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07/31/2008  Letter from Scott Kreiling

We are working to transform health care to reduce the tyranny of health care waste, confusion, and threats for our members and their families. This cause is worthless if we do not stand ethically as a company and as individuals in living this cause.

In today's world of highly competitive markets, the pressure to perform is no greater than in sales and service. Ethical issues can present themselves at almost any point in making a sale or providing service to a customer. The federal government estimates that approximately $60 to $160 billion is lost to health care fraud each year in the United States. This loss can drive up premiums, which hurts everyone.

At Regence, our External Audit and Investigations department and our Ethics and Compliance department are essential elements in protecting our members and allowing us to pursue our cause.

The External Audit and Investigations department works to identify inappropriate and abusive billing patterns involving both providers and members. It also works to ensure that the members and groups that are enrolled in our products are actually eligible for their coverage.

Our Ethics and Compliance department helps our employees sort through ethical dilemmas. The ethics and compliance officers' mission is to support all employees in conducting our business with honesty, integrity and high ethical standards. This department also fosters a culture of ethics by developing ethical leadership practices and promoting a commitment to ethics at all levels of the company. They advise employees, assist in resolving issues and administer the Regence Code of Business Conduct.

Both of these departments ensure that the ethical component of our mission is always at the forefront. At Regence, we appreciate the trust you place in us. Our commitment to high ethical standards is one of the many ways we earn that trust every day.

We encourage you to learn more about the principles and standards that are at the core of our company. I invite you to attend our three-hour Ethics seminar to learn more about how to integrate ethics into your everyday sales and service. This comprehensive seminar will be held in Seattle, Everett and Tacoma and qualifies for three ethics continuing education credits.

Thank you for your continued support and commitment to Regence BlueShield. As always, please talk to your Regence Sales contact if you have any questions.

Sincerely,

Scott Kreiling
Vice President of Sales

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