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Cigna Corp – ‘DEF 14A’ for 4/23/08

On:  Thursday, 3/20/08, at 12:09pm ET   ·   Effective:  3/20/08   ·   For:  4/23/08   ·   Accession #:  1047469-8-3139   ·   File #:  1-08323

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/20/08  Cigna Corp                        DEF 14A     4/23/08    1:1.2M                                   Merrill Corp/New/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Solicitation Material              HTML    869K 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

CIGNA Corporation
Two Liberty Place
1601 Chestnut Street
Philadelphia, PA 19192-1550

March 20, 2008

NOTICE OF 2008 ANNUAL MEETING OF SHAREHOLDERS

TIME AND DATE:		3:30 p.m. on Wednesday, April 23, 2008.
PLACE:		The Philadelphia Museum of Art, Van Pelt Auditorium 26th Street and the Benjamin Franklin Parkway Philadelphia, Pennsylvania
ITEMS OF BUSINESS:		•		Elect four directors for terms expiring in April 2011.
		•		Ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2008.
		•		Approve the amendment of Article Fourth of the Company's Restated Certificate of Incorporation.
		•		Approve the amendment of Article Fifth of the Company's Restated Certificate of Incorporation.
		•		Approve the amendment of Article Tenth of the Company's Restated Certificate of Incorporation.
		•		Consider any other business properly brought before the meeting.
RECORD DATE:		Monday, February 25, 2008. CIGNA shareholders of record at the close of business on that date are entitled to vote at the meeting.
PROXY VOTING:		Your vote is important, even if you do not own many shares. We urge you to mark, date, sign and return the enclosed proxy/voting instruction card or, if you prefer, to vote by telephone or by using the Internet.
		H. EDWARD HANWAY Chairman and Chief Executive Officer
		By order of the Board of Directors,
		NICOLE S. JONES Corporate Secretary and Vice President and Chief Counsel, Corporate & Financial Law

CIGNA CORPORATION
2008 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT

TABLE OF CONTENTS

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CIGNA CORPORATION

Two Liberty Place
1601 Chestnut Street
Philadelphia, PA 19192-1550

CIGNA is providing these proxy materials in connection with its 2008 annual meeting of shareholders. This proxy statement, the accompanying proxy card and CIGNA's 2007 Annual Report on Form 10-K were first mailed to shareholders on or about Thursday, March 20, 2008. As used in this proxy statement, "CIGNA" and the "Company" may refer to CIGNA Corporation itself, one or more of its subsidiaries, or CIGNA Corporation and its consolidated subsidiaries.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON APRIL 23, 2008.

This proxy statement and CIGNA's Annual Report to shareholders are available at http://www.cigna.com/about_us/investor_relations/recent_disclosures.html.

ABOUT THE ANNUAL MEETING

Why did I receive this proxy statement?

The Board of Directors of CIGNA Corporation is soliciting your proxy to vote at the 2008 annual meeting or any adjournment or postponement thereof. You are receiving a proxy statement because you owned shares of CIGNA common stock on Monday, February 25, 2008, the record date, and that entitles you to vote at the annual meeting. By use of a proxy, you can vote, whether or not you attend the meeting. This proxy statement describes the matters on which CIGNA would like you to vote and provides information on those matters.

What will I be voting on?

•

Election of four directors for terms expiring in April 2011 (see page 8).



•

Ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2008 (see page 19).



•

Approval of the proposed amendments to Article Fourth of the Company's Restated Certificate of Incorporation to eliminate the provisions related to Junior Participating Preferred Stock, Series D, as more fully described on pages 22 and 23.



•

Approval of the proposed amendments to Article Fifth of the Company's Restated Certificate of Incorporation to reduce the supermajority voting requirement to a simple majority for shareholder amendments to the By-Laws, as more fully described on pages 22 and 24.



•

Approval of the proposed amendments to Article Tenth of the Company's Restated Certificate of Incorporation to reduce the supermajority voting requirement to a simple majority for approval of certain business combinations, as more fully described on pages 22 and 25.

What are the Board of Directors' recommendations?

The Board recommends a vote:

•

for the election of the director nominees;



•

for the ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2008;

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•

for the approval of the proposed amendments to Article Fourth of the Company's Restated Certificate of Incorporation;



•

for the approval of the proposed amendments to Article Fifth of the Company's Restated Certificate of Incorporation; and



•

for the approval of the proposed amendments to Article Tenth of the Company's Restated Certificate of Incorporation.

Could other matters be decided at the annual meeting?

We do not know of any other matters that will come before the shareholders during the annual meeting. The chairman of the meeting may refuse to allow presentation of a proposal or a nomination for the Board from the floor at the annual meeting if the proposal or nomination was not properly submitted. CIGNA's 2007 proxy statement described the requirements for properly submitting proposals and nominations from the floor at this year's annual meeting. The requirements are similar to those described on page 80 for the 2009 annual meeting. The proxies will vote for or against other matters that come before the annual meeting as those persons deem advisable.

How many votes can be cast by all shareholders?

Each share of CIGNA common stock is entitled to one vote. We had 280,221,928 shares of common stock outstanding and entitled to vote on Monday, February 25, 2008.

How many votes must be present to hold the annual meeting?

At least two-fifths of the issued and outstanding shares entitled to vote, or 112,088,772 votes, present in person or by proxy, is needed to hold the annual meeting. We urge you to vote by proxy even if you plan to attend the annual meeting. This will help us know that enough votes will be present to hold the meeting.

How many votes are needed to approve each proposal?

•

The number of votes cast "for" a director nominee must exceed the number of votes cast "against" the nominee for that nominee to be elected to the Board.



•

The affirmative vote of a majority of the voting power of the issued and outstanding stock of the Company must be cast in favor of:



•

The ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2008.



•

The approval of the proposed amendments to Article Fourth of the Company's Restated Certificate of Incorporation to eliminate the provisions related to Junior Participating Preferred Stock, Series D, as more fully described on pages 22 and 23.



•

The approval of the proposed amendments to Article Fifth of the Company's Restated Certificate of Incorporation to reduce the supermajority voting requirement to a simple majority for shareholder amendments to the By-Laws, as more fully described on pages 22 and 24.



•

The affirmative vote of at least 80% of the voting power of the issued and outstanding common stock of the Company must be cast in favor of:



•

The approval of the proposed amendments to Article Tenth of the Company's Certificate of Incorporation to reduce the supermajority voting requirement to a simple majority for approval of certain business combinations, as more fully described on pages 22 and 25.

4

What if I vote to "abstain?"

A vote to "abstain" for the election of directors will have no effect on the outcome of that proposal. A vote to "abstain" for the other proposals will have the effect of a vote against. However, in either case, your shares will be counted as present for purposes of determining whether enough votes are present to hold the annual meeting.

How do I vote if I hold shares as a record holder?

If your name is registered on CIGNA's stockholder records as the owner of shares, you are the "record holder." If you hold shares as a record holder, there are four ways that you can vote your shares.

•

Over the Internet.  Vote at http://www.proxyvoting.com/ci. The Internet voting system is available 24 hours a day until 11:59 p.m. E.D.T. on Tuesday, April 22, 2008. Once you enter the Internet voting system, you can record and confirm (or change) your voting instructions.



•

By telephone.  Use the telephone number shown on your proxy card. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m. E.D.T. on Tuesday, April 22, 2008. Once you enter the telephone voting system, a series of prompts will tell you how to record and confirm (or change) your voting instructions.



•

By mail.  Mark your voting instructions on the proxy card, and sign and date it. Then, return the proxy card in the postage-paid envelope provided. For your mailed proxy card to be counted, we must receive it before the polls close at the meeting on Wednesday, April 23, 2008.



•

In person.  Attend the annual meeting, or send a personal representative with an appropriate proxy, in order to vote.

How do I vote if a bank, broker, or other nominee holds my shares?

If you hold shares in "street name," that means a bank, broker or other nominee is actually the record holder entitled to vote those shares under New York Stock Exchange rules. In this case, follow the voting instructions you receive from the record holder. If you want to vote in person at the annual meeting, you must first obtain a legal proxy from the bank, broker or other nominee that holds your shares and bring that proxy to the meeting.

If you do not submit voting instructions to your bank, broker or other nominee, the institution may still be permitted to vote your shares. It will have discretionary authority to vote on the election of directors, ratification of the appointment of PricewaterhouseCoopers LLP, and the amendments to Articles Fourth, Fifth and Tenth of the Company's Certificate of Incorporation.

How do I vote if my CIGNA shares are held by Mellon Investor Services in my Employee Stock Accounts?

Employee Stock Accounts maintained by Mellon Investor Services hold restricted stock that has not yet vested, restricted stock that has vested, and shares acquired through an option exercise. If you have these kinds of shares, you should follow the rules above for voting shares held as a record holder.

Can I vote if I have money in the CIGNA Stock Fund of the CIGNA or Intracorp 401(k) plans?

If you have money invested in the CIGNA Stock Fund of the CIGNA 401(k) Plan or the Intracorp 401(k) Performance Sharing Plan, the plan trustees have the legal authority to vote those shares. Under the plans, however, you have pass-through voting rights based on your interest in the CIGNA Stock Fund. You may exercise pass-through voting rights in almost the same way that record holders may vote their shares, but you have an earlier deadline. Specifically, you may vote over the Internet, by telephone, or by mail as described above but you may not vote in person at the annual meeting. Your

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voting instructions must be received by 11:59 p.m. E.D.T. on Friday, April 18, 2008, in order for the trustee to submit a proxy that reflects your instructions.

Your voting instructions will be kept confidential under the terms of the plans. If you do not give voting instructions (or they are received after 11:59 p.m. E.D.T. on Friday, April 18, 2008), the trustees will vote your interest in the CIGNA Stock Fund of the CIGNA 401(k) Plan or the Intracorp 401(k) Performance Sharing Plan as instructed by a management advisory committee.

Can I change my vote?

Yes, if you are a record holder (or vote your shares in the same manner as a record holder), you may, as applicable:

•

Enter new instructions on either the telephone or Internet voting system before 11:59 p.m. E.D.T. on Tuesday, April 22, 2008.



•

Send a new proxy card with a later date than the card previously submitted. We must receive your new proxy card before the polls close at the meeting on Wednesday, April 23, 2008.



•

Write to the Corporate Secretary at the address listed on page 11. Your letter should contain the name in which your shares are registered, the date of the proxy you wish to revoke or change, your new voting instructions, if applicable, and your signature. Your letter must be received by the Corporate Secretary before the annual meeting begins on Wednesday, April 23, 2008.



•

Attend the annual meeting on Wednesday, April 23, 2008 and vote in person (or send a personal representative with an appropriate proxy).

If you hold your shares in street name, you may submit new voting instructions in the manner provided by your broker, bank or other holder of record.

What if I do not indicate my vote for one or more of the matters on my proxy card?

If you sign and mail your proxy card without marking any choices, your proxy will be voted:

•

for the election of the director nominees;



•

for the ratification of the appointment of PricewaterhouseCoopers LLP as the Company's independent registered public accounting firm for 2008;



•

for the approval of the proposed amendments to Article Fourth of the Company's Restated Certificate of Incorporation to eliminate the provisions related to Junior Participating Preferred Stock, Series D;



•

for the approval of the proposed amendments to Article Fifth of the Company's Restated Certificate of Incorporation to reduce the supermajority voting requirement to a simple majority for shareholder amendments to the By-Laws; and



•

for the approval of the proposed amendments to Article Tenth of the Company's Certificate of Incorporation to reduce the supermajority voting requirement to a simple majority for approval of certain business combinations.

If any other matters are properly presented for a vote, the people named as proxies will have discretionary authority, to the extent permitted by law, to vote on such matters according to their best judgment.

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Is my vote confidential?

If you want your vote to be confidential, you must indicate that when you submit your proxy. If you choose confidential voting, your voting records will not be disclosed to us except as required by law or in contested Board elections.

Who will count the votes?

Mellon Investor Services has been appointed Inspector of Election for the annual meeting. The Inspector will determine the number of shares outstanding and voting power of each, the shares represented at the annual meeting, the existence of a quorum, and the validity of proxies and ballots, and will count all votes and ballots.

How do I attend the annual meeting? What do I need to bring?

If you are a shareholder of record, your admission card is attached to your proxy card. You will need to bring your admission card with you to the meeting. Regardless of how you hold your shares, you must bring a valid photo ID to be admitted to the meeting. In addition, if you own shares in street name, bring your most recent brokerage statement or a letter from your broker or other nominee with you to the meeting so that we can verify your ownership of common stock and admit you to the meeting; however, you will not be able to vote your shares at the annual meeting without a legal proxy from the record holder as described on page 5.

Please note that no cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permitted in the Van Pelt Auditorium.

Who pays for the proxy solicitation and how will CIGNA solicit votes?

CIGNA pays the cost of preparing proxy materials and soliciting your vote. Proxies may be solicited on our behalf by our directors, officers, employees and agents by telephone, electronic or facsimile transmission or in person. We will enlist the help of banks and brokerage houses in soliciting proxies from their customers and reimburse them for their related out-of-pocket expenses. In addition, we have engaged Georgeson Shareholder Communications, Inc. to assist in soliciting proxies. CIGNA will pay Georgeson a fee of approximately $15,000 and reimburse Georgeson for its reasonable out-of-pocket expenses associated with this work.

How do I find out the annual meeting voting results?

The final voting results of the annual meeting will be published no later than Friday, August 8, 2008 in CIGNA's second quarter 2008 report on Form 10-Q.

