Samuel M. Garvin, Jr. Vice President and Chief Financial Officer

Year in Review and Current State of Company Sam Garvin – Financial Review Jill Dominguez – Underwriting / Reinsurance Ann Joslin – Claims Status & Procedures Robert Schmid – EIS Update Debbie Gaffney, Southern Co. – IAC Update

2008 FINANCIAL REVIEW

12/31/08 12/31/07CHANGE ASSETS Invested assets$ $1,245.5$ (246.8) Reinsurance recoverable Deferred Taxes Other (4.7) TOTAL$1,549.7 $1,717.0$ (167.3) LIABILITIES AND SURPLUS Loss reserves$964.1 $844.4$ Unearned premiums (2.2) Policyholder distribution payable (12.5) Payable for investments Deferred taxes (72.5) Other (1.5) Policyholders’ surplus (199.8) TOTAL$1,549.7 $1,717.0$ (167.3) (In Millions) SIMPLIFIED BALANCE SHEET

12/31/08 12/31/07CHANGE ASSETS Invested assets$ $1,245.5$ (246.8) Reinsurance recoverable Deferred Taxes Other (4.7) TOTAL$1,549.7 $1,717.0$ (167.3) LIABILITIES AND SURPLUS Loss reserves$964.1 $844.4$ Unearned premiums (2.2) Policyholder distribution payable (12.5) Payable for investments Deferred taxes (72.5) Other (1.5) Policyholders’ surplus (199.8) TOTAL$1,549.7 $1,717.0$ (167.3) (In Millions) SIMPLIFIED BALANCE SHEET 12/31/0812/31/07 CHANGE Invested assets$ 998.7$ 1,245.5$ (246.8) Payable for investments (4.7) (3.2) (1.5) TOTAL$ 994.0$1,242.3 $ (248.3)

FIXED INCOME MANAGERS  Pyramis Global Advisors  Morgan Stanley EQUITY MANAGERS  SSgA State Street Global Advisors INVESTMENT ADVISORS  Frank Russell Company INVESTMENT MANAGEMENT

FIXED INCOME MANAGERS  Pyramis Global Advisors  Morgan Stanley EQUITY MANAGERS  SSgA State Street Global Advisors INVESTMENT ADVISORS  Merrill Lynch INVESTMENT MANAGEMENT

12/31/08 12/31/07 PYRAMIS$ % $ % MORGAN STANLEY$ % $ % SSgA – US$ % $ % SSgA – NON US$ % $ % TOTAL WITH MANAGERS$ % $1, % CASH$ 36.0 $ 43.5 TOTAL$ $1,242.3 (In Millions) INVESTMENT MANAGERS ALLOCATION

ASSET ALLOCATION - DECEMBER 31, 2008 ASSET CLASSTARGETDRIFT RANGE U. S. EQUITY35% 30% - 45% NON-U. S. EQUITY15% 10% - 20% FIXED INCOME50% 40% - 55%

12/31/08 12/31/07CHANGE ASSETS Invested assets$ $1,245.5$ (246.8) Reinsurance recoverable Deferred Taxes Other (4.7) TOTAL$1,549.7 $1,717.0$ (167.3) LIABILITIES AND SURPLUS Loss reserves$964.1 $844.4$ Unearned premiums (2.2) Policyholder distribution payable (12.5) Payable for investments Deferred taxes (72.5) Other (1.5) Policyholders’ surplus (199.8) TOTAL$1,549.7 $1,717.0$ (167.3) (In Millions) SIMPLIFIED BALANCE SHEET 12/31/0812/31/07 CHANGE Loss reserves$ 964.1$ 844.4$ Reinsurance recoverable (448.8) (404.1) (44.7) TOTAL$ 515.3$ $ 75.0

