996 AMOUNT MATURING
AMOUNTS ----------------------------------------------
------------------- WITHIN 1 1 TO 5
1996 1995 YEAR YEARS THEREAFTER TOTAL
------- ------- -------- ------ ---------- -------

Interest Rate Contracts... 152,494 149,786 18.08% 21.51% 13.50% 53.09%
Currency contracts........ 131,984 93,916 43.58% 1.14% 1.23% 45.95%
Other contracts........... 2,763 35 0.18% 0.67% 0.11% 0.96%
------- ------- ------ ------ ------ -------
TOTAL..................... 287,241 243,737 61.84% 23.32% 14.84% 100.00%
======= ======= ====== ====== ====== =======

F-91
402

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

End-user Interest Rate Swaps:

NOTIONAL AMOUNTS OF CONTRACTS MATURING AS OF DECEMBER 31, 1996
---------------------------------------------------------------
WITHIN 1 YEAR 1 TO 5 YEARS THEREAFTER TOTAL
------------- ------------ ---------- -------

RECEIVED FIXED SWAPS
Notional amounts................... 16,758 22,264 21,295 60,317
Weighted average received rate..... 6.30% 6.90% 6.25% 6.50%
Weighted average paid rate......... 5.11% 4.08% 3.59% 4.19%
PAY FIXED SWAPS
Notional amounts................... 13,231 36,034 17,238 66,503
Weighted average received rate..... 3.31% 3.93% 3.57% 3.72%
Weighted average paid rate......... 6.01% 6.23% 7.05% 6.40%
OTHER SWAPS
Notional amounts................... 201 688 -- 889
Weighted average received rate..... 3.03% 5.47% -- 4.92%
Weighted average paid rate......... 2.58% 5.57% -- 4.90%
------ ------- ------ -------
TOTAL................................ 30,190 58,986 38,533 127,709
====== ======= ====== =======

All rates were those in effect at December 31, 1996. Variable rates are
primarily based on LIBOR and may change significantly, affecting future cash
flows.

F-92
403

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.16. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the estimated fair values of ING Group's
financial instruments.

1996 1995
---------------------------- ----------------------------
ESTIMATED BALANCE SHEET ESTIMATED BALANCE SHEET
FAIR VALUE VALUE FAIR VALUE VALUE
---------- ------------- ---------- -------------

FINANCIAL ASSETS
Participating interests............... 3,982 3,609 3,260 3,032
Investments
Shares and convertible
debentures....................... 26,390 26,390 19,754 19,754
Fixed-interest securities other
than mortgage and policy loans... 107,296 101,430 84,075 80,163
Mortgage and policy loans.......... 27,026 25,706 24,046 23,150
Lending(1)............................ 195,793 189,297 162,562 155,912
Banks................................. 38,325 37,353 34,617 34,531
Cash.................................. 3,078 3,078 2,387 2,387
Other assets
Securities and options............. 22,576 22,453 14,873 14,822
Other receivables.................. 10,388 10,388 7,044 7,044
Accrued assets(2)..................... 8,036 8,036 6,332 6,332
FINANCIAL LIABILITIES
Subordinated loan..................... 1,268 1,068 1,267 1,068
Insurance provisions related to
investment-type contracts.......... 9,692 9,676 7,854 7,810
Funds entrusted to and debt securities
of the banking operations.......... 207,755 204,885 177,704 176,417
Banks................................. 73,372 72,403 52,799 51,996
Other liabilities..................... 32,902 32,038 23,944 23,672
Accrued liabilities................... 13,935 13,935 9,057 9,057
DERIVATIVE FINANCIAL INSTRUMENTS HELD
FOR RISK MANAGEMENT
Assets................................ 5,860 2,628 4,339 1,372
(Liabilities)......................... (6,716) (3,338) (4,765) (1,523)

- ---------------
(1) Lending excludes receivables from leases, as under SFAS 107, fair values of
leases receivables are not required to be estimated.

(2) In accordance with SFAS 107, fair values are not estimated for deferred
acquisition costs of insurance policies.

1996 1995
--------------------- ---------------------
RISK RISK
WEIGHTED CONTRACT WEIGHTED CONTRACT
VALUE AMOUNT VALUE AMOUNT
-------- -------- -------- --------

OTHER OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
Guarantees...................................... 4,070 9,373 3,626 8,202
Irrevocable letters of credit................... 1,955 5,622 1,181 3,915
Irrevocable facilities.......................... 4,958 22,964 4,920 16,697
Other........................................... -- 2,035 -- 1,000

F-93
404

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The following methods and assumptions were used by ING Group to estimate
the fair value of the financial instruments.

FINANCIAL ASSETS

Participating interests: The fair values of the shares of participating
interests are based on quoted market prices or, if unquoted, at estimated market
values based on quoted prices for similar securities. Fair values of the
receivables from participating interests are determined using the same methods
as described below for fixed-interest securities.

Investments: The fair values for shares and convertible debentures are
based on quoted market prices or, if unquoted, at estimated market value
generally based on quoted prices for similar securities.

Fair values for fixed-interest securities other than mortgage and policy
loans are based on quoted market prices, where available. For those securities
not actively traded, fair values are estimated using values obtained from
private pricing services or by discounting expected future cash flows using a
current market rate applicable to the yield, credit quality and maturity of the
investment.

The fair values for mortgage loans are estimated by discounting future cash
flows using interest rates currently being offered for similar loans to
borrowers with similar credit ratings.

The fair values for fixed rate policy loans are estimated by discounting
cash flows at the interest rates charged on policy loans of similar policies
currently being issued. Loans with similar characteristics are aggregated for
purposes of the calculations. The fair values of variable rate policy loans
approximate their carrying values.

Lending: For loans that reprice frequently and have had no significant
changes in credit risk, carrying amounts represent a reasonable estimate of fair
values. The fair values of other loans are estimated by discounting expected
future cash flows using interest rates offered for similar loans to borrowers
with similar credit ratings. The fair values of non-performing loans have been
estimated by discounting the expected cash flows of recoveries.

Banks: The fair values of receivables from banks are estimated based on
discounting future cash flows using available market interest rates offered for
receivables with similar characteristics.

Cash: The carrying amount of cash approximates its fair value.

Other assets: The fair values of securities and options are based on
quoted market prices, where available. For those securities not actively traded,
fair values are estimated based on internal discounted cash flow pricing models
taking into account current cash flow assumptions and the counterparties' credit
standings.

The carrying amount of other receivables approximate the fair value.

Accrued assets: The carrying amount of accrued assets approximates the
fair value.

FINANCIAL LIABILITIES

Subordinated Loan: The fair value of the subordinated loan is estimated
using discounted cash flows based on interest rates charged on similar
instruments.

Insurance Provisions Related to Investment-type Contracts (included in
Insurance Provisions): For guaranteed investment contracts the fair values have
been estimated using a discounted cash flow approach based on interest rates
currently being offered for similar contracts with maturities consistent with
those remaining for the contracts being valued. For other investment-type
contracts, fair values are estimated based on the cash surrender values.

F-94
405

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

Funds Entrusted to and Debt Securities of the Banking Operations: As
required by SFAS No. 107, the fair values of demand deposits and other deposits
with no stated maturity approximates their carrying values. The fair values of
other deposits with stated maturities are estimated based on discounting future
cash flows using the rates currently offered for deposits of similar maturities.

Banks: The fair values of payables to banks are estimated based on
discounting future cash flows using available market interest rates for payables
with similar characteristics.

Other Liabilities: For publicly traded debt, the fair values are based on
quoted market prices. For non-traded, variable-rate debt, the carrying amounts
approximate the fair values. For non-traded, fixed-rate debt, the fair values
are estimated using discounted cash flow calculations based on interest rates
charged on similar instruments currently being issued.

Accrued Liabilities: The carrying amount of accrued liabilities
approximates the fair value.

DERIVATIVE FINANCIAL INSTRUMENTS HELD FOR RISK MANAGEMENT

Fair values of off-balance sheet derivative financial instruments are based on
broker/dealer valuations or on internal discounted cash flow pricing models
taking into account current cash flow assumptions and the counterparties' credit
standings. The fair values of off-balance sheet derivative financial instruments
generally reflect the estimated amounts that ING Group would receive or pay to
terminate the contracts at the reporting date.