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INFORMATION ABOUT ITEM 1. ELECTION OF DIRECTORS

At this meeting, four directors are seeking election for terms expiring in 2011. CIGNA's Board is currently set at 12 and is divided into three classes, each with a three-year term. Harold A. Wagner will retire from the Board on April 23, 2008. Mr Wagner's term as a director of CIGNA does not expire until 2009, but in accordance with CIGNA's Board Practices, described on page 13, Mr. Wagner is required to retire at the annual meeting of shareholders following his 72^nd birthday.

All nominees have consented to serve, and the Board does not know of any reason why any would be unable to serve. If a nominee becomes unavailable or unable to serve before the annual meeting, the Board can either reduce its size or designate a substitute nominee. If the Board designates a substitute, proxies cast for the original nominee will be deemed cast for the substitute nominee.

The Board of Directors' Nominees for Terms to Expire in April 2011

		Peter N. Larson (68) has been a Director of CIGNA since 1997. He served as the Chairman and Chief Executive Officer of Brunswick Corporation (a producer of recreational consumer products) from 1995 until 2000. His term as a Director of CIGNA expires in 2008.
		Roman Martinez IV (60) has been a Director of CIGNA since 2005. He has been a private investor since 2003. Mr. Martinez served as Managing Director of Lehman Brothers Inc. (an investment banking firm), where he was employed, including by its predecessor firms, from 1971 until 2003. Mr. Martinez is a Director of Alliant Techsystems, Inc. His term as a Director of CIGNA expires in 2008.
		Carol Cox Wait (65) has been a Director of CIGNA since 1995. She has been the President of Boggs, Atkinson, Inc. (a real estate company) since 2003 and is also the General Manager for Artesia, Bellflower and Ramona Senior Centers, a Managing Member of Lakewood Towers LLC and Manager of VCB Bluebird LLC and VCB Palm LLC. Ms. Wait also served as a Director, President and Chief Executive Officer of the Committee for a Responsible Federal Budget (a bi-partisan, educational, non-profit organization) from 1981 until 2003. Her term as a Director of CIGNA expires in 2008.
		William D. Zollars (60) has been a Director of CIGNA since 2005. Mr. Zollars has served as the Chairman, President and Chief Executive Officer of YRC Worldwide, Inc. (formerly Yellow Roadway Corporation, a holding company whose subsidiaries provide regional, national and international transportation and related services) since 1999. Mr. Zollars is a Director of ProLogis Trust and Cerner Corporation. His term as a Director of CIGNA expires in 2008.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ABOVE NOMINEES.

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Directors Retiring in 2008

Harold A. Wagner (72) has been a Director of CIGNA since 1997. He has served as the Non-Executive Chairman of LSI Corporation (formerly Agere Systems Inc., a provider of communications components) since 2001. Mr. Wagner is a Director of PACCAR Inc., United Technologies Corporation and Maersk Inc., a subsidiary of A.P. Moller. Although his term as a Director of CIGNA expires in 2009, he will retire from the Board at the 2008 annual meeting.

Directors Who Will Continue in Office

		Robert H. Campbell (70) has been a Director of CIGNA since 1992. Mr. Campbell served as Chairman of Sunoco, Inc. (a domestic refiner and marketer of petroleum products) from 1992 until 2000, and as Chief Executive Officer from 1991 until 2000. Mr. Campbell is a Director of Vical, Inc. His term as a Director of CIGNA expires in 2010.
		H. Edward Hanway (56) has been a Director of CIGNA since 1999. He has served as the Chairman of the Board of CIGNA Corporation since December 2000, the Chief Executive Officer since January 2000, and President since 1999. He has been associated with CIGNA since 1978. His term as a Director of CIGNA expires in 2009.
		Isaiah Harris, Jr. (55) has been a Director of CIGNA since 2005. Mr. Harris served as the President and Chief Executive Officer of AT&T Advertising & Publishing—East (formerly BellSouth Advertising & Publishing Group, a communications services company) from 2005 until 2007; as President, BellSouth Enterprises, Inc. from 2004 until 2005; and as President, BellSouth Consumer Services and Customer Markets Group from 2000 until 2004. Mr. Harris is a Director of Deluxe Corporation. His term as a Director of CIGNA expires in 2010.
		Jane E. Henney, M.D. (60) has been a Director of CIGNA since 2004. Dr. Henney is a professor at the University of Cincinnati College of Medicine. She served as Senior Vice President and Provost, Health Affairs at University of Cincinnati Academic Health Center (an educational institution) from 2003 until January 2008 and was a Senior Scholar at the Association of Academic Health Centers from 2001 until 2003. Dr. Henney is a Director of AmerisourceBergen Corporation and AstraZeneca PLC. Her term as a Director of CIGNA expires in 2010.

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		James E. Rogers (60) has been a Director of CIGNA since 2007. Mr. Rogers has served as the Chairman of Duke Energy Corporation (an electric power company) since 2007 and as the President, Chief Executive Officer and a director since 2006. He was formerly the Chairman, President and Chief Executive Officer of CINERGY Corp., (which merged with Duke Energy Corporation in 2006) from 1994 until 2006. Mr. Rogers is a Director of Fifth Third Bancorp. His term as a Director of CIGNA expires in 2009.
		Eric C. Wiseman, (52), has been a Director of CIGNA Corporation since 2007. Mr. Wiseman has been Chief Executive Officer of VF Corporation (an apparel manufacturer) since January 2008 and President and a Director since 2006. Prior to that he served as Chief Operating Officer from 2006 to 2007; Executive Vice President, Global Brands from 2005 to 2006; Vice President and Chairman, Sportswear and Outdoor Coalitions from 2004 until 2005; Vice President and Chairman, Global Intimates and Sportswear Coalition from 2003 until 2004; and Vice President and Chairman, Global Intimate Apparel Coalition from 2000 until 2003. His term as a Director of CIGNA expires in 2009.
		Donna F. Zarcone (50) has been a Director of CIGNA since 2005. Ms. Zarcone is President and Chief Executive Officer of D. F. Zarcone & Associates LLC, a strategic advisory consulting firm. She served as the President and Chief Operating Officer of Harley- Davidson Financial Services, Inc. (a provider of wholesale and retail financing, insurance and credit card programs), a wholly-owned subsidiary of Harley-Davidson, Inc., from 1998 until 2006. Ms. Zarcone is a Director of Jones Apparel Group, Inc., a member of the Board of Managers of Wrightwood Capital, a privately held company, and is a Certified Public Accountant. Her term as a Director of CIGNA expires in 2010.

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CORPORATE GOVERNANCE

CIGNA Corporation's Corporate Governance Policies

The Board and its committees periodically review their corporate governance practices with the goal of increasing their effectiveness. Over the years, the Board and its committees have modified their policies and practices to implement developing best practices that the Board has determined are appropriate for CIGNA. These policies and practices are embodied in the Board Practices and the charters of the Audit, Corporate Governance, Finance, and People Resources Committees. The Board Practices, committee charters and CIGNA's Code of Ethics and Compliance Policies are posted at http://www.cigna.com/about_us/governance/index.html. They also are available in print to any shareholder who submits a written request to the Corporate Secretary at our principal executive offices at:

CIGNA Corporation
Two Liberty Place, TL17
1601 Chestnut Street
Philadelphia, PA 19192-1550

Board Structure and Composition

CIGNA's By-Laws require the Board to have at least eight directors, but no more than 16. The Board and its Corporate Governance Committee (CGC) each periodically consider the appropriate size of the Board. There is a strong commitment to a Board composed principally of independent, non-employee Directors. CIGNA Corporation currently has one, and has never had more than two, employee directors.

Process and Criteria for Nominating Directors

Director Selection Policy and Criteria.    The CGC, in consultation with the Board, develops specific criteria to guide director searches. The criteria are as follows:

•

Directors should represent all shareholders.



•

Directors must be free of conflicts of interest.



•

Directors must possess good judgment and the ability to analyze complex business and public issues.



•

Directors must have demonstrated a high degree of achievement in their respective fields.



•

Diversity, in its many forms, is actively pursued.



•

Governing CIGNA effectively requires a wide range of capabilities and professional attributes, among them:



•

financial acumen;



•

insight into the process of developing employees, as well as developing and delivering high-quality products and services that respond directly to customer needs and expectations;



•

familiarity with channels of distribution;



•

awareness of consumer market trends;



•

insight into government relationships and processes;



•

familiarity with processes for developing and implementing effective human resources policies and practices; and



•

familiarity with the challenges of operating businesses in the international marketplace.

11

The chair of the CGC and other members of the Board, as appropriate, interview director candidates prior to the CGC making its recommendation to the Board in the case of a director vacancy or nomination of a candidate by shareholders.

The Board may nominate for election, and fill Board vacancies and new directorships, with only those nominees who agree, among other conditions, to adhere to the Company's majority voting standard that requires directors to tender resignations to the Company conditioned on:

•

the failure to achieve more "for" votes than "against" votes at any future meeting at which they face election; and



•

the Board's acceptance of their resignation following that election.

That tender of resignation cannot be withdrawn unless the Board eliminates the majority voting standard. The CGC will act on an expedited basis to determine whether to accept the resignation and will submit the recommendation for prompt consideration by the Board. The Board expects the director whose resignation is under consideration to abstain from participating in any decision regarding that resignation.

Consideration of Shareholder Suggestions for Director Selection.    The CGC is responsible for reviewing, advising and reporting to the Board regarding the Board's membership and director selection. The CGC welcomes shareholder suggestions for Board nominees. Shareholders who wish the CGC to consider their suggestions for Board nominees should submit their suggestions together with appropriate biographical information and qualifications to the CGC. Correspondence may be addressed to:

Corporate Secretary
CIGNA Corporation
Two Liberty Place, TL17
1601 Chestnut Street
Philadelphia, PA, 19192-1550

The CGC generally considers nominees in October for the following annual meeting.

Accordingly, suggestions for Board nominees should be submitted by October 1^st to ensure consideration for the following annual meeting. Shareholder suggestions for Board nominees are evaluated using the same criteria described above.

Third-Party Director Search Firm.    The CGC retains SpencerStuart, a third party search firm, to assist the CGC in identifying and evaluating candidates for Board membership who best match CIGNA's director recruitment criteria.

Shareholder Communications

The Board maintains an address for receipt of shareholder and interested party communications. Shareholders and interested parties may contact the Board of Directors, the non-employee directors, or specific individual directors by writing to them at:

Director Access
Attn: Corporate Secretary
CIGNA Corporation
Two Liberty Place, TL17
1601 Chestnut Street
Philadelphia, PA 19192-1550

12

All communications other than routine commercial solicitations and opinion surveys will be compiled by the Corporate Secretary and periodically submitted to the Board or, if addressed only to individual directors, to such individual directors. The Corporate Secretary also will promptly advise the appropriate member of management of any concerns relating to CIGNA's products or services, and the Corporate Secretary will notify the Board of the resolution of those concerns.

Other Board Practices

Limit on Directorships.    Each director who is also a chief executive officer of a public company should not serve on more than two boards of public companies in addition to CIGNA's Board (for a total of three public company directorships). Each director who is not a chief executive officer of a public company should serve on no more than four boards of public companies in addition to CIGNA's Board (for a total of five such directorships). CIGNA's current directors have five years from the effective date of this provision of the Board Practices, October 24, 2007, to comply with its requirements.

Board Meetings.    The Board meeting schedule and agenda are developed with direct input from directors. The duration of each meeting varies as business needs dictate. The Board meets in executive session without the Chief Executive Officer at the conclusion of most Board meetings and, at least twice a year, meets in extended executive session without the Chief Executive Officer. In 2007, the independent directors met in executive session without the Chief Executive Officer at all of the in-person Board meetings.

Access to Management and Independent Advisors.    Independent directors have regular access to senior managers and employees. In addition, the Board and its committees are able to access and retain appropriate independent advisors as they deem necessary or appropriate.

Continuing Education and Self-Evaluation.    The Board and its committees regularly devote time to continuing director education. The Board is regularly updated on CIGNA's businesses, strategies, customers, operations and employee matters, as well as external trends and issues that affect the Company. Directors are also encouraged to attend continuing education courses at CIGNA's expense. The Board and each of its committees regularly discuss their performance, and annually conduct a self-assessment, and the CGC annually conducts a review of each individual director's performance. On an ongoing basis, directors offer suggestions and alternatives intended to further improve Board performance.

Rotating Presiding Director Structure.    Each committee has a chairperson who is an experienced independent director. In order to maintain its balanced approach to governance, facilitate the effective functioning of the Board, and benefit from the skills, strength and experience of its committee chairpersons, CIGNA has established a rotating presiding director structure whereby the chairperson of each committee presides over regularly scheduled non-management executive sessions of his or her committee meetings and, on a rotating basis, executive sessions of board meetings, determined by reference to the subject matter being discussed. Committee chairpersons regularly communicate with the staff officer assigned to his or her committee, and coordinate with their respective staff officers to develop meeting agendas and materials.

Resignation and Retirement.    If a director's principal position at the time of appointment to the Board is discontinued, that director is required to tender his or her resignation to the CGC. The CGC will then recommend to the Board the action, if any, to be taken with respect to the resignation. In any event, a director is required to retire no later than the annual meeting of shareholders coincident with or following his or her 72^nd birthday.

13

Board of Directors and Committee Meetings, Membership, Attendance and Independence

Meetings and Membership.    The full Board held 8 meetings during 2007. From time to time, the Board or its committees act by unanimous written consent when it is impracticable for them to meet.

The following table shows the current membership, summary of responsibilities and number of meetings in 2007 for each of the committees. Additional information about the committees can be found in the committee charters which are posted at http://www.cigna.com/about_us /governance/committees.html.