12/31/08 12/31/07Change LOSS RESERVES $186.6 $147.3$ 39.3 IBNR LAE RESERVES TOTAL $515.3 $440.3$ 75.0 NET CLAIM RESERVES

12/31/08 12/31/07CHANGE ASSETS Invested assets$ $1,245.5$ (246.8) Reinsurance recoverable Deferred Taxes Other (4.7) TOTAL$1,549.7 $1,717.0$ (167.3) LIABILITIES AND SURPLUS Loss reserves$964.1 $844.4$ Unearned premiums (2.2) Policyholder distribution payable (12.5) Payable for investments Deferred taxes (72.5) Other (1.5) Policyholders’ surplus (199.8) TOTAL$1,549.7 $1,717.0$ (167.3) (In Millions) SIMPLIFIED BALANCE SHEET 12/31/0812/31/07 CHANGE Unearned premiums$ 100.2$ 102.4$ (2.2)

UNEARNED PREMIUM RESERVES 12/31/08 12/31/07Change GENERAL LIABILITY $ 50.8 $ 49.7$ 1.1 D&O / FIDUCIARY (2.7) PROPERTY (0.6) TOTAL $100.2 $102.4$ (2.2)

STATEMENT OF OPERATIONS Revenues (In Millions) Change Premiums Gross premiums written$179.6 $194.1$ (14.5) Reinsurance premium assumed (3.0) Decrease in unearned premiums (5.9) Reinsurance premiums ceded (82.4) (92.1) 9.7 Net premiums earned$101.8 $115.5$ (13.7) Other underwriting income (0.6) Investment income - net (4.3) Investment – OTTI Adjustment(40.2) (1.5)(38.7) Net loss on disposal of investments (0.4) (0.5) 0.1 TOTAL REVENUE $103.4 $160.6$ (57.2)

STATEMENT OF OPERATIONS Revenues (In Millions) Change Premiums Gross premiums written$179.6 $194.1$ (14.5) Reinsurance premium assumed (3.0) Decrease in unearned premiums (5.9) Reinsurance premiums ceded (82.4) (92.1) 9.7 Net premiums earned$101.8 $115.5$ (13.7) Other underwriting income (0.6) Investment income - net (4.3) Investment – OTTI Adjustment(40.2) (1.5)(38.7) Net loss on disposal of investments (0.4) (0.5) 0.1 TOTAL REVENUE $103.4 $160.6$ (57.2) CHANGE Net premiums earned$ 101.8$ 115.5$ (13.7)

NET PREMIUMS EARNED 12/31/08 12/31/07Change GENERAL LIABILITY $ 60.8 $ 60.1$ 0.7 D&O/FIDUCIARY (11.7) PROPERTY ASSUMED (3.0) TOTAL $101.8 $115.5$ (13.7) (In Millions)

Revenues (In Millions) Change Premiums Gross premiums written$179.6 $194.1$ (14.5) Reinsurance premium assumed (3.0) Decrease in unearned premiums (5.9) Reinsurance premiums ceded (82.4) (92.1) 9.7 Net premiums earned$101.8 $115.5$ (13.7) Other underwriting income (0.6) Investment income - net (4.3) Investment – OTTI Adjustment (40.2) (1.5)(38.7) Net loss on disposal of investments (0.4) (0.5) 0.1 TOTAL REVENUE $103.4 $160.6$ (57.2) CHANGE Investment income – net Investment – OTTI adjustment Net loss on disposal of investment TOTAL $ 40.1 (40.2) (0.4) $ (0.5) $ 44.4 (1.5) (0.5) $ 42.4 $ (4.3) (38.7) 0.1 $ (42.9) STATEMENT OF OPERATIONS

NET INVESTMENT INCOME (In Millions) 12/31/08 12/31/07Change INTEREST AND DIVIDENDS $ 40.1 $ 44.4$ (4.3) REALIZED (GAINS) LOSSES -EQUITIES -FIXED INCOME SUBTOTAL 0.2 (0.6) (0.4) 0.7 (1.2) (0.5) OTTI ADJUSTMENT -EQUITIES -FIXED INCOME SUBTOTAL ( 17.9) (22.3) (40.2) (1.3) (0.2) (1.5) (16.6) (22.1) (38.7) TOTAL $ (0.5) $ 42.4$ (42.9)

