1. GEM A Progress Report September 27, 2013

2. A Brief History Governmental Entities Mutual, Inc. (GEM) is a captive domiciled in Washington, DC Incorporated 12/24/2002 and licensed to write liability, workers compensation and property insurance and reinsurance GEM launched its liability reinsurance program on 1/1/2003, property and workers’ compensation programs followed in 2005 Converted to a Protected Cell Corporation as of 1/1/2010 GEM completed its tenth year of operations on 12/31/2012 17 member pools and 10 Member Board comprised of Designated Member Representatives from our member pools.

3. Financial Stability GEM is a regulated captive insurance company GEM is required to maintain adequate Risk-Based Capital (RBC) ratios GEM is member-owned and governed Members have access to GEM’s financial information on a monthly basis Annually GEM has an independent audit and actuarial loss reserve opinion Members make a long-term capital commitment to GEM Management provides an annual risk profile report to the Board of Directors All profits inure to the benefit of the Members

4. GEM Financial Performance

5. Members’ Equity

6. Return on Members’ Equity

7. The GEM/WSTIP Relationship  All Founding and Premier members are required to contribute a minimum of $500,000 or 70% of gross written premium as surplus to GEM. WSTIP has contributed capital of $750,000.  2013 Liability Reinsurance – WSTIP Retention: $ 1,000,000 per occurrence – Limit Retained by GEM: 83% Q.S. $3,000,000 x $1,000,000 – GEM Net Written Premium: $ 862,000  2012 Member Accounting – Member Surplus Accounts $ 1,182,501 – Member Policy Accounts $ 240,904

8. Expected Outcomes of WSTIP’s Investment  Maintenance of an economically sound company while providing long term cost-effective reinsurance and service  Member control of the Company through member elected Board  Follow form coverage eliminating differences in conditions, retention of claims handing authority at the pool level  High quality claims, underwriting and pool support services provided by staff and service providers with extensive pool & public entity experience  Stabilization or reduction of the overall cost of reinsurance in GEM’s retained layer through the law of large numbers and risk distribution  Building mutual strength of pools to retain higher limits before accessing the commercial reinsurance market

9. GEM Value Added Services Claims Audits Underwriting Reviews HR Sentry & John Salisbury Grants through NAGEP Building Mutual Strength Among Pools Governance – Summer 2007 Finance – Fall 2007 Member Services – Summer 2008 Coverage Documents – Summer 2009 Economic Outlook and Fixed Income Markets – Winter 2010,2011 & 2012 Risk Management – Summer 2011 Risk Management –Summer 2013

10. Future Directions for GEM Increase capacity to assume risk - $38-40 million member equity goal by 2020, net of unrealized capital gains. Net retention increases to $5 million Actively market GEM to attract new members including looking at expanding outside of the US Develop a generative Board process Actively seek ability to collaborate with NCL Mutual and CRL Integrate technology into how GEM delivers services to the membership Remember our roots

11. In Conclusion GEM – A Member Driven Reinsurer Building Mutual Strength