*

Meets independence standards described below.

14

All members of the Committee are "financially literate." The Board of Directors has determined that Donna Zarcone is the "audit committee financial expert," as defined in the applicable rules of the Securities and Exchange Commission, and meets the qualifications for independence as described below.

Attendance.    During 2007, Board and committee attendance averaged 94.75% for the Board as a whole. Each incumbent director attended at least 85% of the combined total meetings of the Board and committees on which he or she served during 2007. The Board encourages independent directors to attend the annual meeting of shareholders. Ten directors, including Robert H. Campbell, Jane E. Henney, M.D., Peter N. Larson, Roman Martinez IV, James E. Rogers, Harold A. Wagner, Carol Cox Wait, Eric C. Wiseman and Donna F. Zarcone, attended the 2007 annual meeting, which was chaired by H. Edward Hanway.

Independence.    CIGNA's Board has adopted director independence standards that can be found
in the Board Practices posted on CIGNA's website at http://www.cigna.com/about_us/governance/board_practices.html. CIGNA's director independence standards provide that a director is not independent if:

•

the director is, or has been within the last three years, an employee of CIGNA, or an immediate family member (defined as a spouse, parent, child, sibling, mother or father-in-law, son or daughter-in-law, brother or sister-in-law or anyone (other than a domestic employee) who shares the director's home) is, or has been within the last three years, an executive officer of CIGNA;



•

the director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from CIGNA, other than director and Committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);



•

the director is a current partner or employee, or an immediate family member is a current partner, of CIGNA's internal or external auditor;



•

the director has an immediate family member who is a current employee of CIGNA's internal or external auditor and who participates in such firm's audit, assurance or tax compliance (but not tax planning) practice;



•

the director or an immediate family member was within the last three years (but is no longer) a partner or employee of CIGNA's internal or external auditor and personally worked on CIGNA's audit within that time;



•

the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of CIGNA's present executives at the same time serves or served on that company's compensation committee; or



•

the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, CIGNA for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or two percent of the other company's consolidated gross revenue.

The Company's director independence standards further provide that certain relationships are not material and do not impair a director's independence. In particular, a director's independence will not be impaired if:

•

a director is an executive officer of another company in which CIGNA owns a common stock interest, and the amount of CIGNA's common stock interest is less than five percent of the total shareholders' equity of the company for which the director serves as an executive officer;

15

•

a director serves as a member of the board of directors of another company that makes payments to or receives payments from CIGNA in the ordinary course of business;



•

a director's immediate family member serves as an employee or director (but does not serve as an executive officer, or partner or in another position with principal policy-making responsibilities) of an organization that makes payments to or receives payments from CIGNA in the ordinary course of business;



•

a director is an executive officer of another company that owns less than five percent of the total shareholders' equity of CIGNA;



•

a director, his/her spouse or anyone (other than domestic employees) sharing the home of a CIGNA director serves as an executive officer, director or trustee (or equivalent) of a charitable organization, and CIGNA's discretionary charitable contributions to the organization during the past year are less than the greater of $100,000 or two percent of that organization's annual gross revenue (CIGNA's automatic matching of employee charitable contributions will not be included in the amount of CIGNA's contributions for this purpose);



•

a director or his immediate family members purchases insurance, services or other products of CIGNA, or uses CIGNA's financial services, all on terms and conditions similar to those available to other similarly situated persons;



•

a director is a member in the same professional association, social, fraternal or religious organization or club as an executive officer or other director of CIGNA;



•

a director currently or previously attended the same educational institution as an executive officer or other director of CIGNA;



•

a director serves on the board of directors of another public company on which an executive officer or other director of CIGNA also serves as a director, except for prohibited compensation committee interlocks; or



•

a director serves as an executive officer of a public company that also uses CIGNA's registered independent public accounting firm.

For any relationship outside the guidelines described above, the determination of whether the relationship is material or not, and therefore whether the director would be independent or not, shall be made by the directors who satisfy the independence guidelines set forth above.

The standards of independence described above meet the independence standards specified in the listing standards of the New York Stock Exchange. Based on the standards described above and the Board's review, the Board affirmatively determined that:

•

the following directors, comprising all of the directors and director nominees, except for Mr. Hanway, are independent: Messrs. Campbell, Harris, Larson, Martinez, Rogers, Wagner, Wiseman and Zollars, Dr. Henney, and Mmes. Wait and Zarcone; and



•

all members of the Audit Committee, Corporate Governance Committee, Finance Committee and People Resources Committee are independent.

In assessing directors' independence, the Board and CGC reviewed directors' responses to a questionnaire that solicited information about their relationships (and the relationships of their immediate families) with CIGNA and other entities (affiliated entities), as well as material provided by management related to CIGNA's transactions with and investments in those entities. In applying the independence standards, the Board and the CGC considered that:

•

From time to time during the past three years, CIGNA and its subsidiaries engaged in arms-length, ordinary course business transactions with corporations or organizations with which

16

Messrs. Harris, Martinez, Rogers, Wagner, Wiseman and Zollars; Mmmes. Wait and Zarcone; and Dr. Henney, or members of their immediate families, serve as an executive officer, trustee or partner. In each case, the amount paid to or received from these companies in each of the last three years was significantly less than 2% of annual gross revenue or the $1 million threshold as described in CIGNA's director independence standards—and in all cases was less than 1% of total revenue of the other organization.

•

CIGNA made a charitable contribution to the United Way, for which Mr. Zollars serves as a Director.

Certain Transactions

The Company has not implemented a written policy concerning the review of related party transactions, but compiles information about transactions between CIGNA and its directors and officers, their immediate family members, and their affiliated entities, including the nature of each transaction and the amount involved. The CGC annually reviews and evaluates this information, with respect to directors, as part of its assessment of each director's independence and presents its assessment to the full Board of Directors. The Company's Disclosure Committee reviews the transaction information with respect to both directors and executive officers to determine whether any transaction may be subject to disclosure under applicable rules regarding transactions with related persons, and submits a description of any transaction subject to such disclosure to the Audit Committee for review.

In addition, all directors, officers and employees of CIGNA are subject to the Company's Conflict of Interest Policy, which requires directors to inform the Corporate Secretary, and employees to inform their supervisors, of any existing or proposed relationship, financial interest or business transaction that could, or might appear to be, a conflict of interest. Any reported transactions are to be brought to the attention of the CIGNA's general auditor for review and disposition.

Based on a review of the transactions between CIGNA and its directors and officers, their immediate family members, and their affiliated entities, CIGNA has determined that, since the beginning of 2007, it was not a party to any transaction in which the amount involved exceeds $120,000 and in which any of CIGNA's directors, executive officers or greater than five percent stockholders, or any of their immediate family members or affiliates, have a direct or indirect material interest.

Processes and Procedures for Determining Executive and Director Compensation

Executive Compensation.    Pursuant to its charter, the People Resources Committee (PRC) oversees the compensation program for the Company's executive officers. In fulfilling its responsibilities, the PRC actively seeks to enhance its effectiveness in reinforcing strong links between executive pay and performance. Examples of actions that the PRC has taken include:

•

annually reviewing the link between pay and performance;



•

hiring a compensation consultant to advise on executive compensation issues;



•

establishing semi-annual reviews of detailed compensation tally sheets for all executive officers; and



•

holding executive sessions, without CIGNA management present, at every in-person PRC meeting.

The PRC regularly reviews CIGNA's compensation programs against the Company's strategic goals, industry practices, and emerging trends as well as to ensure alignment with shareholder interests. The PRC retains the flexibility to modify the programs to address changes in the competitive landscape. To help it fulfill its responsibilities, the PRC has engaged Mercer (the Compensation Consultant).

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The Compensation Discussion & Analysis (CD&A), which begins on page 33, describes the PRC's processes and procedures with respect to compensation of the named executive officers.

Director Compensation.    The charter of the CGC provides that it will review, advise, and report to the Board on the compensation of active and retired directors, including assisting in the administration of director compensation plans as authorized by the Board. The CGC reviews the non-employee director compensation program annually for competitiveness and appropriateness of compensation levels and program design and then makes recommendations to the Board for action.

To help it fulfill its responsibilities, the CGC has also engaged Mercer as its Compensation Consultant. The Compensation Consultant is directly responsible to the CGC for advising the CGC with respect to non-employee director compensation. The primary role of the Compensation Consultant is to provide the CGC with objective analysis and advice about benchmarking, pay practices at competitors, tax, compensation magnitude and mix, program structure, and alignment with shareholder interests.

The CGC requests information and recommendations from the Compensation Consultant as it deems appropriate in order to assist it in structuring, evaluating, and updating CIGNA's director compensation programs, practices and plans. The CGC has also asked the Compensation Consultant to advise it on industry practices and emerging trends in Director Compensation.

With respect to director compensation, the Compensation Consultant contacts the Executive Vice President, Human Resources and Services to obtain information needed to carry out its assignments and contacts the General Counsel and members of her staff regarding legal issues. At the request of the CGC, one or more representatives of the Compensation Consultant attend certain CGC meetings in order to present information and recommendations and to be available to answer questions and advise the CGC.

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INFORMATION ABOUT ITEM 2. RATIFICATION OF APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS CIGNA'S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

The Audit Committee approved the appointment of PricewaterhouseCoopers LLP as CIGNA's independent registered public accounting firm for 2008. As a matter of good corporate governance, the Board is seeking shareholder ratification of the appointment even though ratification is not legally required. If shareholders do not ratify this appointment, the Audit Committee will reconsider PricewaterhouseCoopers' appointment.

PricewaterhouseCoopers LLP has served as the independent registered public accounting firm for CIGNA and its subsidiaries since 1983, and performed the same role for Connecticut General Corporation, a predecessor company of CIGNA, and its subsidiaries since 1967. A representative from PricewaterhouseCoopers LLP will attend the annual meeting, may make a statement, and will be available to respond to appropriate questions.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS
CIGNA'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

Policy for the Pre-Approval of Audit and Non-Audit Services

The Audit Committee pre-approves all audit services provided by CIGNA's accounting firms and all non-audit services provided by the Company's principal independent auditors. Specifically:

•

The full Audit Committee approves all audit, review and attest services and their related fees.



•

At the first Audit Committee meeting of each calendar year, the general auditor for the Company presents to the full Audit Committee a schedule, accompanied by detailed documentation, listing all permissible non-audit services expected to be performed by the Company's independent registered public accounting firm during the calendar year. In the schedule, the independent auditors include a written description of the scope of service, fee structure and other arrangements relating to any permissible tax service. The Audit Committee reviews the schedule and documentation, and pre-approves the non-audit services it deems appropriate. For additional permissible non-audit services that arise during the calendar year, the general auditor periodically presents an updated schedule reflecting the additional services for review and consideration for pre-approval by the Audit Committee. After the general auditor's presentation of the schedules as described above and, if applicable, a discussion with the Company's independent registered public accounting firm regarding the potential effects of any permissible tax services on the independence of the Company's independent registered public accounting firm, the Audit Committee will approve those non-audit services it deems appropriate and necessary.



•

The policy permits the pre-approval of additional permissible non-audit services by the Audit Committee Chair and/or another Audit Committee member designated by the Chair if the full Audit Committee is unavailable to review and approve these additional services. The Chair or his or her designee reports to the full Audit Committee any additional services approved in this manner at its next regularly scheduled meeting.



•

The general auditor reports to the Audit Committee at each meeting on fees incurred for services performed.

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Fees to Independent Registered Public Accounting Firm

Aggregate fees billed for professional services rendered by PricewaterhouseCoopers LLP for the audit of financial statements for the fiscal years ended December 31, 2007 and December 31, 2006, and fees billed for other services rendered by PricewaterhouseCoopers LLP during those periods were as follows:

⁽¹⁾

Audit Fees for 2006 include fees for audit of 2006 financial statements that had not yet been billed at the time CIGNA's 2007 Proxy Statement was filed.

•

Audit fees include: the audit of annual financial statements; the review of quarterly financial statements; the performance of statutory audits; quarterly comfort letter work; audit of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act; and the evaluation of management's assertions concerning the effectiveness of internal controls over financial reporting, which procedure is no longer required for 2007.

•

Audit-related fees include: assurance and related services that were reasonably related to the audit of annual financial statements and reviews of quarterly financial statements, but not reported under "Audit Fees." Audit-related fees included: employee benefit plan audits; internal control reviews (e.g., Statement on Auditing Standards No. 70 reports); consultation concerning financial accounting and reporting standards; and regulatory examinations. In 2006, audit-related fees also included work paper review, actuarial work, and agreed upon procedures and in 2007, audit-related fees also included due diligence for an acquisition transaction.

•

Tax fees include: tax recovery services, tax consulting and tax compliance services.

•

All other fees include: professional services rendered by PricewaterhouseCoopers LLP not reported in any other category and include pre-approved business process advisory and consulting services.

Audit Committee Report

CIGNA has maintained an independent Audit Committee for many years. It operates under a written charter adopted by the Board of Directors. During 2007, John F. Olson, Esq., a partner at Gibson, Dunn & Crutcher, acted as independent counsel to the Audit Committee.

All of the members of the Audit Committee are independent (as defined in the listing standards of the New York Stock Exchange and applicable federal regulations, and CIGNA's independence standards).