INVESTMENT PERFORMANCE EIM ANNUAL RETURN 2008(22.4)% % %2002(6.1)% %2001(1.1)% % % % %

TOTAL RETURN PERCENTAGES

TAX ADJUSTED PERFORMANCE VS. BENCHMARKS BY MANAGER ONE YEAR RETURNS PERFORMANCEBENCHMARK COMBINED FUND (22.4) (19.8) FIXED INCOME PYRAMIS 2.0 (0.9) MORGAN STANLEY (11.1) 4.9 EQUITY SSgA S&P 900 (36.5) (36.9) SSgA NON-US (42.8) (43.4)

7 Years2.5 % 5 Years1.5 % 3 Years(2.4)% LONG TERM INVESTMENT PERFORMANCE AS OF DECEMBER 31, 2008

Expenses (In Millions) Losses and loss adjustment expenses Change Gross losses and LAE incurred$255.3 $258.0$ 2.7 Assumed losses and LAE (0.5) Reinsurance recoveries (119.6) (133.9) (14.3) Net losses and LAE incurred$136.2 $124.1$(12.1) Other underwriting expenses Administrative expenses Total expenses$146.9 $135.9$(11.0) Policyholders’ distribution Income before income taxes$ (43.5) $ 12.2$(55.7) Income tax (20.7) (0.9) 19.8 NET INCOME$ (22.8) $ 13.1$(35.9) STATEMENT OF OPERATIONS

Expenses (In Millions) Losses and loss adjustment expenses Change Gross losses and LAE incurred$255.3 $258.0$ 2.7 Assumed losses and LAE (0.5) Reinsurance recoveries (119.6) (133.9) (14.3) Net losses and LAE incurred$136.2 $124.1$(12.1) Other underwriting expenses Administrative expenses Total expenses$146.9 $135.9$(11.0) Policyholders’ distribution Income before income taxes$ (43.5) $ 12.2$(55.7) Income tax (20.7) (0.9) 19.8 NET INCOME$ (22.8) $ 13.1$(35.9) STATEMENT OF OPERATIONS CHANGE Net losses and LAE incurred$ 136.2$ 124.1$ (12.1)

12/31/0812/31/07Change 2008 $ 86.2 $ 0.0 $ (86.2) (12.5)(3.4) (13.2) (3.0)(5.8)(2.8) (22.9) PRIOR(5.7)(12.4)(6.7) TAIL $ 136.2$ 124.1$ (12.1) (In Millions) NET LOSSES AND LAE

GrossNet %133.8% %120.4% LOSS RATIO

(In Millions) GrossNet Initial12/31/08ChangeInitial12/31/08Change 2008 $ $ 0.0$ 86.2 $ (67.8) (39.9) (120.0) (21.4) (41.1) (55.2) (191.1) (196.8) (5.9) All Coverages INCURRED LOSSES BY ACCIDENT YEAR

(In Millions) TotalCurrentPriorTail 2008$ 136.2$ 86.2$ 49.8$ (2.0) (12.1) (10.1) (53.5)(2.2) (56.3)(2.6) (18.0) (30.4) (5.0) (19.1) 1996(6.4)38.8(13.5)(31.7) All Coverages NET INCURRED LOSSES BY ACCIDENT YEAR

(In Millions) All Coverages

CURRENT YEAR NET INCURRED LOSSES (In Millions) All Coverages By Accident Year

NET LOSS PAYMENTS (In Millions) All Coverages

TOTAL CLAIMS PAID Claims Paid GENERAL LIABILITY$ 271,962,582 D&O / FIDUCIARY584,546,648 PROPERTY 83,532,292 REINSURANCE 51,733,316 $ 991,774,838

Gross IBNR $519.3 Million

CHANGE IN POLICYHOLDERS’ SURPLUS BEGINNING SURPLUS$667.1 Plus: Net loss$ (22.8) Unrealized loss of investments$(177.0) Change$(199.8) ENDING SURPLUS $467.3 (In Millions)

2009 A. M. BEST RATING ENERGY INSURANCE MUTUAL LIMITED BEST’S RATING: A (EXCELLENT) OUTLOOK: STABLE “The rating reflects the Company’s excellent capitalization, historically strong operating returns, and conservative leverage position.”