OTHER OFF-BALANCE SHEET FINANCIAL INSTRUMENTS

Risk weighted amounts have been calculated in accordance with the Dutch Central
Bank guidelines which are based on the EC solvency ratio directives.

In view of the lack of an established market and the difficulties involved
in separating the value of these instruments from their underlying degree of
uncertainties the directors believe that it is not meaningful to provide an
estimate of the fair value for these instruments.

8.17. CONCENTRATIONS OF CREDIT RISK

Concentrations of credit risk exist when changes in economic, industry or
geographic factors similarly affect groups of counterparties whose aggregate
credit exposure is material in relation to ING Group's total credit exposure.
Although ING Group's portfolio of financial instruments is broadly diversified
along industry and product lines, material transactions are completed with other
financial services companies. Additionally, mortgages and loans in the
Netherlands represent areas of significant credit exposures.

8.18. REINSURANCE

ING Group is involved in both ceded and assumed reinsurance for the purpose
of diversifying risk and limiting exposure on large risks. The effects of
reinsurance on premiums written and earned are illustrated below.

1996 PREMIUMS WRITTEN 1995 PREMIUMS WRITTEN
-------------------------- --------------------------
NON-LIFE LIFE TOTAL NON-LIFE LIFE TOTAL
-------- ------ ------ -------- ------ ------

Direct Premiums Written, gross........... 7,003 16,733 23,736 6,465 14,369 20,834
Reinsurance Assumed Premiums Written,
gross.................................. 184 402 586 202 475 677
----- ----- ----- ----- ------ ------
Total Gross Written Premiums............. 7,187 17,135 24,322 6,667 14,844 21,511
Reinsurance Ceded........................ 583 499 1,082 566 526 1,092
----- ----- ----- ----- ------ ------
NET PREMIUMS WRITTEN..................... 6,604 16,636 23,240 6,101 14,318 20,419
===== ===== ===== ===== ====== ======

F-95
406

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

PREMIUMS EARNED
---------------------
1996 1995
-------- --------
NON-LIFE NON-LIFE
-------- --------

Direct Premiums Earned, gross............................................. 6,838 6,359
Reinsurance Assumed Premiums Earned, gross................................ 190 204
----- -----
Total Gross Premiums Earned............................................... 7,028 6,563
Reinsurance Ceded......................................................... 599 594
----- -----
NET PREMIUMS EARNED....................................................... 6,429 5,969
===== =====

Non-life assumed reinsurance is largely related to ING Group's compulsory
participation in pools and industry associations. Reinsurance is ceded on both a
proportional and an excess of loss basis. The retention per risk on the non-life
business is interrelated with the excess of loss coverages, resulting at
December 31, 1996 and 1995 in a maximum exposure per risk of NLG 10 million.

Life assumed reinsurance is largely related to group pension contracts in
the Netherlands and to individual term insurance (yearly renewable term and
coinsurance) in the United States. In managing the life risk exposure, ING Group
has set limits for acceptance of risk on life insurance policies at various
levels up to NLG 2.9 million and NLG 2.7 million at December 31, 1996 and 1995,
respectively. The excess is ceded to outside parties.

To the extent that the assuming reinsurers are unable to meet their
obligations under these treaties, ING Group remains liable to its policyholders
for the portion reinsured. Consequently, provisions are established for
reinsurance recoverable amounts which are deemed uncollectible. To minimize its
exposure to significant losses from reinsurer insolvencies, ING Group evaluates
the financial condition of its reinsurers and monitors concentrations of credit
risk arising from similar geographic regions, activities, or economic
characteristics of the reinsurer. As of December 31, 1996 and 1995, the
receivables from reinsurers amounted to NLG 373 million and NLG 518 million,
respectively, of which NLG 12 million and NLG 11 million, respectively, was
provided for uncollectible reinsurance.

8.19. INCOME FROM INVESTMENTS OF THE INSURANCE OPERATIONS

1996 1995
------ -----

Income from land and buildings.......................................... 803 788
Income from equity securities........................................... 961 778
Income from fixed-interest securities
-- Debentures......................................................... 3,202 2,591
-- Private loans...................................................... 1,100 1,054
-- Mortgage Loans..................................................... 1,765 1,634
-- Policy loans....................................................... 121 118
-- Deposits with credit institutions.................................. 233 15
-- Professional loans................................................. 37 36
-- Other.............................................................. 536 521
Deposits with insurers.................................................. -- 222
Income from investments for risk of policyholders and from investments
of annual life funds.................................................. 2,315 1,848
----- -----
11,073 9,605
Intercompany eliminations............................................... (141) (138)
----- -----
10,932 9,467
===== =====

F-96
407

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

8.20. INTEREST INCOME AND EXPENSE OF THE BANKING OPERATIONS

This item includes the interest income and expense, results from interest
rate arbitrage, results from financial instruments, to the extent that these
serve to limit the interest-rate risk, and lending commissions.

ANALYSIS OF INTEREST INCOME

1996 1995
------ ------

Interest income on loans............................................. 15,724 15,060
Interest income suspended............................................ (135) (166)
------ ------
Net interest income on loans......................................... 15,589 14,894
Origination fees and loan servicing fees............................. 250 256
Interest income on investment securities............................. 2,596 2,019
Interest income on trading portfolio................................. 635 438
Other interest income................................................ 1,185 764
------ ------
TOTAL INTEREST INCOME................................................ 20,255 18,371
====== ======

ANALYSIS OF INTEREST EXPENSE

1996 1995
------ ------

Interest on deposits by banks........................................ 2,895 2,677
Interest on funds entrusted.......................................... 5,628 5,881
Interest on debt securities.......................................... 2,088 1,904
Interest on subordinated loans....................................... 367 254
Other interest expense............................................... 2,026 1,397
------ ------
TOTAL INTEREST EXPENSE............................................... 13,004 12,113
====== ======

1996 1995
------ ------

Net interest income.................................................. 7,251 6,258
Intercompany eliminations............................................ 109 104
------ ------
NET INTEREST INCOME AFTER INTERCOMPANY ELIMINATIONS.................. 7,360 6,362
====== ======

8.21. BUSINESS SEGMENTS

ING Group, with its subsidiaries and affiliates, is a diversified, global
financial services company engaged in insurance and banking activities. ING
Group's staff at December 31, 1996 totalling 58,106 (including 28,694 outside of
the Netherlands) serves individuals, businesses, governments, and financial
institutions through its extensive international network of subsidiaries,
branches, offices and agencies in 58 countries throughout the world.

In the Netherlands, ING Group is the largest life insurer and the second
largest non-life insurer. In excess of 50% of ING Group's insurance income is
generated in the Netherlands. Outside the Netherlands, the international
insurance operations concentrate primarily on servicing individuals and
small-to-medium size enterprises in regional and national markets, and several
of ING Group's insurance companies are among the leading players in several life
and pension markets.

In the Netherlands, ING Group is the third largest bank and is a leader in
personal and corporate banking as well as in property investment, development
and finance. In excess of 66% of ING Group's banking income is generated in the
Netherlands. The international banking operations specialize in emerging
corporate and investment banking markets. ING Group also plays a key role in
international trade and commodity activities.

F-97
408

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The following tables present certain information regarding ING Group's
industry segments of insurance and banking and relevant geographic information.
The information has been prepared in accordance with Dutch GAAP.