CIGNA's management has primary responsibility for preparing CIGNA's financial statements and establishing and maintaining financial reporting systems and internal controls. Management is also responsible for reporting on the effectiveness of CIGNA's internal controls over financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of CIGNA's consolidated financial statements and issuing a report on these financial statements. The independent registered public accounting firm is also responsible for, among other things, issuing an attestation report on the effectiveness of CIGNA's internal control over financial reporting based on their audit. As provided in its charter, the Audit Committee's responsibilities include oversight of these

20

processes. As part of its oversight responsibilities, the Audit Committee meets with CIGNA's general auditor, Chief Accounting Officer and independent registered public accounting firm, with and without management present, to discuss the adequacy and effectiveness of CIGNA's internal controls and the quality of the financial reporting process.

In this context, before CIGNA filed its Annual Report on Form 10-K for the year ended December 31, 2007 with the Securities and Exchange Commission, the Audit Committee:

•

Reviewed and discussed with CIGNA's management the audited financial statements included in the Form 10-K and considered management's view that the financial statements present fairly, in all material respects, the financial condition and results of operations of CIGNA.



•

Reviewed and discussed with CIGNA's management and with the independent registered public accounting firm, PricewaterhouseCoopers LLP, the effectiveness of CIGNA's internal controls over financial reporting as well as management's report and PricewaterhouseCoopers LLP's attestation on the subject.



•

Discussed with PricewaterhouseCoopers LLP, matters related to the conduct of their audit that are required to be communicated by auditors to audit committees and matters related to the fair presentation of CIGNA's financial condition and results of operations, including critical accounting estimates and judgments.



•

Received the required communications from PricewaterhouseCoopers LLP that discloses all relationships that in PricewaterhouseCoopers LLP's professional judgment may reasonably be thought to bear on their independence and to confirm their independence. Based on these communications, the Audit Committee discussed with PricewaterhouseCoopers LLP its independence from CIGNA.



•

Discussed with each of CIGNA's Chief Executive Officer and Chief Financial Officer their required certifications contained in CIGNA's Annual Report on Form 10-K for the year ended December 31, 2007.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that such audited financial statements be included in CIGNA's Annual Report on Form 10-K for the year ended December 31, 2007 for filing with the Securities and Exchange Commission.

Audit Committee:

Robert H. Campbell, Chairman
Jane E. Henney, M.D.
Roman Martinez IV
Eric C. Wiseman
Donna F. Zarcone

21

INFORMATION ABOUT ITEMS 3, 4 AND 5 CONCERNING PROPOSED
AMENDMENTS TO THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION

As discussed in the Company's 2007 Proxy Statement, in February 2007, the Board of Directors adopted a resolution in which it committed to support amendments to CIGNA's Restated Certificate of Incorporation and By-Laws that would provide for a simple majority vote requirement instead of the eighty percent (80%) supermajority voting requirement relating to (1) any amendment of the By-Laws by CIGNA's shareholders (other than an amendment to Article Three, Section Two of the By-Laws, which concerns number, qualifications, election and term of office for CIGNA's Board of Directors) and (2) the approval of certain business combinations.

To implement these changes, the CGC, as part of its annual review of the Company's governance structure, recommended amendments to CIGNA's Restated Certificate of Incorporation and By-Laws. Upon the recommendation of the CGC, the Board of Directors approved amendments to Article Eight of the CIGNA Corporation By-Laws that replaced the eighty percent (80%) supermajority voting requirement relating to any amendment of the By-Laws by CIGNA's shareholders (other than an amendment to Article Three, Section Two described above) with a simple majority. These amendments to the By-Laws will be effective immediately after the annual meeting. The amendments to Article Eight, as well as other changes to the By-laws approved by the Board are reflected in the Amended and Restated CIGNA Corporation By-Laws attached as Appendix A to this proxy statement. Because CIGNA's By-Laws permit the Board of Directors to propose and approve amendments to the By-Laws without shareholder approval, the Amended and Restated By-Laws are not being submitted for shareholder consideration at the annual meeting.

Upon the recommendation of the CGC, the Board of Directors also approved changes to the Certificate of Incorporation, some of which correspond to the changes made to the Company's By-Laws. Under Delaware law, the proposed amendments to the Company's Certificate of Incorporation require shareholder approval. The proposed amendments to the Certificate of Incorporation have been proposed as separate items (as described in Items 3, 4 and 5, below) due to varying subject matter or shareholder vote required to approve each of the proposed amendments. This approach will allow the Company's stockholders to consider and vote on each of the proposed amendments so that any and all amendments approved by the holders of the required number of shares of the Company's common stock may be implemented. The text of the amendments to the Certificate of Incorporation proposed under Items 3, 4 and 5 are set forth in Appendix B, with deletions indicated by strikeout and additions indicated by underline, and include conforming changes in the numbering and cross-references in the Certificate of Incorporation that will be made to the extent the shareholders approve the amendments. The current provisions and proposed amendments to the Company's Restated Certificate of Incorporation that are described below are qualified in their entirety by reference to the actual text as set forth in Appendix B. A description of each of the proposed amendments follows.

22

ITEM 3: APPROVAL OF THE PROPOSED AMENDMENTS TO ARTICLE
FOURTH OF THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION

On October 24, 2007, the Board of Directors approved the Restated Certificate of Incorporation, subject to approval by shareholders at the 2008 annual meeting. The Restated Certificate of Incorporation includes proposed amendments to Article Fourth that eliminate the provisions that relate to the Company's Junior Participating Preferred Stock, Series D. The stock was created to be issued under the Company's Shareholder Rights Agreement, which expired on August 4, 2007. The Board of Directors will not adopt a new shareholder rights agreement without first seeking shareholder approval unless the Board determines that adoption of a shareholder rights agreement without prior shareholder approval is in the best interests of CIGNA shareholders. Under Article Fourth, the Board of Directors retains the express authorization to issue shares of preferred stock and the Board may designate the voting powers, preferences, rights, qualifications, limitations and restrictions of such preferred stock.

The proposed amendments to Article Fourth of the Restated Certificate of Incorporation require the affirmative vote of a majority of the Company's outstanding common stock.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE PROPOSED AMENDMENTS TO ARTICLE FOURTH OF THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION

23

ITEM 4: APPROVAL OF THE PROPOSED AMENDMENTS TO ARTICLE FIFTH
OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION

On October 24, 2007, the Board of Directors approved the Restated Certificate of Incorporation, subject to approval by shareholders at the 2008 annual meeting. The Restated Certificate of Incorporation includes proposed amendments to Article Fifth of the Company's Certificate of Incorporation that mirror the amendments to Article Eight of the CIGNA Corporation By-Laws that have been approved by the Board of Directors (described on page 22). These proposed amendments replace the 80% supermajority voting requirement relating to any amendment of the By-Laws by CIGNA's shareholders (other than an amendment to Article Three, Section Two of the By-Laws which concerns number, qualifications, election and term of office for CIGNA's Board of Directors), with a simple majority voting requirement. The Board of Directors would continue to be able to adopt, amend or repeal any provision of the By-Laws without any vote of the stockholders of the Company.

The proposed amendments to Article Fifth of the Restated Certificate of Incorporation require the affirmative vote of a majority of the Company's outstanding common stock.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE PROPOSED AMENDMENTS TO ARTICLE FIFTH OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION.

24

ITEM 5: APPROVAL OF THE PROPOSED AMENDMENTS TO ARTICLE TENTH
OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION

On October 24, 2007, the Board of Directors approved the Restated Certificate of Incorporation, subject to approval by shareholders at the 2008 annual meeting. The Restated Certificate of Incorporation includes proposed amendments to Article Tenth of the Company's Certificate of Incorporation, which provide for a simple majority voting requirement to replace the eighty percent (80%) supermajority voting requirement relating to (1) the approval of certain business combinations, as defined in the Restated Certificate of Incorporation, and (2) any amendment of Article Tenth of the Company's Certificate of Incorporation.

The proposed amendments to Article Tenth of the Restated Certificate of Incorporation require the affirmative vote of the holders of at least eighty percent (80%) of the Company's outstanding common stock.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR APPROVAL OF THE PROPOSED AMENDMENTS TO ARTICLE TENTH OF THE
COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.

25

DIRECTOR COMPENSATION

Non-Employee Director Compensation Program

The following chart summarizes the components of the Non-Employee Director Compensation Program, which are more fully described below:

Board Retainer.    Each director receives an annual Board membership retainer initially valued at $225,000. Of that amount, $75,000 is fixed compensation paid in cash, and $150,000 is mandatorily deferred for three years in the form of deferred stock units, whose value tracks that of CIGNA common stock.

The cash portion of the retainer is payable in quarterly installments of $18,750 ($75,000 annually). The stock unit portion of the retainer is paid through the quarterly award of a number of deferred stock units with an initial value of $37,500 ($150,000 annually). The number of deferred stock units awarded to a director each quarter is determined based on the closing price of CIGNA common stock on the last business day of the second month of that quarter. Dividend equivalents are credited on deferred stock units and treated as reinvested in additional whole deferred stock units. Three years after the original award, the payout per awarded stock unit is calculated based on the closing price of CIGNA common stock on the last business day of the second month of the quarter in which the third anniversary of the grant date falls, and payment is made in cash the following month. If service as a director ends before completion of the three-year period, valuation and payment are made in the quarter following separation from service on the same basis as described above.

The deferred stock units awarded under the Non-Employee Director Compensation Program are not subject to forfeiture and are a general unsecured and unfunded obligation of the Company.

Committee Retainers.    Each director receives $10,000 annually for each committee membership (excluding the Executive Committee for which there is no retainer) and committee chairs receive an additional $5,000 annually for each committee chaired. These amounts are paid in cash in quarterly installments at the same time that the cash portion of the Board retainer for the relevant quarter is paid.

Deferral of Payments.    Directors may elect to defer the payment of their Board and Committee retainers beyond their designated payment date under the Deferred Compensation Plan of 2005 for

26

Directors of CIGNA Corporation. Under the Deferred Compensation Plan, any portion of the Board or Committee retainers that is voluntarily deferred is credited to a director's deferred compensation account. Directors are offered a choice of hypothetical funds whose rates of return, gains and losses are credited to that account. The funds offered to directors are selected from those offered to all CIGNA employees under the CIGNA 401(k) Plan. Directors may elect to receive payments under the Deferred Compensation Plan in a lump sum or in installments. The payments are made (or, for installment method payment elections, begin) in January of the year following separation from service as a director.

Amounts deferred under the Deferred Compensation Plan are not subject to forfeiture. Deferred compensation balances are a general unsecured and unfunded obligation of the Company.

Amended and Restated Restricted Share Equivalent Plan for Non-Employee Directors

From 1989 to 2005, upon joining the Board of Directors, non-employee directors were awarded either a one-time grant of 13,500 shares of CIGNA restricted common stock (adjusted to reflect CIGNA's three-for-one stock split on June 4, 2007) for directors who joined the Board before October 1, 2004 or 13,500 restricted share equivalents (adjusted to reflect CIGNA's three-for-one stock split on June 4, 2007) for directors who joined the Board after October 1, 2004, under the Amended and Restated Restricted Share Equivalent Plan for Non-Employee Directors of CIGNA Corporation (Restricted Share Equivalent Plan). Effective January 16, 2006, the Restricted Share Equivalent Plan was frozen and no new awards were made to individuals joining CIGNA's Board of Directors after that date.

The Restricted Share Equivalent Plan has been amended from time to time to, among other things, change the vesting periods and eliminate the provisions related to restricted stock grants (as those grants have all either vested or been forfeited). The current provisions of the Restricted Share Equivalent Plan provide for the vesting of restricted share equivalents issued under the plan on the later of: (1) six months after the date of grant; or (2) the earliest of nine years of continuous service on the Board, attainment of age 65, change of control, death or disability of the director. However, in the event a director's resignation is accepted because he or she failed to receive the required majority vote for reelection and the director's restricted share equivalents have not yet vested, then a pro-rated portion of the director's restricted share equivalents, determined by the number of complete months the director served on the Board, shall vest effective as of the date of the director's resignation. As a result of the resignation, any restricted share equivalents that are not otherwise vested as described above, are forfeited, except to the extent that a majority of the Board of Directors (other than the separating director) approves their vesting.

As of the end of 2007, Messrs. Harris, Martinez and Zollars, Dr. Henney and Ms. Zarcone each have unvested grants of restricted share equivalents under the Restricted Share Equivalent Plan. Payment of the value of vested restricted share equivalents is made in cash after a director's separation from service. The payout is calculated based on the closing price of CIGNA common stock on the director's last business day of service with CIGNA and payment is made in cash within 45 days thereafter.

Each year that a restricted share equivalent is outstanding under the Restricted Share Equivalent Plan, a director shall receive a lump sum payment equal to the amount of any dividends declared and paid on a share of CIGNA common stock during that year (to the extent that the record date for any such dividend occurs while the restricted share equivalent is outstanding).

Insurance Coverage

CIGNA provides to each director, at no cost to him or her, group term life insurance coverage in the amount of the annual board member retainer ($225,000), and travel accident insurance coverage in the amount of three times the annual board member retainer ($675,000). Directors may purchase or participate in, through the payment of premiums on an after-tax basis, additional life insurance,

27

medical/dental care programs, long-term care, property/casualty personal lines, and various other insurance programs available to most CIGNA employees. In addition, directors may elect to be covered by worldwide emergency assistance services. This program provides international emergency medical, personal, travel and security assistance, and is also currently available to CIGNA executive officers and certain other CIGNA employees who frequently travel abroad for business.

Financial Planning and Matching Charitable Gift Program

Directors may participate in the same financial planning and tax preparation program available to CIGNA executive officers. Under this program, CIGNA will reimburse directors for financial planning services that are provided by firms designated by CIGNA and for tax preparation services. Directors may also participate in the matching charitable gift program available to CIGNA employees, under which CIGNA will make a matching charitable gift of up to $5,000 annually.