Jill Dominguez Vice President-Underwriting

WHAT’S GOING ON AT EIM? Update on 2008 Expectations for 2009 Reinsurance treaty update

NEW MEMBERS IN 2008 Central Arizona Water Conservation District Optim Energy LLC City Public Service of San Antonio, TX AES Corporation Enel North America, Inc. Vermont Electric Power Company

MEMBERSHIP GROWTH

MEMBER RETENTION RATE % % % % %

MEMBERSHIP MIX

2008 MEMBERSHIP One Acquisition by Non-EIM Member Three Non-Renewals 2 no longer needed limits 1 lost because of price/terms Four Member/Member Mergers ENDED 2008 WITH 173 MEMBERS

MEMBER LONGEVITY 87% of membership has been with EIM at least 5 years Years with EIMNumber of Members 20+ years30 Between 15 – 20 years41 Between 10 – 14 years41 Between 5 – 9 years38

GROSS WRITTEN PREMIUM 2008 VS $179.6M 2007 $194.1M

GENERAL LIABILITY $89.5M Gross Written Premium 162 EGL Policyholders $75.6M Average Limit $37.7M Average Attachment Point 48.5% of excess GL Policies Written for Maximum $100M Limit

GENERAL LIABILITY ENHANCEMENTS EPLI 55% Worker’s Compensation 22% Drop Down Joint Venture 45% Drop Down Over Specific Aggregates Professional Liability ($65M Sublimit) 71% 10%

BREAKDOWN OF UNDERLYING CARRIERS GL AEGIS – 95% AIG – 1%

$25M Wildfire aggregate each member California Wildfires

ASH PONDS AND STORAGE LANDFILLS Requirements to line? Inspections/maintenance How often? Outside third party used? Formed by products vs. natural materials? Locations Rural? “Downstream” exposure? Monitoring procedures i.e. Groundwater monitoring systems Capacity Is it at limit? Disposal only Potential to sell to others?

WHERE DOES THIS INFORMATION COME FROM? 10-K Environmental disclosures (not consistent though) Dam Inspection Reports EIA form 767 and subsequent forms (EIA 923 form) Presentations, include photographs

DIRECTORS AND OFFICERS LIABILITY $51.4M Gross Premium Written 88 EDO Policyholders $38M Average Limit $42.4M Average Attachment Point 45% of D&O policies written for maximum $50M Limit

BREAKDOWN OF UNDERLYING CARRIERS D&O AEGIS – 73% AIG – 11% Chubb – 2%

FIDUCIARY LIABILITY $5.85M Gross Written Premium 44 Policy Holders $22.4M Average Limit $38.4M Average Attachment Point 73% Buy Maximum Limits

PROPERTY Premium $5.9M EIM Only $21.5M NEIL Only Total policies written Primary layer – 45 Excess layer - 20

PROPERTY Capacity = $35,000,000 11% of members buy $30M or more

OVERALL VIEW Longterm view of market Will entertain Builder’s Risk Placements Not a primary market for programs that are predominantly catastrophe exposed Will continue to front for NEIL

REINSURANCE 2009

REINSURANCE RELATIONSHIPS ON CORE BUSINESS – GL AND D&O Various Lloyd’s Syndicates have reinsured EIM since December 1, NEIL first reinsured EIM on January 1, Basically the same group of reinsurers since January 1, Personal relationships are extremely important and proved invaluable at renewal.