BUSINESS DISTRIBUTION

1996 1995 1994
------- ------- ------

INCOME:
Life Insurance........................................... 25,014 21,403 19,445
Non-life insurance....................................... 7,124 6,613 6,438
Insurance-general........................................ 3,729 3,464 3,041
------ ------ ------
Total Insurance................................ 35,867 31,480 28,924
Banking.................................................. 11,716 9,757 8,167
Eliminations............................................. (32) (34) (43)
------ ------ ------
TOTAL.......................................... 47,551 41,203 37,048
====== ====== ======
RESULT BEFORE TAXATION:
Life Insurance........................................... 1,207 1,097 953
Non-life insurance....................................... 437 339 295
Insurance-general........................................ 854 670 586
------ ------ ------
Total Insurance................................ 2,498 2,106 1,834
Banking.................................................. 2,133 1,752 1,509
Dividend on own shares................................... (72) (58) (51)
------ ------ ------
TOTAL.......................................... 4,559 3,800 3,292
====== ====== ======
NET PROFIT:
Life Insurance........................................... 912 797 684
Non-life insurance....................................... 330 245 211
Insurance-general........................................ 648 485 419
------ ------ ------
Total Insurance................................ 1,890 1,527 1,314
Banking.................................................. 1,503 1,180 1,039
Dividend on own shares................................... (72) (58) (51)
------ ------ ------
TOTAL.......................................... 3,321 2,649 2,302
====== ====== ======
IDENTIFIABLE ASSETS:
Insurance................................................ 167,221 143,459
Banking.................................................. 325,419 261,935
Corporate................................................ 40,103 29,304
Eliminations............................................. (48,845) (38,434)
------ ------
TOTAL.......................................... 483,898 396,264
====== ======

F-98
409

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

GEOGRAPHIC DISTRIBUTION

1996 1995 1994
------- ------- ------

INCOME:
The Netherlands.......................................... 26,125 23,750 21,337
Rest of Europe........................................... 5,277 4,223 2,731
North America............................................ 10,366 8,936 8,581
South America............................................ 698 512 822
Asia..................................................... 2,096 1,839 1,466
Australia................................................ 2,939 1,901 2,202
Other.................................................... 345 340 298
Eliminations............................................. (295) (298) (389)
------ ------ ------
TOTAL.......................................... 47,551 41,203 37,048
====== ====== ======
RESULT BEFORE TAXATION:
The Netherlands.......................................... 3,954 3,469 3,010
Rest of Europe........................................... 473 402 118
North America............................................ 653 660 461
South America............................................ 306 95 478
Asia..................................................... 265 226 163
Australia................................................ 97 73 123
Other.................................................... 13 23 25
Value adjustments to receivables of banking operations... (1,130) (1,090) (1,035)
Dividend on own shares................................... (72) (58) (51)
------ ------ ------
TOTAL.......................................... 4,559 3,800 3,292
====== ====== ======
NET PROFIT:
The Netherlands.......................................... 2,947 2,400 2,045
Rest of Europe........................................... 236 275 6
North America............................................ 417 401 341
South America............................................ 281 108 417
Asia..................................................... 168 165 117
Australia................................................ 82 63 96
Other.................................................... (3) 4 4
Value adjustments to receivables of banking operations... (735) (709) (673)
Dividend on own shares................................... (72) (58) (51)
------ ------ ------
TOTAL.......................................... 3,321 2,649 2,302
====== ====== ======
IDENTIFIABLE ASSETS:
The Netherlands.......................................... 430,688 352,563
Rest of Europe........................................... 10,568 8,869
North America............................................ 28,567 23,392
South America............................................ 738 619
Asia..................................................... 4,452 3,758
Australia................................................ 10,236 7,672
Other.................................................... 1,345 1,284
Eliminations............................................. (2,696) (1,893)
------ ------
TOTAL.......................................... 483,898 396,264
====== ======

F-99
410

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

The life insurance segment includes individual and group life insurance,
annuities, pensions and investment products. The non-life insurance segment
includes accident and health and property and casualty products.
Insurance-general largely includes unallocated investment income which results
from investment income earned on shareholders' equity.

The banking segment includes consumer and commercial banking, investment
banking, securities brokerage and certain asset management activities.

The corporate expenses are allocated to the insurance and banking segments
and geographic areas based on time expended by head office personnel or relative
number of staff.

8.22. BUSINESS COMBINATIONS

The most significant business combinations of 1996 related to the
acquisition of majority interests in the Polish commercial bank Bank Slaski S.A.
and in Bank Mendes Gans N.V., a Dutch bank specializing in providing funds
transfer services for multinationals. Additionally, the principal assets and
liabilities of Dunabank in Hungary and Pacific Mutual in Australia were
acquired. The total purchase price of these acquisitions was NLG 585 million.
Furthermore, some smaller companies were acquired during 1996.

On March 5, 1995, ING Group acquired the principal assets and liabilities
of the British investment bank Barings Group, including the Baring Brothers &
Co. and Baring Securities operations and the activities of Baring Asset
Management, for a cash consideration of L 1. ING Group made an additional
capital contribution of NLG 1,677 million in order to meet minimum solvency
requirements. Other acquisitions in 1995 included the Canadian non-life insurer
Wellington Insurance Company, the Australian distribution network Le Fort, among
others. The total purchase price of these acquisitions amounted to NLG 318
million.

Under both Dutch and U.S. GAAP, the business combinations of 1996 and 1995
were accounted for under the purchase method of accounting. The results of the
operations of the various acquired companies have been included in ING Group's
consolidated results of operations since their respective dates of acquisition.
Acquisitions made in 1996 and 1995, individually and in the aggregate, had no
significant impact on the reported net profit for 1996 and 1995 or on the
financial position of ING Group at December 31, 1996 and 1995.

Under Dutch GAAP, goodwill arising from acquisitions is directly charged to
shareholders' equity in the respective years when the acquisitions take place.
Accordingly, goodwill charged to shareholder's equity under Dutch GAAP amounted
to NLG 450 million and NLG 1,578 in 1996 and 1995, respectively.

For the purpose of the reconciliation of Dutch to U.S. GAAP, ING Group's
accounting policy is to capitalize and amortize goodwill on a straight-line
basis over a period not exceeding 20 years. Pursuant to this policy, goodwill
paid on the 1996 and 1995 acquisitions will be amortized over a period of 5 to
20 years. Goodwill paid in connection with the Barings Group acquisition will be
amortized over a period of 10 years. Additionally, some of the provisions for
pre-acquisition contingencies made pursuant to Dutch GAAP are not allowed under
U.S. GAAP and as a result, the amounts of goodwill recognized for U.S. GAAP
purposes differ from the amounts recognized under Dutch GAAP. Goodwill
capitalized for U.S. GAAP purposes in 1996 and 1995 amounted to NLG 431 million
and NLG 1,442 million, respectively.

8.23. DIVIDEND RESTRICTIONS

ING Group and its Dutch subsidiaries are subject to legal restrictions on
the amount of dividends they can pay to their shareholders. The Dutch Civil Code
contains the restriction that dividends can only be paid up to an amount equal
to the excess of the company's own funds over the sum of (i) the paid-up
capital, and (ii) reserves required by law. Additionally, certain of ING Group's
subsidiaries are subject to

F-100
411

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

restrictions on the amount of funds they may transfer in the form of cash
dividends or otherwise to the parent company.

In addition to the restrictions in respect of minimum capital and solvency
requirements that are imposed by industry regulators in the countries in which
the subsidiaries operate, other limitations exist in certain countries. The most
significant restrictions for ING Group are related to the insurance operations
located in the United States, which are subject to limitations on the payment of
dividends to the parent company imposed by the Insurance Commissioner of the
state of domicile. For life, accident and health subsidiaries, dividends are
generally limited to the greater of 10% of statutory surplus or the statutory
net gain from operations. For the property and casualty subsidiaries, dividends
are limited to a specified percentage of the previous year's shareholders'
equity or previous year's net investment gains, which varies by state. Dividends
paid in excess of these limitations require prior approval of the Insurance
Commissioner of the state of domicile.

The management of ING Group does not believe that these limitations will
affect the ability of ING Group to pay dividends to its shareholders in the
future.

8.24. MINIMUM CAPITAL REQUIREMENTS

In accordance with European Union directives, insurance enterprises
organized in European Union member countries are required to maintain minimum
solvency margins. The solvency margin is required to be at least equal to 16% of
gross premiums written in the prior year for property and casualty companies and
generally 4% of insurance reserves (1% of separate accounts reserves) plus 0.3%
of the amount at risk under insurance policies for life insurers. As of December
31, 1996, the solvency margin of the insurance operations of ING Group computed
in accordance with this directive amounted to NLG 5,956 million. These companies
held capital and surplus, as of December 31, 1996, of NLG 25,363 million.

