Aetna Inc. (a Pennsylvania corporation) and its subsidiaries (collectively, the
“Company”) constitute one of the nation’s largest health benefits companies. Prior
to December 13, 2000, the Company (formerly Aetna U.S. Healthcare Inc.) was a
subsidiary of a Connecticut corporation named Aetna Inc. (“former Aetna”). On
December 13, 2000, former Aetna spun the Company off to its shareholders and,
as part of the same transaction, the remaining entity, which contained former
Aetna’s financial services and international businesses, was merged with a subsidiary
of ING Groep N.V. (“ING”) (collectively, the “Transaction”). Aetna Inc. was incorporated
in Pennsylvania in 1982 under the name of United States Health Care Systems, Inc.
Health Care:
Health and dental benefit products (including health maintenance organization,
point-of-service, preferred provider organization and indemnity products)
Group Insurance:
Group insurance products (including life, disability and long-term care insurance
products)
Large Case Pensions:
Retirement products (including pension and annuity products) primarily for
defined benefit and defined contribution plans
Competition in the health care industry is intense, primarily due to a large
number of competitors, aggressive marketing and pricing, and a proliferation
of competing products, including new products that are continually being introduced
into the market. New entrants into the marketplace as well as significant consolidation
within the industry have contributed to the intense competitive environment.
For the group insurance industry, the Company believes that the most significant
factors which distinguish competing companies are price, quality of service,
comprehensiveness of coverage, and product array and design. Specialty carriers
have increased market penetration in the life and disability business. The deeply
penetrated group life market remains highly competitive.