Each Loss Deductible Aggregate RetentionParticipation $5,000,000$50,000,000 each loss and $75,000,000 in the aggregate 28.00% $5,000,000$60,000,000 each loss and $95,000,000 in the aggregate 57.00% $5,000,000$70,000,000 each loss and $115, in the aggregate 15.00% %

Each Loss Deductible Aggregate Retention Reinsurance Recovery 2008 Reinsurance Recovery 2009 Additional Retention First $100 million loss $ 5,000,000$58,700,000$ 45,000,000$ 36,300,000$ 8,700,000 Second $100 million loss $ 5,000,000$33,700,000$ 70,000,000$ 61,300,000$ 8,700,000 Third $100 million loss $ 5,000,0000$ 95,000,000 0 Total$15,000,000$92,400,000$210,000,000$192,600,000$17,400,000 GENERAL LIABILITY EXAMPLE

2009 REINSURANCE D&O LIABILITY RETENTIONS $5,000,000 Each And Every Loss $29, Each Loss And $58,000,000 In The Aggregate

2009 MAJOR CASUALTY REINSURERS Lloyd’s Led by Aspen Syndicate and Catlin Syndicate Nuclear Electric Insurance Limited Platinum Re Transatlantic Re Odyssey Re AWAC

2009 REINSURANCE PROPERTY Up to February 1, /50 quota share arrangement with endurance, Bermuda. From February 1, 2007 excess of loss arrangement with Lloyd’s, Odyssey Re Hannover Re and Neil. From February 1, 2008 excess of loss program with NEIL.

2008 RISK MANAGER SURVEY RESULTS EIM follows reasonable, prudent, and sound underwriting practices: 98% Agree/Strongly Agree

EIM provides added value in form of broad coverage, price stability, consistent limits, and financial strength: 2008 RISK MANAGER SURVEY RESULTS 99.25% Agree/Strongly Agree

Overall, EIM meets my expectations in level of service: 2008 RISK MANAGER SURVEY RESULTS 99% Agree/Strongly Agree

Ann Joslin Claims Manager

In an ideal world, claims do not approach EIM limits.

Unfortunately, that is not always the case.

CLAIMS OVERVIEW AND GENERAL ADMINISTRATIVE INFORMATION

CLAIMS NOTICE CATEGORIES CATEGORY ONE Highly improbable that it will impact EIM; requires only periodic review to ensure that it is not adversely developing. CATEGORY TWO Requires continuous monitoring and specific actions. CATEGORY THREE Meets the accepted requirements for setting specific loss reserves

OPEN CLAIMS CATEGORY 1 CATEGORY 2CATEGORY 3 GENERAL LIABILITY DIRECTORS & OFFICERS LIABILITY FIDUCIARY LIABILITY PROPERTY

CATEGORY 2 AND 3 GENERAL LIABILITY LOSSES Electric Contact 1 Fire 11 Gas Explosion 11 Flooding 3 Pollution 3 Land Claim 1 Steam Pipe Rupture 1 Transformer Explosion 1

REPORTING CLAIMS 1.Liability claims should be reported to Ann Joslin. Electronic reporting is acceptable. address is 2.Property claims should be reported to Ann Joslin, with a copy to Larry Baccari. for Larry is 3.Reporting via fax or regular mail is also available. 4.No special form is required.

CLAIM REPORTING REQUIREMENTS Always refer to your policy language for guidance Following is sample policy language for GL, D&O and Fiduciary EIM policies

EXCESS GENERAL LIABILITY (H) Notice of Claim As a condition precedent to any rights under this policy, the Insured shall give written notice of claim to the company of any claim against the Insured for an amount in excess of one-half of the amount listed as the attachment point in item 4 of the declarations. Such notice of claim shall be given as soon as practicable.

DIRECTORS AND OFFICERS (H) Notice of Claim As a condition precedent to any rights under this policy, the Directors, Officers and/or the Insured shall give a written notice of claim to the company of any claim which appears likely to exceed $1,000,000. Such notice of claim shall be given as soon as practicable.

EXCESS FIDUCIARY LIABILITY (I)Notice of Claim As a condition precedent to any rights under this policy, the insured Persons and/or the insured shall give written notice of claim to the company of any claim which appears likely to exceed $1,000,000. Such notice of claim shall be given as soon as practicable.