The banking operations of ING Group are regulated by the Dutch Central
Bank. The solvency requirements of the banking activities of ING Group depend on
the degree of risk involved in the various banking operations. The related
assets are assigned a weighting coefficient. The total risk (weighted value of
both on- and off-balance sheet items) is divided into actual own funds to obtain
a ratio. Internationally, it has been agreed that the "BIS" (Bank for
International Settlements) ratio must be at least 8%. As of December 31, 1996,
the banking subsidiaries of ING Group that are governed by these rules were
required to maintain NLG 17,243 million on a total of NLG 23,343 million
admitted assets and equity elements, which produces a BIS ratio of 10.83%
(December 31, 1995: 11.01%).

8.25. STOCK OPTION PLAN

The ordinary share capital may increase as a result of exercised Option
rights granted to a number of senior executives. Participation in the Stock
Option plan is possible for members of the Executive Board, members of the
Executive Committees, members of the ING Group Management Council and other key
staff persons who have been admitted by the Executive Board to this plan. This
Option plan shall run until January 1, 1998 and may be extended by the Executive
Board. Option rights already granted and the Option rights acquired under this
plan shall remain valid after termination of this option plan. The Executive
Board fixes annually, for every participant, the amount that may be used to
acquire Options on depositary receipts for ING Group shares. For this purpose,
an Option entitles the holder to one Bearer Receipt for ING Group Ordinary
Shares.

Option rights are exercisable over a period of five years, starting from
the date on which the option rights are granted, which is also the date on which
the exercise price is established. The exercise price corresponds to the market
value of the stock at the date the options are granted.

F-101
412

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

ING has adopted the disclosure-only provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation".
Accordingly, no compensation cost has been recognized for the stock option plan.
The effect of applying the fair value method at the grant date of the awards
would not result in a net income and earnings per share that are materially
different from the amounts reported for 1996 and 1995 respectively. The fair
value of options at the date of the grant was estimated for these purposes using
the Binomial Model with the following weighted average assumptions:

1996 1995
---------- ----------

Risk-free interest rate............................ 4.70% 5.05%
Expected life (years).............................. 4.35 4.36
Expected volatility................................ 18.10% 16.40%
Expected dividends................................. 3.04% 4.17%

Information with respect to stock based compensation activity for the years
1996 and 1995 is as follows:

1996 1995
-------------------- --------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
PRICE OF PRICE OF
NUMBER OF OPTIONS NUMBER OF OPTIONS
OPTIONS NLG OPTIONS NLG
--------- -------- --------- --------

Stock options:
-- Outstanding as of January 1........... 1,515,593 29.54 259,218 28.82
-- Granted during the year............... 882,708 51.78 1,369,385 31.56
-- Exercised during the year............. (892,946) 29.53 (113,010) 31.56
--------- ----- --------- -----
-- Outstanding as of December 31......... 1,505,355 42.01 1,515,593 29.54
========= ===== ========= =====
Exercisable as of December 31.............. 1,505,355 42.01 1,515,593 29.54

There were no cancellation or expiry of option grants during 1996 and 1995.
As of December 31, 1996 1,505,355 shares were authorized for future grants.

The following table summarizes information about stock options outstanding
as of December 31, 1996:

WEIGHTED
OPTIONS AVERAGE WEIGHTED OPTIONS WEIGHTED
RANGE OF OUTSTANDING REMAINING AVERAGE EXERCISABLE AVERAGE
EXERCISE AS OF CONTRACTUAL EXERCISE AS OF EXERCISE
PRICE 12/31/96 LIFE PRICE 12/31/96 PRICE
- ----------- ----------- ----------- -------- ----------- --------

25.53-51.80 1,505,355 3.92 years 42.01 1,505,355 42.01

F-102
413

PRINCIPAL GROUP COMPANIES
UNLESS OTHERWISE STATED, THE PARTICIPATING INTEREST IS 100%, OR ALMOST 100%

COMPANIES TREATED AS PART OF THE INSURANCE OPERATIONS

THE NETHERLANDS
ING Verzekeringen N.V. The Hague
Nationale-Nederlanden Levensverzekering
Maatschappij N.V. Rotterdam
Postbank Levensverzekering N.V. The Hague
RVS Levensverzekering N.V. Rotterdam/Ede
Tiel Utrecht Levensverzekering N.V. Utrecht
Tiel Utrecht Verzekerd Sparen N.V. Utrecht
Nationale-Nederlanden Schadeverzekering Maatschappij
N.V. The Hague
Nationale-Nederlanden Zorgverzekering N.V. The Hague
N.V. Nationale Borg-Maatschappij Amsterdam
Postbank Schadeverzekering N.V. The Hague
RVS Schadeverzekering N.V. Rotterdam/Ede
Tiel Utrecht Schadeverzekering N.V. Utrecht
Algemene Zeeuwse Verzekering Maatschappij N.V. Middelburg
ING Vastgoed Belegging B.V. The Hague
Parcom Ventures B.V. Utrecht

REST OF EUROPE
Nationale-Nederlanden Polska S.A. Warsaw, Poland
RVS Verzekeringen N.V. Brussels, Belgium
De Vaderlandsche N.V. Antwerp, Belgium
ING Magyarorszagi Biztosito Rt. Budapest, Hungary
Nationale-Nederlanden Poist'ovna A.S. Bratislava, Slovakia

NORTH AMERICA
ING America Insurance Holdings, Inc. Wilmington, United States
ING North America Insurance Corporation Atlanta, United States
Life Insurance Company of Georgia Atlanta, United States
Southland Life Insurance Company Atlanta, United States
Security Life of Denver Denver, United States
The Halifax Insurance Company Toronto, Canada
NN Life Insurance Company of Canada Toronto, Canada
Le Groupe Commerce Compagnie d'Assurances Saint-Hyacinthe, Canada
La Compagnie d'Assurances Belair Montreal, Canada
The Netherlands Insurance Companies Keene, United States
ING Seguros, S.A. de C.V. Mexico City, Mexico

SOUTH AMERICA
FATUM/De Nederlanden van 1845 Schadeverzekering N.V. Curacao, Netherlands Antilles

ASIA
ING Indonesia Insurance P.T. (80%) Jakarta, Indonesia
Netherlands Life Insurance Company Ltd. Seoul, South Korea
ING Life Insurance Company Ltd. Japan Tokyo, Japan
ING Life Insurance Co. (Philippines) Manila, Philippines

F-103
414

AUSTRALIA
Mercantile Mutual Holdings Limited Sydney, Australia

REINSURANCE COMPANIES
Nationale-Nederlanden Herverzekering Maatschappij N.V. The Hague

BRANCH OFFICES
In addition, subsidiaries of ING Verzekeringen have branches in Greece, Italy, Romania,
Spain, the Czech Republic, Aruba, Argentina, Brazil, China, Hong Kong, New Zealand, Singapore
and Taiwan.

