Title Slide JUN 8 – 10, GROUP CAPTIVES

Group Captives Speakers: Carol Frey, Divisional VP, Great American Insurance Company Robert Bernatchez, Principal, Brisk Management Services LLC Scott Penwell, Partner, Rhoads and Sinon LLP Geoffrey Gardner, Senior Advisor, PRP Performa Ltd. Moderator: Dennis Silvia, President, Cedar Consulting LLC

Herding Cats Organizing a Group Captive program has been likened to “herding cats”. Multidiscipline discussion with a focus on: Vision, from an organizer’s perspective Practical considerations from a front company’s perspective Governance from a legal perspective Asset planning and management from an investment manager’s perspective

Customized program design –Reduce cost of risk for participants –Specialized claims handling –Bespoke Loss Control services Capital and Letters of Credit Plan to reach initial critical mass and maintain growth with best in class participants Organizer’s Vision

Transparency and fairness to participating members Balancing individual needs with what is in best interest of the group Long term flexibility to meet participant’s future needs Recouping start up costs Organizer’s Vision

Feasibility Analysis –Full submission including currently valued loss runs and exposure data with actuarial support –Coverage Templates –Member-to-Member Risk sharing plan –Reinsurance types and attachment points Commitment on the part of organizer and participants –Volume –Distribution –Patience Practical Considerations

Vendor Selection –Loss Control/Risk Management Services –Captive Management –Front Company –Reinsurer Tax status…To be or not to be 953(d) Practical Considerations

Owned Group Captive versus Segregated Account Structure –Capital vs. Collateral –Startup and Closing captive –Flexibility vs. Sponsor Control Tax Considerations Documents and Agreements Governance and Control

Controlling and Governance –Officers and Directors –Committees –Codes of Conduct –Independent Directors –Dividend Distributions Timing Mutual Agreement –Membership New members Members exiting Governance and Control

Selection and evaluation of investment management The asset allocation decision –Need for letters of credit linked to investment –Balance dynamic of maximized returns and liquidity/capital preservation Asset Planning and Management

Board of Directors evaluation of investment performance Advantages/Disadvantages of bundling asset management with custody and LOC services Asset Planning and Management

Q&A