GENERAL PARTNERS LIABILITY (H) Notice of claim As a condition precedent to any rights under this policy, the General Partners and/or the Limited Partnership shall give a written notice of claim to the company of any claim which appears likely to exceed $1,000,000. Such notice of claim shall be given as soon as practicable.

PRACTICAL CLAIM REPORTING CONSIDERATIONS – GL There is generally no need to report minor incidents, especially those involving minor injuries, property damage, or as another example, discrimination alleged by one employee who is not highly compensated.

PRACTICAL CLAIMS REPORTING CONSIDERATIONS - GL As a practical matter, it is a good idea to report major catastrophic events, even though it is unclear whether exposure will reach one-half of underlying limits for a general liability situation.

PRACTICAL CLAIM REPORTING CONSIDERATION - GL Examples of types of claims to report include fires or explosions with multiple fatalities and/or serious injuries and/or extensive property damage. Ideally these incidents would be reported to EIM at the time of reporting to the underlying carrier.

PRACTICAL CLAIM REPORTING CONSIDERATIONS - GL If a claim is reported to EIM at a later time, at a point when a claim is made for one- half of the attachment point, there are certain issues that should be considered at the time of reporting, as they will bear on administrative and substantive handling.

EXAMPLE OF ADMINISTRATIVE ISSUES Explosion occurs on 2/10/08. Written notice of occurrence is sent to Underlying Carrier A on 2/12/08, even though no claims have been made against the insured as yet. A letter of representation dated 6/18/08 is the first claim made against the insured. On 8/30/08, a demand is made for settlement in the amount of $40 million. On 9/5/08, the insured sends a copy of the demand letter to EIM due to the amount claimed, and stating this is notice to EIM. The current policy period is 4/10/08-4/10/09. The prior policy period is 4/10/07-4/10/08.

EXAMPLE OF ADMINISTRATIVE ISSUES – GL – CONTINUED First, EIM needs to know the date the claim was first made against the insured to properly set up the claim administratively. So, a copy of the original letter of representation would be needed. Second, Underlying Carrier A will have the claim set up under the earlier policy year, due to the notice of occurrence being sent prior to the claim being first made. The claim will be set up under the later year at EIM, because notice to the Company (defined as EIM in the policy) was not given prior to the claim first being made against the insured, which happened in this example in the later policy year.

REPORTING A CLAIM AT A LATER DATE - GL We realize that there may be a variety of reasons you may not want to report a claim until it is clear that exposure will approach one-half of the attachment point. EIM will need to have certain information for both administrative (as in the prior example) and substantive reasons.

EXAMPLES OF ITEMS NEEDED IF REPORTING A CLAIM AT A LATER DATE - GL 1)The initial written notice of claim, be it a letter of representation, a lawsuit, or some other type of written demand. 2)Copies of past and current defense status reports, if applicable. 3)Factual investigation information. 4)Any evaluations of damages that have been completed. 5)Any amended complaints, pertinent motions, and orders issued, if the claim has been in litigation. 6)List is not meant to be exhaustive, but to give general guidance on items that should be sent to EIM with notice.

CLAIMS REPORTING – D&O, FIDUCIARY, GENERAL PARTNER These matters are generally reported immediately to EIM, and so we do not often run into the same issues as in a general liability claim that is reported after the claim has developed for a length of time. However, in the event a claim is reported later to EIM than to the underlying carrier, the same types of documents should be included with the notice as outlined in the GL presentation.

CLAIMS STATUS AND UPDATES Once a claim is reported, you should send periodic updates. If a claim is settled within underlying limits, please advise EIM so that we can close our claims file. If an incident was reported, but no claims were made as a result, please let us know so we can close our file.

CLAIMS STATUS AND UPDATES For claims that are Category 2 or Category 3, Baker & McKenzie works closely with EIM in monitoring developments. You will typically receive a letter asking that the monitoring attorney at the firm be copied on all status updates.

CLAIMS CLOSINGS After a claim is reported and there has been no further correspondence or update indicating exposure to EIM, you may receive a letter indicating EIM is closing its file. Immediately notify EIM if the claim has adversely developed such that the claim should be re- opened. Otherwise, the letter is for your information and records.