Post-Termination Compensation

Benefits.    Each director who commenced service between January 1, 1997 and January 1, 2006 is eligible, upon separation from service with at least nine years of Board service, to continue to (1) participate for two years in the medical/dental care programs offered by CIGNA to retired employees, through the payment of premiums by the director on an after-tax basis, and (2) use for one year, financial planning and tax preparation services in the amount of up to $5,000, paid by CIGNA. CIGNA will also provide eligible retired directors, at no cost to the director, with $10,000 of group term life insurance coverage for life. In addition, all directors may, at their own expense and if otherwise eligible, continue other life insurance, long-term care insurance and property/casualty personal lines insurance pursuant to the terms of the applicable policies. New directors who commence service on the Board after January 1, 2006 are not eligible for these benefits.

Retirement Payments.    Before January 1, 1997, CIGNA maintained a retirement plan for directors who terminated service after serving on the CIGNA Board (or the Board of a predecessor company) for at least five years and after reaching age 60. Under this plan retired directors received, in a lump sum or in annual installments, fees based upon their retainer and length of service. Effective December 31, 1996, this retirement plan was frozen. Payments are made under this plan only to eligible directors who retired before 1997 and directors who had vested in the plan as of December 31, 1996.

From January 1, 1997 to December 31, 2005, CIGNA directors participated in a revised retirement plan under which an annual credit was made to a deferred compensation account established for each director. This revised retirement plan was available to directors who were not fully vested in the former retirement plan when it was frozen on December 31, 1996 and to those who joined CIGNA's board after 1996. In addition to the annual credit, a one-time credit equal to the director's accumulated unvested benefits under the former retirement plan was made in 1997 to those directors who had not vested in the former plan. The amounts credited to a director's deferred compensation account under the revised retirement plan were invested in hypothetical shares of CIGNA common stock. The per share price for the one time credit in 1997 was equal to the average closing price of CIGNA common stock over the last ten business days of 1996.

Hypothetical dividends equal to the amount of actual dividends paid on shares of CIGNA common stock are credited to a director's deferred compensation account and are hypothetically reinvested in one or more of the available hypothetical funds. See Deferral of Payments on page 26 for a discussion of the terms of the Deferred Compensation Plan for Directors of CIGNA Corporation.

Other Deferred Amounts.    Other amounts deferred by a director under the Deferred Compensation Plan are generally paid (or, for installment method payment elections, payments begin) in January of the year after the director's separation from service. Deferral under the current Non-Employee Director Compensation Program is discussed on page 26.

28

Director Stock Ownership

Stock Ownership Guidelines.    Directors are expected to own $250,000 in any combination of CIGNA common stock, deferred stock units, and restricted share equivalents within three years of joining the Board. Prior to 2006, directors were required to either invest a portion of their Board retainer in shares of CIGNA common stock or defer a portion of their retainer in hypothetical shares of CIGNA common stock.

Common Stock, Stock Unit, Share Equivalent and Hypothetical Stock Ownership.    The table below shows the number of shares of CIGNA common stock owned by each of the Company's directors as well as any share equivalents, stock units and hypothetical shares of CIGNA stock credited to a director's deferred compensation account on a mandatory or voluntary basis, as of December 31, 2007.

⁽¹⁾

Restricted share equivalents, granted under the Restricted Share Equivalent Plan, are described on page 27; deferred stock units, awarded as a portion of the Board retainer, are described on page 26; and hypothetical shares of CIGNA common stock, credited to a director's deferred compensation account under the Deferred Compensation Plan of 2005 for Directors of CIGNA, are described on pages 26 and 27.

29

Director Compensation Table⁽¹⁾

The table and the accompanying footnote include information about 2007 compensation for members of CIGNA's Board of Directors, which consisted of cash retainer payments, compensation cost incurred by CIGNA for various share equivalent awards, matching charitable awards and company-paid life insurance premiums.

⁽¹⁾

As described on page 26, compensation for members of CIGNA's Board of Directors includes both cash compensation and deferred stock units accounted for under Statement of Financial Accounting Standards (SFAS) No. 123(R), Share-Based Payment (SFAS 123R). The following supplemental table to the Director Compensation Table provides an analysis of compensation cost incurred by the Company in 2007.

⁽ⁱ⁾

Messrs. Campbell, Larson, and Wagner and Ms. Wait each serve as a committee chair and as a member of another committee. Messrs. Harris, Martinez, Rogers, Wiseman and Zollars, Dr. Henney and Ms. Zarcone each serve as a member of two committees. Mr. Wiseman joined the Board of Directors in April 2007; accordingly, his retainers reflect three fiscal quarters of service. Mr. Rogers was appointed to the Finance and PRC committees effective in April 2007. See page 26 for additional information regarding the Board retainer.

(ii)

See page 26 for additional information about the portion of the Board retainer granted in deferred stock units.

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(iii)

The values in this column represent the compensation cost to the Company in 2007 for various share equivalent awards, recognized in accordance with SFAS 123R. Because these awards are paid in cash, the ultimate compensation cost is the fair value of the awards on the settlement date. Until that date, annual compensation cost includes: the fair value at grant date for current year awards; any changes in fair value for unpaid awards during each year based on the closing price of CIGNA's common stock; and the fair value of hypothetical dividends awarded in additional share equivalents or paid in cash. Accordingly, the values in the Stock Awards column include increases in the fair values of awards granted in 2007 and prior years as well as the fair value and increases in fair value of hypothetical dividends granted in the form of additional deferred stock units or paid in cash.

For details on the aggregate number of outstanding equity awards on December 31, 2007 for directors, see the Director Aggregate Outstanding Equity Awards Table on page 32.

(iv)

This column includes:

  •  matching charitable awards made by CIGNA as part of its matching gift program (also available to most CIGNA employees) of an aggregate of $5,000 each for Dr. Henney, Mr. Larson and Ms. Zarcone; $4,500 for Mr. Campbell; and $1,300 for Ms. Wait; and

  •  the dollar value of each director's company-paid life insurance premiums (also available to most CIGNA employees).

This column does not include the value of premiums, if any, paid by the directors for additional life insurance, medical/dental care programs, long-term care, property/casualty personal lines, and various other insurance programs that are also available to most CIGNA employees and are described on pages 27 and 28.

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Director Aggregate Outstanding Equity Awards Table

This table lists each director's total number of share equivalent awards outstanding on December 31, 2007. The table does not include any CIGNA common stock purchased by a director or any share equivalents resulting from voluntary deferral of cash compensation invested in the CIGNA stock fund. The shares of CIGNA common stock granted pursuant to the Amended and Restated Restricted Share Equivalent Plan for Non-Employee Directors of CIGNA Corporation, described on page 27, and the shares of CIGNA common stock acquired pursuant to the pre-2006 requirement to invest a portion of the Board retainer in CIGNA common stock, as described on page 29, have either vested or have been forfeited and, therefore, are not reflected in this table.

⁽¹⁾

This column includes the equity portion of the 2007 (and any previous year's) Board member retainer granted in CIGNA deferred stock units and any dividend equivalents (see page 26 for additional information about the Board retainer).

⁽²⁾

This column includes restricted share equivalents granted pursuant to the Amended and Restated Restricted Share Equivalent Plan for Non-Employee Directors of CIGNA Corporation as well as any dividend equivalents (see page 27 for additional information about these grants).

⁽³⁾

This column includes hypothetical shares of CIGNA common stock acquired pursuant to the pre-2006 requirement to invest a portion of the Board retainer in shares of hypothetical CIGNA common stock as well as any hypothetical dividends earned on those hypothetical shares.

⁽⁴⁾

This column includes hypothetical shares of CIGNA common stock credited to directors' deferred compensation accounts under the terms of the retirement plan in effect between 1997 and 2005 as described on page 28.

All units and other share equivalents are fully vested with the exception of the 13,500 restricted share equivalents (adjusted to reflect CIGNA's three-for-one stock split on June 4, 2007) granted pursuant to the Restricted Share Equivalent Plan described on page 27. In addition, the number of share equivalents resulting from voluntary deferrals of cash compensation invested into the CIGNA stock fund for Mr. Campbell equals 7,100; for Mr. Harris equals 2,974; for Mr. Larson equals 15,679; for Mr. Martinez equals 4,683; for Mr. Rogers equals 1,722; for Mr. Wagner equals 17,905; for Ms. Wait equals 2,229; and for Mr. Zollars equals 2,914.

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REPORT OF THE PEOPLE RESOURCES COMMITTEE

The People Resources Committee of the Board of Directors (PRC) reviewed and discussed with CIGNA's management the following Compensation Discussion and Analysis (CD&A). Based on this review and discussion, the PRC recommended to the Board of Directors that the CD&A be included in this proxy statement and be incorporated by reference in the Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission. The Board accepted the PRC's recommendation.

People Resources Committee:

Harold A. Wagner, Chairman
Isaiah Harris, Jr.
James E. Rogers
Carol Cox Wait
William D. Zollars

COMPENSATION DISCUSSION & ANALYSIS

Overview

CIGNA Corporation and its subsidiaries constitute one of the largest investor-owned health service organizations in the United States. CIGNA's subsidiaries are major providers of health care and related benefits, the majority of which are offered through the workplace, including health care products and services such as: medical coverage, pharmacy, behavioral health, dental benefits and disease management, group disability, life and accident insurance, and workers' compensation case management and related services. In addition, CIGNA has an international operation that offers life, accident and supplemental health insurance products and international health care products and services to businesses and individuals in selected markets.

CIGNA operates in a very competitive market for executive talent with the skill and experience to run its business. Accordingly, to effectively compete in this environment and to drive results and growth in CIGNA's business, CIGNA's executive compensation program is designed to:

•

reward the creation of long term value for CIGNA shareholders and align the interests of the Company's executives with those of its shareholders;



•

be dynamic and ensure effective implementation of the Company's business strategy as well as to drive performance through a strong emphasis on variable performance-based short term and long term compensation;



•

motivate the executives to deliver superior results;



•

attract highly skilled executives to join CIGNA by offering competitive compensation; and



•

reward the achievement of favorable long-term financial results more heavily than the achievement of short term results in order to retain talented and skilled executives and promote the Company's long term financial health and growth.

The CD&A describes CIGNA's executive compensation policies, programs and practices, which are designed to achieve these objectives.

Executive Summary

CIGNA's executive compensation program consists of three primary elements: base salary; annual incentives (bonus); and long-term incentives, each of which is described in the following summary, in addition to a package of competitive benefits, including health care, pension, and deferred

33

compensation, and other benefits, which are described on pages 50 and 51 of this CD&A. For named executive officers and other eligible CIGNA employees, two steps are used to determine base salary, annual incentives and long-term incentives.

•

First, CIGNA determines the total compensation target, for each executive role. CIGNA sets separate targets for each of the three compensation elements, and the separate targets are added to produce a total compensation target.


Targets are based on an assessment of relevant market data as described under Relevant Market Data on page 38. CIGNA generally uses the 50^th percentile of the relevant market data as a guide to determine the compensation targets. For annual and long-term incentives, the targets reflect the awards if the executive achieves the target levels of performance. If an employee changes roles or responsibilities during the year, adjustments to base salary, annual incentive targets and long-term incentive targets may be made at that time.

•

Second, CIGNA makes actual compensation decisions concerning base salary and annual and long term incentives; these decisions are based upon organizational and individual performance and result in compensation that is below, at, or above target. Individual performance is measured by the officer's accomplishments and contributions towards the results of the organization during the year and the demonstration of the skills and behaviors required for the role, which are intended to support the Company's overall business strategy. For the named executive officers, the Chief Executive Officer and the PRC (and for the Chief Executive Officer, the Board of Directors) annually review the total compensation targets, the relevant market data and organizational and individual performance to make compensation determinations.

Below is an overview of each of the three primary compensation elements:

Base Salary

Base salary is the fixed portion of the total compensation package. Base salary levels are set based on both: (1) a competitive range of the relevant market data; and (2) individual performance. The competitive range for the relevant market data is recommended by the PRC's external compensation consultant, Mercer (the Compensation Consultant), and is defined as within 15% of the 50^th percentile. Individual performance is measured by the accomplishments and contributions towards the results of the organization during the year, the individual's skill proficiency for the role and the individual's demonstrated leadership behaviors. All employees, including the named executive officers, are assessed annually and may receive merit increases to their salaries based on updated relevant market data and individual performance assessments. Merit increases, which are increases to base salary based on performance and position to the relevant market data, are effective on the same date for all employees.

Annual Incentives

Annual incentives are administered under two separate plans: the Executive Incentive Plan (EIP) and the Management Incentive Plan (MIP). Annual incentives are considered variable compensation and are used to recognize executive officers including named executive officers for achievement of annual organizational and business unit results, and for individual performance accomplishments and contributions. The targets for the awards made under the EIP and the MIP are determined annually after considering the relevant market data for the executive's role.

CIGNA's intent is that EIP payouts qualify for treatment as performance-based compensation and remain fully tax deductible where possible. Section 162(m) of the Internal Revenue Code imposes a $1 million annual limit on a company's federal income tax deduction for compensation paid to the Chief Executive Officer and the next four highest paid executive officers who are included in the

34

Summary Compensation Table in the Company's proxy statement, excluding the Chief Financial Officer. This limitation, however, does not apply to qualified "performance-based compensation."