COMPANIES TREATED AS PART OF THE BANKING OPERATIONS

THE NETHERLANDS
Assurantiebedrijf ING Bank N.V. Amsterdam
Bank Mendes Gans N.V. (59.07%) Amsterdam
Crediet en Effectenbank N.V. (CenE) Utrecht
CW Lease Nederland B.V. 's-Hertogenbosch
Extra Clearing B.V. Amsterdam
ING Bank N.V. Amsterdam
ING Bank Corporate Investments B.V. Amsterdam
ING Bank Trust (Nederland) B.V. Amsterdam
ING Lease Holding N.V. Amsterdam
ING Lease Nederland B.V. Amsterdam
ING Vastgoed B.B.V. Amsterdam
ING Investment Bank B.V. Amsterdam
Interadvies N.V. Amsterdam
Nationale-Nederlanden Financiele Diensten B.V. Amsterdam
NMB-Heller Holding N.V. (50%)(1) Amsterdam
N.V. Nationale Volksbank (NVB) Amsterdam
Postbank N.V. Amsterdam
Runoto Leasing B.V. Oldenzaal
Stichting Regio Bank Amsterdam
Welvaert Financieringen N.V. Amsterdam
Westland/Utrecht Hypotheekbank N.V. (2) Amsterdam

REST OF EUROPE
Bank Slaski S.A. w Katowice (54.08%) Katowice, Poland
CW Lease Belgium N.V. Antwerp, Belgium
Heller Bank A.G. (50%)(1) Mainz, Germany
Baring Asset Management Holdings Ltd. London, United Kingdom
Baring Brothers Ltd. London, United Kingdom
ING Baring Holdings Limited London, United Kingdom
ING Derivatives (London) Ltd. London, United Kingdom
ING Bank (Belgium) S.A./N.V. Brussels, Belgium
ING Bank (Hungary) Rt. Budapest, Hungary
ING Bank (Luxembourg) S.A. Luxembourg
ING Bank (Schweiz) A.G. Zurich, Switzerland
ING Bank (Vienna) A.G. Vienna, Austria
ING (Ireland) Capital Ltd. Dublin, Ireland
ING Sviluppo Finanziaria S.p.A. Milan, Italy

F-104
415

NORTH AMERICA
ING (U.S.) Funding Corporation New York, United States
ING (U.S.) Financial Holdings Corporation New York, United States

SOUTH AMERICA
ING Trust (Antilles) N.V. Curacao, Netherlands Antilles
ING Bank (Chile) S.A. Santiago, Chile
ING Bank (Uruguay) S.A. Montevideo, Uruguay
ING Empreendimentos e Participacoes Ltda. Sao Paulo, Brazil
ING Inversiones Ltda. Bogota, Colombia
ING Servicios C.A. Caracas, Venezuela
ING Tradex S.A. Buenos Aires, Argentina
Middenbank Curacao N.V. Curacao, Netherlands Antilles

AUSTRALIA
ING Mercantile Mutual Bank Ltd. Sydney, Australia

ASIA
ING Capital Markets (Hong Kong) Ltd. Hong Kong
ING Merchant Bank (Singapore) Ltd. Singapore
ING Indonesia Bank P.T. (85%) Jakarta, Indonesia

BRANCH OFFICES
ING Bank has offices in all the major financial centres, including London, Hong Kong and
Tokyo. In addition, the bank has offices in Paris, Hamburg, Prague, Warsaw, Curacao, Sao
Paulo, Buenos Aires, Asuncion, Singapore, Taipei, Seoul, Manila and Johannesburg, among
others.

- ---------------
(1) Proportionally consolidated.
(2) This company is part of the consolidated accounts of ING Insurance N.V.

F-105
416

REPORT OF INDEPENDENT AUDITORS

The Supervisory Board and
Executive Board of ING Bank N.V.

We have audited the consolidated balance sheets of ING Bank N.V. and
subsidiaries as of December 31, 1996 and 1995, and the related consolidated
profit and loss accounts and consolidated statements of cash flows for each of
the three years in the period ended December 31, 1996. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
ING Bank N.V. and subsidiaries as of December 31, 1996 and 1995, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 1996, in conformity with accounting
principles generally accepted in the Netherlands.

Amsterdam, the Netherlands
April 3, 1997

/s/ KPMG Accountants N.V.

F-106
417

SCHEDULE I -- SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN RELATED PARTIES
AS OF DECEMBER 31, 1996
AMOUNTS ARE IN MILLIONS OF GUILDERS

COLUMN A COLUMN B COLUMN C COLUMN D
- ---------------------------------------------------------- -------- -------- ---------------
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST VALUE BALANCE SHEET
- ---------------------------------------------------------- -------- -------- ---------------

Debt securities
Debentures / available-for-sale:
-- Dutch Government..................................... 13,188 13,776 13,301
-- Foreign Governments.................................. 41,251 42,765 40,993
-- Public Utilities..................................... 1,855 1,903 1,812
-- Mortgage-backed securities........................... 8,509 8,906 8,414
-- Redeemable preference shares/sinking fund............ 469 495 433
-- All other corporate bonds............................ 17,180 17,991 17,166
Private loans / available-for-sale:
-- Dutch Government..................................... 11,899 13,456 11,883
-- Foreign Governments.................................. 365 403 375
-- Public Utilities..................................... 620 678 619
-- Corporate and other loans............................ 5,461 5,844 5,394
Deposits with credit institutions......................... 472 475 473
Other fixed maturity investments.......................... 576 604 567
------- ------- -------
101,846 107,296 101,430
Shares and convertible debentures
Ordinary shares
-- Public utilities..................................... 189 218 218
-- Banks, trusts and insurance companies................ 4,686 13,077 13,077
-- Industrial and all others............................ 5,131 11,666 11,666
Preference shares......................................... 1,331 1,381 1,381
Convertible debentures.................................... 47 48 48
------- ------- -------
11,384 26,390 26,390
Mortgage loans............................................ 23,763 25,170 23,816
Real Estate............................................... 8,008 10,749 10,749
Policy loans.............................................. 1,890 1,856 1,890
------- ------- -------
TOTAL INVESTMENTS......................................... 146,891 171,461 164,275
======= ======= =======

F-107
418

SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
AMOUNTS ARE IN MILLIONS OF GUILDERS

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H COLUMN I
- ------------- -------- ------------- -------- ------------ -------- ------------ -------------- ------------
NET
FUTURE POLICY INVESTMENT AMORTIZATION
DEFERRED BENEFITS, OTHER POLICY INCOME BENEFITS, OF DEFERRED
POLICY LOSSES, AND CLAIMS ALLOCATED TO CLAIMS, LOSSES POLICY
ACQUISITION CLAIMS, AND UNEARNED BENEFITS PREMIUM UNDERWRITING AND SETTLEMENT ACQUISITION
SEGMENT COSTS LOSS EXPENSES PREMIUMS PAYABLE REVENUE ACCOUNTS EXPENSES COSTS
- ------------- -------- ------------- -------- ------------ -------- ------------ -------------- ------------

1996
Life......... 4,248 109,564 n.a. 1,163 16,636 8,322 21,205 521
Non-Life..... 501 7,431 2,844 405 6,429 692 4,428 46
----- ------- ----- ----- ------ ----- ------ ---
Total........ 4,749 116,995 2,844 1,568 23,065 9,014 25,633 567
1995
Life......... 3,603 96,088 n.a 1,027 14,318 7,042 17,986 535
Non-Life..... 480 6,756 2,543 359 5,969 638 4,184 19
----- ------- ----- ----- ------ ----- ------ ---
Total........ 4,083 102,844 2,543 1,386 20,287 7,680 22,170 554
1994
Life......... 3,278 87,577 n.a. 919 13,652 5,734 16,349 401
Non-Life..... 454 6,217 2,344 323 5,818 613 4,199 23
----- ------- ----- ----- ------ ----- ------ ---
Total........ 3,732 93,794 2,344 1,242 19,470 6,347 20,548 424

COLUMN A COLUMN J COLUMN K
- ------------- -------- --------

OTHER
OPERATING PREMIUMS
SEGMENT EXPENSES WRITTEN
- ------------- -------- --------

1996
Life......... 2,025 16,636
Non-Life..... 2,210 6,604
----- ------
Total........ 4,235 23,240
1995
Life......... 1,742 14,318
Non-Life..... 2,065 6,101
----- ------
Total........ 3,807 20,419
1994
Life......... 1,683 13,652
Non-Life..... 1,914 5,916
----- ------
Total........ 3,597 19,568

F-108
419

SCHEDULE IV -- REINSURANCE
AMOUNTS ARE IN MILLIONS OF GUILDERS

COLUMN C COLUMN D COLUMN F
-------- ------------ --------------
COLUMN B CEDED TO ASSUMED FROM COLUMN E PERCENTAGE OF
------------ OTHER OTHER ---------- AMOUNT
COLUMN A GROSS AMOUNT COMPANIES COMPANIES NET AMOUNT ASSUMED TO NET
- -------------------------------- ------------ -------- ------------ ---------- --------------