OTHER INFORMATION EIM does not have a claims staff other than me and Jane Murphy, who assists in claims administrative matters. All claims correspondence, including notices of new claims, should be directed to me. This presentation was designed to give a general overview and may not apply to all situations, since each claim is unique (especially when the EIM attachment point is involved). Please feel free to contact me if you have any questions about reporting, updates, or other claims matters. My number is

Thank you for your attention this morning and I hope you enjoy the remainder of this year’s meeting.

Robert P. Schmid Vice President and Chief Operating Officer - EIS

ENERGY INSURANCE SERVICES 2008

2008 REVIEW  OPERATIONS  FINANCIAL ENVIRONMENT IMPACT  TAX EXAMINATION

2008 REVIEW FINANCIAL HIGHLIGHTS Assets$ 1.6Billion$ 1.8Billion Wr. Premium65Million80Million Paid Losses78Million68Million Inv/Cash 550Million600Million MBP Equity53Million71Million

2008 REVIEW EIS OPERATIONS Accelerated Delivery of MBP Financial Reporting for Consolidation Purposes Improved Regulatory Review Cycle when SCDOI Approval Is Required Finalized and Populated Secured Web Portal for all Programs Established One New Program

FINANCIAL TREMORS Celebrated Wachovia Bank’s 130th Year of Existence Established Multiple Brokerage Accounts In Lieu of Bank Deposits Sought Safe Harbor in Direct Treasuries and MM Funds with Reduced Credit Risk Circled the Wagons - Wells Fargo to the Rescue

FINANCIAL TREMORS 2009 IMPLICATIONS Significantly Reduced Return on Assets Concerns Surrounding Reinsurers Stability Expanded Alternative Risk Activity as Market Conditions Harden

EIS IRS EXAM Concluded Field Exam Activities in Early Fall Received a Favorable Technical Analysis of One Cell from the IRS Chief Counsel in September Agents Issue Final Report in November Excludes Any Reference to Chief Counsel Advice Appealed the Field Agents Final Report in December

EIS IRS EXAM 2009 IMPLICATIONS Timing of Appeal Process is uncertain but likely a 2009 Event EIS Conformance with Revenue Ruling and Corresponding Analysis provided by IRS Chief Council’s Advice Memorandum Forms a Solid Basis for a Sustained Appeal

THE FUTURE OF EIS THE FRUITS OF REDOMESTICATION Removal of Reputational and Political Risk Inherent with an Offshore Address Achievement of Significant Operational Improvement Elimination or Major Reduction of Tax Uncertainty for Protected Cell Captives

EIS 2009 ANNUAL CONFERENCE October 19 th – 23 rd at the Westin Poinsett in Greenville, South Carolina

Debbie Gaffney Southern Company Insurance Advisory Committee Chairman Insurance Advisory Committee Chairman

IAC Deborah S. Gaffney, CPCU (Chairman) - Southern Company Randall L. Martin, CPCU (Vice Chairman)- American Electric Power John E. Luley - Pepco Holdings, Inc. Robert J. Semet, CPCU, ARM, Are - Exelon Corporation Mark E. Blair - Ameren Services Company Robert W. Dillard – Knight, Inc. Jack R. Hadsall, CPCU - City Utilities of Springfield, MO Sandra K. Hart - Northwest Natural Gas Company Julie R. Jackson, ARM, CPCU, CLU, FLMI, - Targa Resources, Inc. Gary Y. Little, ARM, CPCU - Progress Energy, Inc.

Task Force Carbon Sequestration Randy Martin (Chair), Jack Hadsall &John Luley Cyber Liability Julie Jackson (Chair), Bob Dillard, Gary Little, John Luley & Randy Martin Annual Survey Debbie Gaffney (Chair), Sandra Hart & Mark Blair Energy School Bob Dillard & Debbie Gaffney Terrorism John Luley (Chair) & Bob Semet,

The Energy School