Under the EIP, the PRC establishes objective corporate performance measures and goals in the beginning of the year. If the PRC determines at year-end that these performance goals are achieved, each named executive officer is eligible to receive the maximum award under the EIP for the performance year, which is $3 million and 225,000 shares of CIGNA stock (after adjustment for the 3-for-1 stock split effective June 4, 2007). The PRC, typically applies its discretion to reduce (but not increase) the size of awards below the maximum. The PRC determines the award amount by reviewing the individual's annual incentive target and applying the MIP assessment process described below and on pages 43 through 46.

CIGNA determines the eligibility for the MIP based on role and relevant market data. The MIP governs the awards for these eligible employees based on achievement of corporate goals, business unit performance and individual contributions. The PRC annually approves: (1) organizational performance measures and goals for annual incentive awards; and (2) funding levels for actual awards under the MIP. The performance measures and goals approved for 2007 are described on page 44.

Subject to plan limits described above, the actual award for an eligible employee can range from 0-200% of the executive officer's target and is paid in the first quarter following the end of the performance year. The percentage of target awarded to an individual is based on organizational, business unit and individual performance contributions.

Long Term Incentives

CIGNA's long term incentive (LTI) program is designed to: (1) motivate and reward executive behaviors and activities that lead to CIGNA's long term growth and profitability; (2) align the interest of executives with shareholders through equity compensation tied to CIGNA stock price performance; (3) align to CIGNA's rewards for performance strategy and (4) attract and retain key executives critical to CIGNA's business success by providing competitive LTI opportunity with vesting over multiple years. CIGNA believes that named executive officers should have the predominant portion of their compensation opportunity tied to the long term success of the Company.

Long term incentives are administered under the CIGNA Long-Term Incentive Plan. The target for awards is determined based on the relevant market data for the executive's role. In February 2007, the named executive officers received both stock options and strategic performance units (SPUs) as their annual long term incentive awards. In addition, Mr. Murabito received a restricted stock grant in September 2007 as described under Retention Actions on page 48. The long term incentive target is expressed as a dollar value and a named executive officer can receive between 0 and 200% of target based on organizational and individual performance. After the target percentage is determined for a named executive officer's award, the award is delivered in stock options and SPUs.

CIGNA awards stock options under the Long-Term Incentive Plan in order to:

•

strengthen the alignment between named executive officers and CIGNA shareholders by providing value to the executive only if CIGNA stock price increases (CIGNA's ultimate objective is to increase shareholder value, and stock options are the primary vehicle for ensuring that CIGNA's top executives are aligned with that goal);



•

reinforce long term shareholder value creation by providing a 10-year stock option life; and



•

provide retention incentive to named executive officers (options gradually become exercisable over a three-year period, so an executive cannot generally exercise all the options unless he or she has remained in continuous employment with the Company for at least three years).

35

CIGNA's SPU program, administered under the Long-Term Incentive Plan, is designed to promote profitable growth and to reinforce CIGNA's objective of having its shareholder return outperform that of its peers. SPUs are performance awards denominated in units that can be paid in cash or shares of CIGNA common stock. SPU value is based on CIGNA's performance over a three year period measured against pre-established criteria including performance versus CIGNA's competitors. The SPU program is intended to:

•

align superior results through sustained superior financial performance and strategic accomplishments over a three-year timeframe with above-market rewards;



•

reinforce the link between pay and performance both at the time of award and payout. The target value of $75 per SPU is payable if target objectives are achieved. The value may increase to as much as $200 per unit for superior performance results and decrease to as low as $0 for below threshold results;



•

give the PRC the flexibility to evaluate the Company's performance overall. Starting with awards of SPUs made in 2005, if CIGNA attains pre-established performance goals based on a defined set of measures, the PRC has the flexibility to reduce the formula driven SPU value; and



•

encourage executive ownership of CIGNA stock. SPU payouts may be made in shares of CIGNA stock instead of cash to those executives who have not yet reached their required stock ownership under CIGNA's executive ownership guidelines described on pages 48 and 49.

The SPU award years which include 2007 in the performance periods are listed below and descriptions of how SPU payments are calculated appear in the narratives to the Summary Compensation and Grants of Plan-Based Awards Tables beginning on pages 56 and 59, respectively.

The following chart sets forth the target pay mix of compensation elements in 2007 for each of the named executive officers:

36

Consistent with the Company's compensation philosophy, most of the compensation paid to CIGNA's executive officers is not fixed, but rather is at risk based on performance, results achieved and the exercise of discretion (by the Chief Executive Officer and the PRC for direct reports to the Chief Executive Officer, and by the Board for the Chief Executive Officer) in determining final award amounts.

Total target compensation for Mr. Hanway is approximately 3.2 times that of the executive officer with the next highest total target compensation, reflecting the breadth of responsibility his position carries. Mr. Hanway's total compensation is within the competitive range of the relevant market data.

Oversight of the Executive Compensation Program

PRC Role

The PRC, composed entirely of independent directors, administers CIGNA's compensation program for the Company's executive officers, including the named executive officers. As directed by the PRC's charter, the PRC oversees CIGNA's compensation and benefit plans and policies, administers its stock plans (including reviewing and approving equity awards to the named executive officers) and reviews and approves all compensation decisions relating to executive officers, including the named executive officers. The PRC reports to the Board on all actions taken.

In December 2006 the PRC reviewed and approved changes to the compensation target levels and in February 2007 approved compensation awards to the named executive officers. Also in February 2007 the PRC certified the achievement of performance goals after the end of the applicable performance period. The PRC reviewed the total target compensation for the EVP, Human Resources and Services in September 2007 in light of the availability of updated proxy information for the secondary peer group for this role, and at that time, approved increases to base salary, annual incentive target and long term incentive target for the role. In December 2007, the PRC reviewed the total compensation targets for the named executive officers, including the Chief Executive Officer, relative to the relevant market data and determined that no annual incentive or long term incentive target changes were warranted, and reviewed the performance measures and goals for the MIP and SPU programs and made changes discussed on page 46.

Management Role

The PRC has approved processes to support the independent development and review of executive officer compensation as described below.

Chief Executive Officer Compensation.    The PRC annually evaluates the Chief Executive Officer's performance and CIGNA's established organizational goals in a PRC session that is attended by the Executive Vice President, Human Resources and Services and, at the PRC's request, the Compensation Consultant. The Chief Executive Officer is not present at this session and does not review the related materials distributed to the PRC in advance of that meeting. Based on its review of the Chief Executive Officer's performance, the PRC makes recommendations to the independent members of the Board of Directors regarding the Chief Executive Officer's compensation. The results of the evaluation are shared with the Chief Executive Officer by the Chair of the PRC after the compensation determinations are approved by the PRC and the independent members of the Board of Directors.

Other Named Executive Officer Compensation.    The PRC, following review and discussion, approves the other named executive officers' compensation targets, base salaries, annual incentives and long-term incentives and similar arrangements. In order to determine target compensation for the named executive officers, the Executive Vice President, Human Resources and Services presents to the PRC relevant market data (excluding data for his own role which is presented by the Compensation Consultant), prepared by CIGNA's compensation department and the Compensation Consultant. This

37

relevant market data relates to base salary, annual incentive, long term incentive compensation and retirement programs relative to CIGNA's competitive peer group and the broader industry (see page 39 for a discussion of the peer group). The Executive Vice President, Human Resources and Services also presents any recommendations for changes to named executive officers' target compensation (excluding his own) for the PRC's consideration and approval. For actual compensation decisions regarding the named executive officers, CIGNA's Chief Executive Officer presents his recommendations to the PRC for their consideration and, in making his recommendation, discusses CIGNA's performance and the individual officers' performance. The Executive Vice President, Human Resources and Services is generally invited to be present for the discussion of compensation for named executive officers other than himself.

Compensation Consultant Role

The PRC has the authority under its charter to engage the services of outside advisors for assistance. The PRC directly retains Mercer as its Compensation Consultant to advise the PRC on CIGNA's executive compensation programs. The primary role of the Compensation Consultant is to provide the PRC with objective analysis, advice and information and to assist the PRC in the performance of its duties. At the request of the PRC, one or more representatives of the Compensation Consultant attended all of the PRC meetings in 2007.

The PRC requests information and recommendations from the Compensation Consultant as it deems appropriate in order to structure and evaluate CIGNA's compensation programs, practices and plans. In addition to its advice with respect to particular compensation actions discussed throughout this CD&A, during 2007, the Compensation Consultant performed the following additional duties:

•

evaluated the impact of CIGNA's equity programs on annual share use, burn rate (the number of shares awarded per year divided by the shares outstanding at the beginning of the year) and total dilution (total number of stock options and restricted stock outstanding, plus the shares available for grants under the Long-Term Incentive Plan, divided by the total number of shares of common stock outstanding), and advised the PRC on a recommended maximum share limit for use in 2008;



•

reviewed tally sheets of total compensation developed by CIGNA's internal compensation department, which are described on page 42; and



•

assisted with the preparation of the CD&A for the 2007 proxy statement.

The Compensation Consultant works with the Executive Vice President, Human Resources and Services and CIGNA's compensation department to obtain the information necessary to carry out its assignments from the PRC.

Executive Compensation Policies and Practices

Relevant Market Data

The PRC establishes target and actual compensation levels for the named executive officers based on a variety of factors including the practices of organizations in the market in which CIGNA competes for talent.

38

Generally, the companies that CIGNA considers its competitive peer group are a limited group of publicly-traded managed care companies with which CIGNA competes most directly. Those companies are:

•

Aetna,



•

HealthNet,



•

Humana,



•

WellPoint,



•

UnitedHealth Group, and



•

Coventry Health Care (which was added to the primary peer group in October 2007 based on the analysis completed by the Compensation Consultant as part of the PRC's review of the peer group).

The primary peer group is considered reflective of the organizations with which CIGNA competes for capital, customers and labor. The selection process for CIGNA's primary peers involved a review of: (1) companies in the Health Care Provider and Services and Insurance GICS industry group with similar operating models that had revenue levels from one third to three times that of CIGNA; (2) an analysis of total shareholder return (TSR) movement that signifies that investors view the proposed peer companies as similar from an investment and capital markets perspective; and (3) a final review of similarity of markets.

Publicly available proxy statement and other information disclosed in filings with the Securities and Exchange Commission (SEC), such as 8-K filings pertaining to these companies' compensation practices, are used for benchmarking compensation levels, evaluating pay practices and assessing the alignment of pay and performance for the named executive officers. In cases where the critical skills and abilities CIGNA requires for executive talent is either unique to another industry or applicable on a broader all-industry basis, unique reference groups, rather than the competitive peer group, are used as an additional secondary reference point for compensation target recommendations.

To determine executive officer compensation targets, CIGNA reviews relevant market data. Where there is a lack of publicly available information for an executive role, CIGNA uses published survey data issued by leading compensation consulting firms and collected from among companies in the health care and group insurance businesses, as well as companies with similar revenue size. The Compensation Consultant generally assists the PRC by compiling and analyzing publicly available information and published survey data for the Chief Executive Officer role and by reviewing CIGNA's compensation department's compilation of survey data for other named executive officers.

The primary market reference used by the PRC in determining compensation for each of the named executive officers is set forth below:

⁽¹⁾

Given Mr. Cordani's role in the organization and the lack of a sufficient number of functional role matches within the proxy data, the Compensation Consultant advised that a functional role match from survey data is less relevant than an average of the 2^nd and 3^rd named executive officers in the proxy statements of CIGNA's primary peers.

⁽²⁾

For Mr. Murabito, the PRC also uses a proxy data set of Human Resources executives named in the proxy statements of S&P 500 companies with revenue between $8.5 and $35 billion.

39

CIGNA used multiple surveys and benchmarks within the surveys in the development of the Survey Data that is used as the primary market reference as described in the table on page 39. Below is additional detail on those surveys. The benchmarks are selected based on similarity to the responsibilities inherent in the roles.

Head of Human Resources and Top Administration Executive:

40

General Counsel:

41

Factors Considered in Determining Target Compensation and Target Pay Mix

CIGNA's executive compensation programs are designed to: (1) place greater emphasis on at risk compensation rather than fixed compensation, and (2) with respect to the different types of compensation at risk, place more weight on long term incentives than annual incentives. Base salary is considered fixed compensation and is described in the Executive Summary on page 34 and under Base Salary on page 43. Annual incentives and long term incentives are considered at risk compensation, because the actual annual incentive award, stock option value or SPU payout is not known until the end of a year, at the time of exercise, or the end of the performance period and could vary depending upon a number of factors including organizational and individual performance. These incentives are described in the Executive Summary on pages 34 and 35, under Management Incentive Plan on pages 43 through 46, and under Long Term Incentives on page 47.

The PRC approves targets for base salary, annual incentives and long term incentives annually. Based on the relevant market data included in the report prepared by the Compensation Consultant for the PRC's December 2007 meeting, the target total compensation for each of the named executive officers is generally within a competitive range of the 50^th percentile of the primary market reference, with the exception of Ms. Petren and Mr. Murabito. For Mr. Murabito the target total compensation is between a competitive range of the 75^th percentile of the primary and the 50^th percentile of the secondary market reference because of the critical nature Mr. Murabito's role plays in the organization. The secondary relevant market reference used to determine the target pay positioning for Mr. Murabito includes proxy data from executives in S&P 500 companies with revenue between $8.5 and $35 billion. For Ms. Petren, the target total compensation is above the 50^th percentile of the primary market reference (but below the 75^th percentile of the primary market reference) because of the intense competition for attracting and hiring executives with the necessary skills, talent, and leadership for this role. For each of the named executive officers, there may be variation in the target pay mix, such that target amounts for individual compensation elements may be above or below the competitive range of the 50^th percentile for the individual element.