1996 PREMIUMS:
-- Life....................... 16,733 499 402 16,636 2.4%
-- Non-life................... 7,003 583 184 6,604 2.8%
------ ----- --- ------ ---
Total Premiums........ 23,736 1,082 586 23,240 2.5%
1995 PREMIUMS:
-- Life....................... 14,369 526 475 14,318 3.3%
-- Non-life................... 6,465 566 202 6,101 3.3%
------ ----- --- ------ ---
Total Premiums........ 20,834 1,092 677 20,419 3.3%
1994 PREMIUMS:
-- Life....................... 13,696 322 278 13,652 2.0%
-- Non-life................... 6,191 487 212 5,916 3.6%
------ ----- --- ------ ---
Total Premiums........ 19,887 809 490 19,568 2.5%

F-109
420

SCHEDULE VI -- SUPPLEMENTAL INFORMATION CONCERNING NON-LIFE INSURANCE OPERATIONS
AMOUNTS ARE IN MILLIONS OF GUILDERS

COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F COLUMN G COLUMN H
- --------------------------- ----------- ----------- -------- -------- -------- ------------ -----------------------
CLAIMS AND CLAIMS
ADJUSTMENT EXPENSES
NET INCURRED RELATED TO
RESERVES DISCOUNT, INVESTMENT -----------------------
DEFERRED FOR UNPAID IF ANY, INCOME
POLICY CLAIMS & DEDUCTED ALLOCATED TO ACCIDENT YEARS
AFFILIATION WITH THE ACQUISITION CLAIMS ADJ. IN UNEARNED EARNED NON-LIFE -----------------------
REGISTRANT COSTS EXPENSES COLUMN C PREMIUMS PREMIUMS OPERATIONS CURRENT PRIOR
- --------------------------- ----------- ----------- -------- -------- -------- ------------ ----------- ---------

1996
Consolidated non-life
entities................. 501 7,431 -- 2,844 6,429 692 4,700 (322)
1995
Consolidated non-life
entities................. 480 6,756 -- 2,543 5,969 638 4,384 (264)
1994
Consolidated non-life
entities................. 454 6,217 -- 2,344 5,818 613 4,269 (84)

COLUMN A COLUMN I COLUMN J COLUMN K
- --------------------------- --------- ------------- --------

AMORTIZA- PAID CLAIMS
AFFILIATION WITH THE TION OF & CLAIMS ADJ. PREMIUMS
REGISTRANT DPAC(1) EXPENSES WRITTEN
- --------------------------- --------- ------------- --------

1996
Consolidated non-life
entities................. 46 4,098 6,604
1995
Consolidated non-life
entities................. 19 3,668 6,101
1994
Consolidated non-life
entities................. 23 3,616 5,916

- ---------------

(1) DPAC: Deferred policy acquisition costs

F-110
421

CONSOLIDATED BALANCE SHEET (UNAUDITED)
AMOUNTS IN MILLIONS OF GUILDERS

JUNE 30, DEC. 31,
1997 1996(1)
-------- --------

ASSETS
Tangible fixed assets................................................. 1,849 1,800
Participating interests............................................... 4,301 3,609
Investments........................................................... 211,979 188,469
Lending............................................................... 240,707 204,398
Banks................................................................. 44,495 37,353
Cash.................................................................. 3,719 3,078
Other assets.......................................................... 45,787 35,666
Accrued assets........................................................ 14,224 12,075
-------- --------
TOTAL....................................................... 567,061 486,448
======== ========

LIABILITIES
Shareholders' equity.................................................. 45,445 35,374
Third-party interests................................................. 451 470
-------- --------
GROUP EQUITY.......................................................... 45,896 35,844
Subordinated loan..................................................... 1,068 1,068
Funds for general banking risks....................................... 1,378 1,300
-------- --------
GROUP CAPITAL BASE.................................................... 48,342 38,212
General provisions.................................................... 4,457 3,571
Insurance provisions.................................................. 132,821 121,406
Funds entrusted to and debt securities of the banking operations...... 242,351 204,885
Banks................................................................. 82,449 72,403
Other liabilities..................................................... 37,614 32,036
Accrued liabilities................................................... 19,027 13,935
-------- --------
TOTAL....................................................... 567,061 486,448
======== ========

(1) Reflects the adoption of the Fund for general banking risks as of December
31, 1996. See Note 7.1(r) of NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-111
422

CONSOLIDATED PROFIT AND LOSS ACCOUNT (UNAUDITED)
AMOUNTS IN MILLIONS OF GUILDERS

SIX MONTHS
ENDED JUNE 30,
-----------------
1997 1996
------ ------

Premium income........................................................... 14,871 11,644
Income from investments of the insurance operations...................... 6,687 5,172
Interest result from banking operations.................................. 4,008 3,453
Commission............................................................... 1,796 1,405
Other income............................................................. 1,360 950
------ ------
TOTAL INCOME(2).......................................................... 28,722 22,624
Underwriting expenditure................................................. 16,834 12,703
Other interest charges................................................... 472 526
Salaries and charges for pensions and social security.................... 3,708 3,009
Value adjustments to receivables of the banking operations............... 400 575
Addition to the fund for general banking risks........................... 90 --
Other expenditure........................................................ 4,432 3,630
------ ------
TOTAL EXPENDITURE(3)..................................................... 25,936 20,443
Dividend on own shares................................................... (49) (32)
------ ------
RESULT BEFORE TAXATION(4)................................................ 2,737 2,149
Taxation................................................................. 768 629
------ ------
RESULT AFTER TAXATION.................................................... 1,969 1,520
Third-party interests.................................................... 27 6
------ ------
NET PROFIT(5)............................................................ 1,942 1,514
Dividend on preference shares............................................ 23 23
------ ------
NET PROFIT AFTER DEDUCTING DIVIDEND ON PREFERENCE SHARES................. 1,919 1,491
====== ======

F-112
423

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

1. ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements do not include
all of the information and footnotes required by Dutch generally accepted
accounting principles for complete financial statements. In the opinion of ING
Groep N.V., all adjustments (consisting of only normal recurring accruals)
considered necessary for a fair presentation have been included.

Operating results for the six months ended June 30, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997. These consolidated financial statements should be read in
conjunction with ING Groep N.V.'s audited annual financial statements.

2. INCOME

INSURANCE BANKING ELIMINATIONS
ACTIVITIES ACTIVITIES SIX TOTAL
SIX MONTHS SIX MONTHS MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
--------------- ------------- --------- ---------------
1997 1996 1997 1996 1997 1996 1997 1996
------ ------ ----- ----- --- --- ------ ------

INCOME ANALYZED BY ACTIVITY
Premium income.................. 14,871 11,644 14,871 11,644
Income from investments of the
insurance operations......... 6,765 5,241 78 69 6,687 5,172
Interest result from banking
operations................... 3,947 3,393 (61) (60) 4,008 3,453
Commission...................... 152 117 1,644 1,288 1,796 1,405
Other income.................... 131 122 1,229 828 1,360 950
------ ----- ----- ----- ---- ---- ------ ------
TOTAL INCOME............ 21,919 17,124 6,820 5,509 17 9 28,722 22,624
====== ===== ===== ===== ==== ==== ====== ======
GEOGRAPHIC DISTRIBUTION OF INCOME
The Netherlands................. 10,889 9,343 4,093 3,770 17 9 14,965 13,104
Rest of Europe.................. 1,764 1,478 1,713 960 3,477 2,438
North America................... 6,343 4,277 465 361 6,808 4,638
South America................... 122 97 324 255 446 352
Asia............................ 1,007 853 207 151 1,214 1,004
Australia....................... 1,790 1,056 14 11 1,804 1,067
Other........................... 164 175 4 1 168 176
------ ----- ----- ----- ---- ---- ------ ------
22,079 17,279 6,820 5,509 17 9 28,882 22,779
INCOME BETWEEN GEOGRAPHIC AREAS... (160) (155) (160) (155)
------ ----- ----- ----- ---- ---- ------ ------
TOTAL INCOME............ 21,919 17,124 6,820 5,509 17 9 28,722 22,624
====== ===== ===== ===== ==== ==== ====== ======