Tally Sheets

The PRC monitors the total level of compensation paid, or expected to be paid, to the Company's named executive officers through the review of tally sheets. Tally sheets summarize current actual and target compensation, equity and SPU holdings, retirement and deferred compensation values, and potential payouts upon termination of employment for named executive officers. The Company prepares tally sheets for all of its executive officers for review by the PRC twice a year, when targets are being reviewed and prior to annual compensation award decisions, to ensure that executive compensation is appropriate in the context of CIGNA's compensation philosophy and performance.

When making decisions about each component of compensation, the PRC considers the aggregate sum of base salary, annual incentives and grant-date value of long term incentives to ensure that total compensation is appropriate. The PRC does not generally consider prior awards in determining a subsequent performance period's awards. For example, the number of stock options or SPUs previously awarded does not necessarily affect new awards, which are made annually. Further, prior awards are not considered when determining actual awards tied to performance under the MIP (described on pages 43 through 46) or SPU program (described on page 47). One situation in which prior awards are considered in determining pay levels, however, is when CIGNA identifies the potential risk of recruitment of its executives by competitors (see Retention Actions on page 48). In that case, CIGNA considers outstanding unvested awards to determine existing retention incentive values. The PRC may also consider prior awards when it determines the type of long-term incentive to award.

42

Elements of Compensation

Base Salary

Base salary levels are reviewed annually and may be adjusted based on relevant market data and an assessment of the executive's skills, role and performance contributions, including the demonstration of CIGNA leadership behaviors and core values. In 2007, a portion of base salary paid to Mr. Hanway was required to be deferred by the PRC. See the description of the Nonqualified Deferred Compensation Plan on page 50 and the narrative to the Nonqualified Deferred Compensation Table on page 67.

The following base salary adjustments were made in 2007.

⁽¹⁾

Mr. Hanway's base salary remained the same because his current base salary was competitive with the relevant market data.

⁽²⁾

Mr. Murabito received a merit adjustment in April 2007 during the annual review process, resulting in a new base salary of $550,000. He then received an increase in September 2007 in light of the review of additional proxy information for the secondary market reference and to provide appropriate retention incentive due to the critical nature of his role.

The base salary amounts for each of the named executive officers reflected in the table above are within a competitive range of the primary market reference, with the exception of Mr. Murabito who is above the 50^th percentile, but competitive with the 75^th percentile of the primary market reference. Decisions regarding each named executive officer's actual base salary are made by referring to both relevant market data and the officer's individual performance, which is measured by the officer's accomplishments and contributions during the previous year, and the individual's skill proficiency for the role and the individual's demonstrated leadership behaviors.

Management Incentive Plan (MIP)

Performance Measures, Goals and Funding.    Each year, the PRC sets organizational performance measures and goals for annual incentive awards based on CIGNA's business priorities. For each measure, goals are set, meaning a target level of performance is identified. The goals may identify threshold (minimum), target, above target and superior levels of performance. The actual organizational performance serves as the basis for establishing the range of funding available for awards, but the PRC exercises judgment to determine at which point within the range actual funding will be set. The PRC uses discretion within pre-established funding ranges to determine aggregate MIP funding. In exercising its judgment to set funding levels, the PRC considers CIGNA's performance as a whole (both in absolute terms and relative to competitors) as well as CIGNA's achievement of the goals within each performance measure.

In addition, a specified threshold level of Adjusted Net Income from Continuing Operations must be met for overall funding for MIP awards. The purpose of the threshold is to reinforce the fundamental importance of achieving CIGNA's profitability goals. If the Adjusted Net Income threshold is met, the MIP allows for payment of an incentive award even when overall results may be below target. CIGNA believes it is important to maintain this flexibility to retain key talent over the long term and encourage management to make decisions that could yield lesser results in the short term, but are in the best interests of our shareholders over the long term. If the threshold level is not achieved, no annual incentive payouts will be made under the MIP to any employees, including the named executive

43

officers; however, there will be a Chairman's Fund in which approximately 10-15% of potential aggregate funding at target may be made available and may be used to reward and retain key talent. The Chief Executive Officer is not eligible for an award from this fund. During years in which CIGNA's performance is below target, the retention of key talent is even more critical. Therefore, The PRC retains the flexibility to pay some incentive awards in order to recognize and retain key talent over the long term.

For 2007, the PRC established the following organizational performance measures and performance levels, which were used to determine the range of potential aggregate funding for MIP awards.

The goals that the PRC sets for target levels are rigorous and challenging and at the time the PRC approved the performance goals under MIP for 2007, CIGNA believed that the performance goals were attainable, but not certain to be met. In setting the target performance levels within each performance measure, CIGNA considers the earnings estimates for the year, as publicly disclosed, as well as past performance of both CIGNA and our general industry. To aid the PRC in setting performance targets, the Compensation Consultant presents a comprehensive report annually to the PRC with compensation and performance information that includes historical performance information about CIGNA's primary peer group.

CIGNA's full year 2007 adjusted net income from continuing operations for the Company's three ongoing businesses was $1.101 billion, which was consistent with the full year 2007 estimate of $1.1 billion to $1.16 billion, as previously disclosed by CIGNA, and was within the target performance level established for the MIP.

Full-year 2007 organic membership growth was approximately 5% excluding the impact of the Sagamore acquisition. This result was also consistent with full year estimates, as previously disclosed by CIGNA, and was within the target performance level established for the MIP.

The reduction in Health Care core operating expense per member versus 2006 was also within the MIP target range, and the reduction in expense exceeded CIGNA's 2007 plan. CIGNA has also made strong progress in executing the Company's consumer engagement and health advocacy strategy as demonstrated by CIGNA's Consumer Driven Health Plan membership more than doubling in 2007.

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2007 target levels for each of the performance measures and respective goals were met, and the PRC approved funding within the target range for the enterprise. The CIGNA businesses were funded based on the enterprise results and their respective business results.

For the 2007 performance year, MIP target levels were set as follows for the following named executive officers.

⁽¹⁾

MIP targets remained the same for Messrs. Hanway, Bell and Cordani and for Ms. Petren because their current MIP targets were competitive with or exceeded the competitive range of the primary market reference.

⁽²⁾

Mr. Murabito received an adjustment to his MIP target in light of the review of additional proxy information for the secondary market reference and to provide appropriate retention incentive due to the critical nature of his role.

For the 2007 performance year, annual incentive awards were delivered for the named executive officers at a level of 97% to 139% of the target award value. All of the named executive officers' awards are aligned with achievement of annual organization and business unit results and individual performance contributions during 2007.

Mr. Hanway was paid at 97% of target as a reflection of CIGNA's 2007 performance versus target performance levels and his individual performance contributions. Overall, CIGNA's consolidated earnings increased approximately 7% relative to 2006 year-over-year growth in the three ongoing businesses, earnings per share increased 26% and CIGNA's total shareholder return was approximately 23%. Health Care membership grew approximately 5% on an organic basis and 8% including the Sagamore acquisition. CIGNA's 2007 results overall were strong, even as strategic investments were made in the businesses, and the competitive position of CIGNA's businesses was strengthened. Mr. Hanway made progress in pursuing expansion opportunities in the individual, small group and seniors segments; and entered an agreement to acquire Great-West's health care business. The acquisition of Great-West will add approximately 1.5 million medical members in the employer segments and an additional 660 thousand covered lives serviced through TPA arrangements. All of the named executive officers played a key role in the acquisition of Great-West and their individual performance reflected this achievement.

Each of the following named executive officers received awards that reflected the annual organization and business unit results, adjusted for the assessment of each officer's performance throughout 2007. Factors influencing individual award decisions are described below.

Mr. Cordani's MIP award was 139% of target. Mr. Cordani led the Health Care business unit in 2007. Mr. Cordani's contributions included increasing operating earnings (excluding prior year development) 9%, reflecting the impact of significant improvement in the guaranteed cost loss ratio, strong membership growth, increased specialty penetration and improved productivity. Membership increased approximately 5% on an organic basis (8% including the Sagamore acquisition), with strong growth in both regional and national segments.

Mr. Bell's MIP award was 119% of target. Mr. Bell made significant contributions to the achievement of each business units results and enterprise strategy development. Under Mr. Bell's direction, CIGNA obtained upgrades from Moody's and S&P; issued $500 million of debt on favorable terms and extended CIGNA's bank credit facility at reduced fees. In addition, CIGNA continued to strengthen controls and enterprise wide risk management, effectively managed risks associated with run off

45

operations, and had superior investment results within the CIGNA portfolio. Mr. Bell played a significant role in the Great-West negotiations.

Mr. Murabito's MIP award was 113% of target. Mr. Murabito led the advancement of execution against our people fundamentals, implementing a competency framework anchored within CIGNA's disciplined approach towards talent planning, including assessment, acquisition and development of talent which are feeders to succession planning and people review. All people strategies are focused on strengthening the performance of the enterprise through its people. Additionally, Mr. Murabito contributed towards reducing CIGNA operating expenses by deploying effective organizational development principles. Additionally, he contributed in the due diligence of Great-West to assess talent pipeline and business value proposition.

Ms. Petren's MIP award was 113% of target. Ms. Petren's legal and public policy department, under her leadership, articulated and shaped CIGNA's public policy and advocacy, provided significant support to business growth and strategic initiatives, effectively partnered with corporate functions to enhance the delivery of services, and strengthened enterprise compliance and corporate governance. Additionally, Ms. Petren led the litigation efforts on several important issues facing CIGNA with strong results. Ms. Petren's team also led the legal due diligence of Great-West and is managing the approval process through the Department of Justice.

Performance Measure Design Changes.    The Compensation Consultant provides an annual review and ongoing advice as needed on the design of CIGNA's annual and long term incentive programs and briefs the PRC on executive compensation trends among CIGNA's peers and broader industry. During the annual review process, the following changes were made to the 2007 annual incentive award program:

•

Increased the earnings-based threshold performance goal that is required to be met in order to fund the MIP.

In January 2008, the following changes were made to the 2008 annual incentive award program.

•

The 2008 strategic imperative performance measure was changed in order to align with CIGNA's strategic imperatives regarding success and progress toward integration of Great-West Health Care into CIGNA and progress in strengthening CIGNA's foundational service and technology structure



•

The Company increased the weight of the strategic imperative performance measure (Great-West Health Care integration and service and technology) from 10% to 20%;



•

The Company reduced the weight of the Adjusted Net Income performance measure from 50% to 40%.

See Management Incentive Plan and Performance Measures, Goals and Funding beginning on page 43.

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Long Term Incentives

LTI targets for 2007 awards for named executive officers were as shown below.

⁽¹⁾

LTI targets remained the same for Mr. Hanway and Ms. Petren because their current targets were competitive with or exceeded the relevant market levels.

⁽²⁾

LTI targets for Messrs. Bell and Cordani were increased in order to maintain competitive alignment with market levels.

⁽³⁾

In September 2007 Mr. Murabito's LTI target was increased for 2008 from $900,000 to $1,150,000 to ensure that his target is competitive with the relevant market references and to provide appropriate retention incentive due to the critical nature of his role.

In 2007, LTI awards were approved for the named executive officers at a level of 100% to 126% of the target award value. The awards were made at and above-target as a reflection of the strong performance year that CIGNA had in 2006, including stock price appreciation of approximately 18%, strong earnings growth and advancement of its consumerism strategy. Individual named executive officer performance, retention considerations and changes in roles or responsibilities also were considered in determining award levels.

In 2007, the LTI award for each named executive officer was awarded 50% through stock options and 50% through SPUs. A factor in determining the stock option award percentage, relative to the total LTI award, is that CIGNA manages to an annual share usage maximum. CIGNA limits the total number of shares used for equity awards in any year to all employees to no more than 2% of the number of shares of common stock outstanding.

The PRC made the 2007 annual long-term incentive awards, including stock options and SPUs, during the fourth week of February 2007, after CIGNA's annual earnings release and following the end of a quarterly blackout period.

The actual payout level for SPUs is determined by the PRC by considering an overall assessment of CIGNA performance against the pre-established goals during the three year performance period. The PRC also has discretion to reduce the payout due to any unusual factors impacting reported financial results. As with the MIP program, this approach allows the PRC to consider the totality of CIGNA performance in determining final awards, rather than using a purely mechanical formula. In 2007, the PRC elected to make SPU payouts in cash to all of the named executive officers, as all had met their stock ownership guidelines at the time of the awards.

SPU payouts for the 2005-2007 period are disclosed in column (g) of the Summary Compensation Table on page 54 and a summary of the SPU program appears in the Summary Compensation Table Narrative on page 56. Payouts for the 2006-2008 period will be made in 2009. Awards for the 2007-2009 period are listed in the Grants of Plan-Based Awards Table on page 58 and a summary of these SPU programs appears in the narrative to the Grants of Plan-Based Awards Table on page 59.

In order to promote comparability across a broad range of companies, the compensation data used in the market assessment for LTI awards is evaluated using standard assumptions. For instance, the methodology used in the market assessment assumes that all stock options are held for 6.5 years. This assumption is calculated using the Securities and Exchange Commission's safe harbor methodology and

47

a 3 year vesting period. When delivering actual CIGNA stock option awards, CIGNA uses a Black-Scholes value that assumes that all options are held full-term (10 years). This assumption is used in grant calibration and for internal communication of long term incentive values to all Long-Term Incentive Plan participants, including the named executive officers. When stock option awards are delivered, the stock option's exercise price is made equal to the award date fair market value of CIGNA stock, that is, the average of the high and low stock price on the date of award. This measure of fair market value is a long-standing CIGNA practice, and setting the stock option price no lower than the award date fair market value is required by the CIGNA Long-Term Incentive Plan.

CIGNA calculates the SPU portion of the LTI award by dividing the intended SPU dollar value by $75, the SPU target value.

Retention Actions

Although the PRC does not generally consider prior awards in determining a subsequent performance period's awards, it may consider outstanding unvested awards in order to determine existing retention incentive values when there is potential risk of recruitment of the Company's executives.

In 2007, the PRC awarded an "off-cycle" restricted stock grant to Mr. Murabito after reviewing his outstanding unvested awards and in light of his accomplishments, standing in the marketplace and CIGNA's desire to retain him (see the Summary Compensation Table on page 54). Consistent with the PRC's policy, the effective award date of the grant was the date on which the PRC approved the award because it was not during a blackout period. If approval had occurred during the blackout period, the award date would have been the first day of the open period following the PRC meeting.

In January 2008, the PRC awarded "off-cycle" grants of options to purchase 215,177 shares of CIGNA common stock each to Michael W. Bell, Executive Vice President and Chief Financial Officer, and David M. Cordani, President, CIGNA HealthCare. The PRC approved these awards based on the contributions of these officers and in order to reinforce their long term career potential at CIGNA. Because the awards were approved during a quarterly blackout period, the grant date for each stock option award was the first day following the end of the blackout period.

Executive Stock Ownership

CIGNA believes that executive stock ownership is critical to encourage strong alignment between management and shareholder interests. CIGNA has adopted policies that require named executive officers to have a meaningful economic stake in CIGNA as shareholders. CIGNA believes that requiring executives to be owner-managers encourages them to act in the best long-term interests of CIGNA shareholders.

In 2006, the Compensation Consultant compared CIGNA's stock ownership guidelines to those of its peers and the broader market and found that CIGNA's guidelines were aligned with market practices. The Compensation Consultant did not recommend any changes and the PRC concurred. Consistent with market practice, CIGNA's stock ownership guidelines have the following features:

•

The Chief Executive Officer is required to own stock valued at five times base salary and other named executive officers are required to own stock valued at three times base salary.



•

Wholly-owned shares, restricted stock, stock equivalents and shares owned through benefit plans (such as investments in the CIGNA Stock Fund of the CIGNA 401(k) Plan) are counted towards meeting guidelines. Unexercised stock options are not counted toward these guidelines.



•

If a named executive officer has not met stock ownership guideline targets, the PRC may require that the officer's SPU payouts be made in the form of shares of CIGNA common stock.

48

CIGNA evaluates situations in which executives are below their guidelines on a case-by-case basis rather than setting a formal deadline for executives to meet stock ownership guidelines. In general, however, CIGNA expects executives to accumulate required shares as quickly as practicable.

CIGNA has other practices in place to encourage a long-term ownership philosophy for executives including:

•

allowing executives to sell only shares that exceed ownership guidelines;



•

requiring Chief Executive Officer approval of all sales by executive officers; and



•

prohibiting the sale of more than 25% of the shares held above guidelines in any single open period.

In January 2007, the PRC approved an additional stock ownership practice that requires executive officers to retain, for at least one year, a minimum of 50% of the shares acquired upon exercise of any stock options and 50% of shares acquired upon vesting of restricted stock grants. This mandatory holding period is an additional measure to align executive officers' interests with those of CIGNA shareholders.

In addition, each of CIGNA's named executive officers is prohibited from engaging in a short sale of CIGNA stock to hedge the economic risk of owning CIGNA stock.

All of CIGNA's named executive officers are currently at or above stock ownership guidelines with the exception of Carol Ann Petren who joined CIGNA in May 2006. Guidelines for each of CIGNA's named executive officers are shown below.

Retirement and Deferred Compensation

Defined Benefit Pension Plans

CIGNA maintains the following defined benefit pension plans:

•

The CIGNA Pension Plan is a funded, tax-qualified plan for U.S. employees. (Before 2000 several CIGNA subsidiaries in the U.S. maintained separate pension plans. These plans have been merged into the CIGNA Pension Plan.)



•

The CIGNA Supplemental Pension Plan is an unfunded, nonqualified plan for U.S. employees. It provides benefits not payable under the qualified plan because of limits imposed by federal income tax laws. It is "unfunded" because there is no advance funding of benefits through a trust fund or other pool of assets. Benefits are paid when due out of the Company's general assets.

49

All of these pension plans are intended to:

•

attract and retain qualified employees; and



•

provide a total compensation package that is competitive with what CIGNA's peer group companies provide.

Additional information about pension benefits can be found in the Pension Benefits Table on page 64 and the Pension Benefits Table Narrative beginning on page 64.

Nonqualified Deferred Compensation Plan

CIGNA provides the named executive officers and certain other employees with the opportunity to defer base salary and annual incentive awards under the CIGNA Deferred Compensation Plan. The purpose of this plan is to provide eligible employees an opportunity to postpone both the receipt of compensation and the income tax on that compensation—typically until after termination of CIGNA employment. Participants elect when to receive a payout and can choose to receive the deferred compensation in a single lump sum or in annual installments. For amounts deferred before 2004, participants can request an accelerated payment of all or part of their account balance subject to a 10% penalty. Otherwise, early withdrawals are permitted only under financial hardship circumstances.

CIGNA credits deferred compensation with hypothetical investment earnings during the deferral period as follows:

•

Deferred cash compensation is credited with amounts that equal the gains (or losses) on the actual investment options available under the CIGNA 401(k) Plan. The 401(k) investment options include a default fixed income fund with an annual interest rate of 4.9% as of December 31, 2007, which is not considered an "above market" interest rate as that term is defined by the Securities and Exchange Commission. The fixed income fund is the only hypothetical investment option available to non-executive employees.



•

Deferred shares of CIGNA stock are credited with amounts equal to any dividends that are paid on actual shares of CIGNA stock. These hypothetical dividends are treated as deferred cash compensation.

In 2007 CIGNA also mandated deferral of certain compensation by the Chief Executive Officer because immediate payment of that compensation would not be deductible by CIGNA due to limits imposed by Section 162(m) of the Internal Revenue Code. Unless the executive makes an alternative election, CIGNA will credit mandatory deferrals with hypothetical interest equal to 120% of the Federal Long-Term rate. The executive may instead elect to have mandatory deferrals credited with hypothetical interest based on the returns of one or more of the hypothetical investment funds available for voluntary deferrals under the Deferred Compensation Plan. In 2008, the PRC will not mandate deferral of non-performance-based compensation paid to any named executive officer. In future years, the PRC will determine before the beginning of the calendar year whether to mandate deferral of some or all non-performance-based compensation based on an evaluation of the projected amount of non-deductible compensation and current Internal Revenue Code rules.

Additional information regarding deferred compensation can be found in the Nonqualified Deferred Compensation Table on page 67 and the Nonqualified Deferred Compensation Table Narrative on page 68.

Other Benefits and Perquisites

The named executive officers are eligible to receive all of the benefits offered to CIGNA employees generally, including medical benefits, other health and welfare benefits, participation in the 401(k) Plan

50

(including the Company's matching contribution), the defined benefit pension plan (as described) and other voluntary benefits.

Perquisites generally are not a major portion of CIGNA's total executive compensation. CIGNA provides the following benefits and perquisites to its executives, primarily to attract and retain key talent, but also to ensure the safety and security of its executive officers: the use of corporate aircraft; installation and maintenance of security alarm systems at executive officers' residences; the use of a company car and driver by the Chief Executive Officer and other CIGNA executive officers; payment of costs associated with an annual physical and related tests; membership in an international emergency medical, personal, travel and security assistance program; in-office meals at CIGNA's Philadelphia headquarters; relocation benefits, which are available on a broad basis to all employees; tax reimbursement for taxes associated with job-related relocation; financial planning, tax preparation, and legal services for executive level employees.

These perquisites and the associated value and methodology for valuation are described in the footnotes to the Summary Compensation Table on page 55.

Relocation

Ms. Petren was hired as the Executive Vice President, General Counsel and Public Affairs beginning May 15, 2006. As part of the negotiated recruitment of a critical executive, Ms. Petren received the following relocation benefits, the value of which are disclosed in the Summary Compensation Table on page 54:

•

closing costs for purchase of a new home in Philadelphia;



•

costs associated with house hunting;



•

temporary living costs;



•

transportation for trips to Virginia and cost of a final trip to Virginia; and



•

tax assistance.

Additional information about these benefits are included in footnote (6) to the Summary Compensation Table on page 55.

Employment Arrangements and Post-Termination Payments

Consistent with its compensation philosophy, CIGNA generally does not enter into employment contracts or other advance arrangements with its executive officers that provide for the payment of severance pay upon termination of employment (other than for severance in the event of a termination following a change of control). As a result, executive officers serve at the will of CIGNA and its Board of Directors and their entitlement to base salary, annual incentives and long term incentives ceases at termination.

CIGNA has also established policies related to the impact of various termination events on stock option and restricted stock awards. If a named executive officer terminates prior to vesting, option and restricted stock awards are generally forfeited subject to specific exceptions. These exceptions include termination of employment on account of death and disability. In these exceptional cases, awards vest as of the termination date to enable the executive or his or her estate to realize the equity value that existed at the time of the termination event. In the case of voluntary retirement, stock options vest at the date of retirement so that an employee's decision as to the appropriate date of retirement is not influenced by potential lost compensation. The intent of that arrangement is to avoid discouraging retirement when the executive has reached eligibility for early retirement. For restricted stock, the PRC has the discretion to vest unvested awards at retirement to allow a case by case examination.

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These policies are designed to enable CIGNA's Board of Directors to remove an executive officer prior to retirement whenever it is in the best interests of CIGNA and to give CIGNA full discretion to develop an appropriate severance package on a case-by-case basis. When an executive officer is removed from his or her position, the PRC exercises its business judgment in approving an appropriate severance arrangement for the individual in light of all relevant circumstances including, but not limited to, his or her term of employment, past accomplishments, reasons for termination, opportunity for future employment and total unvested compensation. Historically, the PRC has approved varying amounts of severance pay for executive officers.

CIGNA's change of control policies are established at a level that is market based and are intended to provide CIGNA's named executive officers with sufficient economic value in the event of termination so they are encouraged to continue to act in the best interest of shareholders in evaluating potential transactions. The components of the change of control payments are as follows:

•

Severance payments are made only upon a change of control of CIGNA followed by the termination of an executive officer under certain circumstances as described under Potential Payments upon Termination or Change of Control beginning on page 68.



•

For named executive officers, cash severance is a specified multiple of base salary plus a specified multiple of the higher of the most recent annual incentive paid or the target annual incentive.



•

Unvested stock options and restricted stock vest upon termination of employment following a change of control. If an executive is involuntarily terminated or resigns for good reason (such as reduction in compensation or responsibilities) after a change of control, the executive is able to realize the shareholder value to which he or she contributed while employed at CIGNA.



•

Unvested Strategic Performance Units are paid at the highest of: (1) unit target value; (2) value for any unit payments in the most recent 12 months; or (3) average of the values established by the PRC for the most recent two SPU payouts. The intent of this SPU payment formula is to provide executives with a reasonable estimate of the potential payouts under the SPU program and to avoid placing executives at a disadvantage as a result of a change of control.



•

Tax reimbursement for Internal Revenue Code Section 4999 (golden parachute excise) taxes are provided to allow CIGNA to be market competitive to attract and retain executive talent and to enable the executive to receive the intended economic value of the severance prior to the application of penalty taxes.

Other than after a change of control as outlined above, the PRC has discretion to determine whether to make any SPU payments to a terminated officer. The PRC addresses situations on a case-by-case basis given individual circumstances.

Disgorgement of Awards

As provided by its Board Practices, the Board of Directors has the authority to make retroactive adjustments to any cash incentive compensation paid to executive officers upon certain terms in the event of a restatement of financial results. The Board will, in all appropriate cases and to the full extent permitted by governing law, require reimbursement of any bonus or other cash incentive compensation awarded to an executive officer or effect the cancellation of unvested restricted or deferred stock awards previously granted to the executive officer if:

•

the amount of the bonus or incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement;



•

the executive engaged in intentional misconduct that caused or partially caused the need for the restatement; and



•

the amount of the bonus or incentive compensation that would have been awarded to the executive had the financial results been properly reported would have been lower than the amount actually awarded.

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In addition, pursuant to the terms and conditions of CIGNA's stock option and restricted stock awards, a restitution provision applies to any CIGNA employee, including any named executive officer, who:

•

is terminated by CIGNA due to misconduct;



•

engages in behavior that would be considered grounds for termination due to misconduct;



•

competes with CIGNA within one year following any voluntary termination;



•

solicits a CIGNA employee or customer within one year following any termination;



•

discloses CIGNA confidential information improperly; or



•

fails to assist CIGNA in the handling of investigations, litigation, or agency matters with respect to which the employee has relevant information.

If an executive engages in any of the above "restitution events," any option gains realized over the two years prior to the "restitution event" and the value of any restricted stock vesting over the year prior to the "restitution event" are required to be paid back to CIGNA. These provisions are designed to discourage executives from engaging in activities that can cause CIGNA competitive harm and to support retention.

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EXECUTIVE COMPENSATION

The following information describes how CIGNA compensates its Chief Executive Officer, Chief Financial Officer and those who at the end of 2007 were the three most highly compensated executive officers other than the Chief Executive Officer and Chief Financial Officer. Together these individuals are called the "named executive officers."

Summary Compensation Table

This table and the accompanying footnotes include information regarding 2006 and 2007 compensation for each of the named executive officers. Other tables in this proxy statement provide more detail about specific types of compensation.