F-113
424

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

(CONTINUED)

3. EXPENDITURE

INSURANCE BANKING
ACTIVITIES ACTIVITIES ELIMINATIONS TOTAL
SIX MONTHS SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
--------------- ------------- ----------- ---------------
1997 1996 1997 1996 1997 1996 1997 1996
------ ------ ----- ----- ---- ---- ------ ------

Underwriting expenditure....... 16,834 12,703 16,834 12,703
Other interest charges......... 473 519 16 16 17 9 472 526
Salaries and charges for
pensions and social
security.................... 1,127 962 2,581 2,047 3,708 3,009
Value adjustments to
receivables of the banking
operations.................. 400 575 400 575
Addition to the fund for
general banking risks....... 90 90
Other expenditure.............. 2,093 1,778 2,339 1,852 4,432 3,630
------ ----- ----- ----- ---- ---- ------ ------
TOTAL EXPENDITURE...... 20,527 15,962 5,426 4,490 17 9 25,936 20,443
====== ===== ===== ===== ==== ==== ====== ======

4. GEOGRAPHIC DISTRIBUTION OF THE RESULT BEFORE TAXATION

INSURANCE BANKING TOTAL
ACTIVITIES ACTIVITIES SIX MONTHS
SIX MONTHS SIX MONTHS ENDED
ENDED JUNE 30, ENDED JUNE 30, JUNE 30,
--------------- --------------- ---------------
1997 1996 1997 1996 1997 1996
----- ----- ----- ----- ----- -----

The Netherlands.................... 926 757 1,310 1,234 2,236 1,991
Rest of Europe..................... 111 102 257 37 368 139
North America...................... 252 209 35 103 287 312
South America...................... (5) 3 184 151 179 154
Asia............................... 38 53 99 67 137 120
Australia.......................... 70 46 (1) 2 69 48
Other.............................. 0 (8) 0 (8)
------ ----- ----- ----- ----- -----
1,392 1,162 1,884 1,594 3,276 2,756
Value adjustments to receivables of
the banking operations/Addition
to the Fund for general banking
risks........................... 490 575 490 575
------ ----- ----- ----- ----- -----
TOTAL...................... 1,392 1,162 1,394 1,019 2,786 2,181
DIVIDEND ON OWN SHARES............. (49) (32)
----- -----
RESULT BEFORE TAXATION..... 2,737 2,149
===== =====

5. NET PROFIT

INSURANCE BANKING TOTAL(1)
ACTIVITIES ACTIVITIES SIX MONTHS
SIX MONTHS SIX MONTHS ENDED
ENDED JUNE 30, ENDED JUNE 30, JUNE 30,
--------------- --------------- ---------------
1997 1996 1997 1996 1997 1996
----- ----- ----- ----- ----- -----

Result before taxation............. 1,392 1,162 1,394 1,019 2,737 2,149
Taxation........................... 361 301 407 328 768 629
Third-party interests.............. 1 1 26 5 27 6
------ ----- ----- ----- ----- -----
NET PROFIT................. 1,030 860 961 686 1,942 1,514
====== ===== ===== ===== ===== =====

- ---------------

(1) After deduction of dividend on own shares of NLG 49 million at June 30, 1997
and NLG 32 million of June 30, 1996.

F-114
425

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

AMOUNTS ARE IN MILLIONS OF GUILDERS, UNLESS OTHERWISE STATED

(CONTINUED)

6. RECONCILIATION OF DUTCH GAAP NET PROFIT AND SHAREHOLDERS' EQUITY TO U.S. GAAP
FOR THE SIX MONTHS ENDED JUNE 30, 1997

SHAREHOLDERS' NET PROFITS
EQUITY SIX MONTHS
SIX MONTHS ENDED ENDED
JUNE 30, 1997 JUNE 30, 1997
---------------- ----------------

45,445 1,942
AMOUNTS DETERMINED IN ACCORDANCE WITH DUTCH GAAP
(*)...................................................
------ -----
Adjustments in respect of:
a. Pension liabilities and pension costs........... (1,190) 82
b. Post-employment benefits........................ (1,028) (41)
c. Post-retirement benefits........................ (331) 5
d. Goodwill associated with acquisitions........... 2,316 (179)
Negative goodwill associated with the 1991
merger.......................................... (220) 30
e. Recognition of realized gains and losses on
sales of participating interests and Group
companies..................................... 0 13
f. Valuation of real estate........................ (2,945) (95)
g. Valuation of debt securities.................... 6,582 30
h. Recognition of realized gains and losses on
sales of debt securities
Realized gains and losses on sales.............. 0 759
Reversal of provision for yield differences..... 906 (152)
Amortization of premiums and discounts.......... 0 (263)
i. Recognition of realized gains and losses on
sales of shares and convertible debentures.... 0 273
j. Provision for future catastrophe and other
accidental losses............................... 426 19
k. Provision for life policy liabilities........... (105) (49)
l. Deferred acquisition costs of insurance
contracts....................................... 25 (17)
m. Dividend to ING Groep N.V. shareholders......... 845 0
n. Accounting for certain derivative financial
instruments denominated in foreign
currencies.................................... 102 (139)
o. Accounting for derivative financial instruments
held for risk management purposes that do not
meet U.S. hedging criteria.................... 194 116
p. General provisions.............................. 762 314
q. Other........................................... 188 (19)
------ -----
6,527 687
Subtotal..............................................
------ -----
(1,247) (249)
Tax effect of the adjustments.........................
------ -----
r. Fund for general banking risks.................. 1,378 62
------ -----
6,658 500
Adjustments after taxes...............................
------ -----
52,103 2,442
Amounts determined in accordance with U.S. GAAP.......
------ -----
23
Dividend Preference shares............................
------ -----
2,419
Profit in accordance with U.S. GAAP after deduction of
preference dividend.................................
------ -----

- ------------------

(*) Reflects the adoption of the Fund for general banking risks as of December
31, 1996. See Note 7.1(r) of NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-115
426

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Articles of Association of ING contain no provisions under which any
member of the Supervisory Board or the Executive Board or officers are
indemnified in any manner against any liability which he may incur in his
capacity as such. However, Article 36 of the Articles of Association of the
Registrant provides: "In so far as the General Meeting of the Shareholders
approves the annual accounts without reservation, such approval shall serve to
discharge the members of the Executive Board from liability for their management
and to discharge the Supervisory directors from liability for their supervision
in the previous financial year, without prejudice to the provisions of articles
138 and 149 of Book 2 of the Civil Code". Under Netherlands law, this discharge
is not absolute and would not be effective as to any matters not disclosed to
the holders of the Registrant's Ordinary Shares, Bearer Receipts or ADSs.

Certain officers and members of the Supervisory Board and the Executive
Board of ING are, to a limited extent, insured under an insurance policy against
damages resulting from their conduct when acting in their capacities

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

II-1
427

(23)(e) Consent of Nyemaster, Goode, Voigts, West, Hansell & O'Brien, P.C., Legal Advisor
to Equitable of Iowa Companies (set forth in Exhibit 8(d)).
(23)(f) Consent of Tillinghast-Towers Perrin.**
(23)(g) Consent of J.P. Morgan Securities Inc.**
(23)(h) Consent of Moret Ernst & Young Accountants, independent auditors to ING Groep
N.V.**
(23)(i) Consent of KPMG Accountants N.V., independent auditors to ING Bank N.V.**
(23)(j) Consent of Ernst & Young LLP, independent auditors to Equitable of Iowa
Companies.**
(24) Powers of Attorney (included in signature page).+
(99)(a) Opinion of J.P. Morgan Securities Inc. (filed herewith as Annex B to the
Prospectus/Proxy Statement).
(99)(b) Form of Election Form and Letter of Transmittal.**
(99)(c) Form of Proxy for holders of Equitable of Iowa Companies Common Stock.**
(99)(d) Report of Tillinghast-Towers Perrin.**

- ---------------
* Incorporated by reference from the Registration Statement on Form F-1 of ING
Groep N.V. (Registration Statement No. 333-6936).

** Filed herewith.

+ Previously filed.

(B) FINANCIAL STATEMENT SCHEDULES

Schedule I -- Summary of investments other than investments in related parties
Schedule III -- Supplementary insurance information
Schedule IV -- Reinsurance
Schedule VI -- Supplemental information concerning Property and Casualty Insurance
Operations

All other schedules required by Article 7 of Regulation S-X are omitted for
the reason that they are not required, or are not applicable. ING Group agrees
to furnish supplementally to the Commission a copy of any omitted schedule upon
request.

ITEM 22. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

II-2
428

(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(d) To file a post-effective amendment to this registration statement
to include any financial statements required by Rule 3-19 of Regulation S-X
at the start of any delayed offering or throughout a continuous offering.
Financial statements and information otherwise required by Section 10(a)(3)
of the Act need not be furnished, provided, that the registrant includes in
the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (d) and other information
necessary to ensure that all other information in the prospectus is at
least as current as the date of those financial statements.

The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

The registrant undertakes that every prospectus: (i) that is filed pursuant
to paragraph (1) immediately preceding, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means and to arrange or provide for a facility in the U.S.
for the purpose of responding to such requests. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.

The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.

II-3
429

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, ING Groep N.V.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-4 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Amsterdam, the Netherlands, on September 17,
1997.

ING GROEP N.V.

By: /s/ C. MAAS
------------------------------------
C. Maas
Chief Financial Officer

POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement or amendment has been signed below by the following
persons in the capacities and on the dates indicated.

NAME TITLE DATE
- ----------------------------------------------- ------------------------ -------------------

* Chairman of Executive September 17, 1997
- ----------------------------------------------- Board (Principal
A.G. Jacobs Executive Officer)

* Member of Executive September 17, 1997
- ----------------------------------------------- Board
C. Maas

* Principal Accounting September 17, 1997
- ----------------------------------------------- Officer
P.G. Lock

* Vice-Chairman of September 17, 1997
- ----------------------------------------------- Executive Board
G.J.A. van der Lugt

* Member of Executive September 17, 1997
- ----------------------------------------------- Board
J.H. Holsboer

Member of Executive , 1997
- ----------------------------------------------- Board
E. Kist

* Member of Executive September 17, 1997
- ----------------------------------------------- Board
J.H.M. Lindenbergh

Member of Executive , 1997
- ----------------------------------------------- Board
M. Minderhoud

II-4
430

NAME TITLE DATE
- ----------------------------------------------- ------------------------ -------------------

* Member of Executive September 17, 1997
- ----------------------------------------------- Board
A.H.G. Rinnooy Kan

*By: /s/ C. MAAS

---------------------------------

C. Maas

Attorney-in-Fact

Pursuant to the requirements of Section 6(a) of the Securities Act of 1933,
the Authorized Representative has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, solely in its capacity
as the duly authorized representative of ING Groep N.V. in the United States, in
the City of New York, State of New York, on the 17th day of September, 1997.

ING (U.S.) Financial Holdings
Corporation

By: /s/ LEENDERT CORNELIS GRIJNS

------------------------------------
Name: Leendert Cornelis Grijns
Title: Director

II-5
431

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, Stichting
Administratiekantoor ING Groep, as the legal entity created for the issuance of
the Bearer Depositary Receipts, has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Amsterdam, the Netherlands, on September 15, 1997.

STICHTING ADMINISTRATIEKANTOOR
ING GROEP

By: /s/ A.M. KNULST

--------------------------------------
Name: A.M. Knulst

By: /s/ C.C. TH. VAN ANDEL

--------------------------------------
Name: C.C. Th. van Andel

POWER OF ATTORNEY

NAME TITLE DATE
- ----------------------------------------- ------------------------------ -------------------

* Chairman of the Executive September 15, 1997
- ----------------------------------------- Board
J. Veldman

/s/ C.C. TH. VAN ANDEL Member of the Executive Board September 15, 1997
- -----------------------------------------
C.C. Th. van Andel

* Member of the Executive Board September 15, 1997
- -----------------------------------------
J.H. Hulshof

/s/ A.M. KNULST Member of the Executive Board September 15, 1997
- -----------------------------------------
A.M. Knulst

* Member of the Executive Board September 15, 1997
- -----------------------------------------
H. de Korver

Member of the Executive Board , 1997
- -----------------------------------------
M. Ververs

Member of the Executive Board , 1997
- -----------------------------------------
J. Kamminga

*By:/s/ C. MAAS
- -----------------------------------------
C. Maas
Attorney-in-Fact

II-6
432

EXHIBIT INDEX

(2) Agreement and Plan of Merger, dated as of July 7, 1997, among
Equitable of Iowa Companies, ING Groep N.V. and PFIH Holdings, Inc.
(filed herewith as Annex A to the Prospectus/Proxy Statement).
(3)(a) Statuten (Articles of Association) of ING Groep N.V., (English
translation).*
(3)(b) Statuten (Articles of Association) and Administratievoorwaarden
(Conditions of Administration) (together, the Trust Agreement) of
Stichting Administratiekantoor ING Groep N.V. (the Trust), (English
translations).*
(4)(a) Form of Amended and Restated Deposit Agreement, dated as of June 2,
1997, among ING Groep N.V., Morgan Guaranty Trust Company of New York,
as Depositary, and holders from time to time of American Depositary
Shares issued thereunder, including the form of American Depositary
Receipt.*
(4)(b) Specimen of Bearer Depositary Receipt.*
(5) Opinion (including consent) of Jan Willem Wurfbain, General Counsel of
ING Groep N.V., as to the validity of the Ordinary Shares and the
Bearer Depositary Receipts.**
(8)(a) Opinion (including consent) of KPMG Meijburg & Co. as to taxation of
the ADSs.+
(8)(b) Opinion (including consent) of Sullivan & Cromwell as to taxation of
the ADSs.**
(8)(c) Opinion (including consent) of Sullivan & Cromwell as to taxation of
the Merger.**
(8)(d) Opinion (including consent) of Nyemaster, Goode, Voigts, West, Hansell
& O'Brien, P.C. as to taxation of the Merger.**
(21) Subsidiaries of ING Groep N.V.*
(23)(a) Consent of Jan Willem Wurfbain, General Counsel of ING Groep N.V. (set
forth in Exhibit 5).
(23)(b) Consent of KPMG Meijburg & Co., Dutch tax counsel to ING Groep N.V.
(set forth in Exhibit 8(a)).
(23)(c) Consent of Sullivan & Cromwell, U.S. Legal Advisor to ING Groep N.V.
(set forth in Exhibit 8(b)).
(23)(d) Consent of Sullivan & Cromwell, U.S. Legal Advisor to ING Groep N.V.
(set forth in Exhibit 8(c)).
(23)(e) Consent of Nyemaster, Goode, Voigts, West, Hansell & O'Brien, P.C.,
Legal Advisor to Equitable of Iowa Companies (set forth in Exhibit
8(d)).
(23)(f) Consent of Tillinghast-Towers Perrin.**
(23)(g) Consent of J.P. Morgan Securities Inc.**
(23)(h) Consent of Moret Ernst & Young Accountants, independent auditors to
ING Groep N.V.**
(23)(i) Consent of KPMG Accountants N.V., independent auditors to ING Bank
N.V.**
(23)(j) Consent of Ernst & Young LLP, independent auditors to Equitable of
Iowa Companies.**
(24) Powers of Attorney (included in signature page).+
(99)(a) Opinion of J.P. Morgan Securities Inc. (filed herewith as Annex B to
the Prospectus/Proxy Statement).
(99)(b) Form of Election Form and Letter of Transmittal.**
(99)(c) Form of Proxy for holders of Equitable of Iowa Companies Common
Stock.**

433

(99)(d) Report of Tillinghast-Towers Perrin.**

- ---------------
* Incorporated by reference from the Registration Statement on Form F-1 of ING
Groep N.V. (Registration Statement No. 333-6936).

** Filed herewith.

+ Previously filed.