HEALTH CARE PROVIDERS SELF-INSURANCE TRUST

HEALTH CARE PROVIDERS

SELF-INSURANCE TRUST

ACTUARIAL REPORTEstimated Required Reserves

as of 10/31/09

• • ••

August 16, 2010 Mr. Steven B. Gidwitz NCA Comp, Inc. 14 Lafayette Square, Suite 700 Buffalo, NY 14203 Dear Mr. Gidwitz: Enclosed are three bound copies of the actuarial report prepared for the Health Care Providers Self-Insurance Trust (HCP) at your request. This report estimates the required reserves as of 10/31/09 for reported and incurred but not reported claims retained during the 4/1/93 through 10/31/09 period. The estimates contained in this report are based on data provided by NCA Comp, Inc. These data and the associated assumptions should be reviewed for their consistency with the internal records of HCP. Any discrepancy in the completeness, interpretation, or accuracy of the information used may require a revision to this report. If you have any questions, please call or write. It is a pleasure to be of service to HCP and NCA Comp, Inc. Sincerely,

Mary Jean King, FCAS, FCA, MAAA Consulting Actuary

Lisa Dennison, FCAS, FCA, MAAA President and Consulting Actuary enclosure

HEALTH CARE PROVIDERS SELF-INSURANCE TRUST

ACTUARIAL REPORT

TABLE OF CONTENTS

PURPOSE ........................................................................................................................... 1

FINDINGS .......................................................................................................................... 2

ESTIMATED REQUIRED RESERVES ........................................................................ 2 COMPARISON TO PRIOR REPORT ........................................................................... 3

ASSUMPTIONS ................................................................................................................. 7

DEFINITIONS ................................................................................................................ 7 HISTORICAL INFORMATION .................................................................................... 7 RETENTIONS ................................................................................................................ 8

RESERVE ANALYSIS .................................................................................................... 10

OVERVIEW ................................................................................................................. 10 INCURRED LOSS DEVELOPMENT ......................................................................... 11 PAID LOSS DEVELOPMENT .................................................................................... 15 INCURRED BORNHUETTER-FERGUSON ............................................................. 15 PAID BORNHUETTER-FERGUSON ......................................................................... 21 SELECTED ESTIMATED ULTIMATE INCURRED LOSSES ................................. 21 ESTIMATED REQUIRED RESERVES ...................................................................... 26 ESTIMATED REQUIRED RESERVES PAYOUT ..................................................... 26

HISTORICAL PROFITABILITY ANALYSIS ............................................................... 31

QUALIFICATIONS AND LIMITATIONS ..................................................................... 37

CONSULTATION ............................................................................................................ 39

APPENDICES

INCURRED LOSSES $200,000 AND GREATER ......................................................... 40

SUPPORT EXHIBITS ...................................................................................................... 47

ESTIMATED SPLIT AND ULAE RESERVES .............................................................. 53

ESTIMATED REQUIRED RESERVES AS OF 10/31/09 - HIGH ................................. 55

COMPARISON TO PRIOR ACTUARIAL REPORTS .................................................. 63


ACTUARIAL REPORT

PURPOSE

By the Numbers Actuarial Consulting, Inc. (BYNAC) prepared this actuarial report to present a

professional analysis of the required reserves retained by the Health Care Providers Self-

Insurance Trust (HCP) as of 10/31/09 for claims incurred from 4/1/93 through 10/31/09. HCP

was established to provide workers compensation insurance to its members who are employers in

the health care industry in the State of New York. As of 6/30/09, HCP ceased providing

insurance. The fund is currently being administered by NCAComp, Inc (NCA).

The required reserves estimated in this report represent the unpaid claim estimate. The unpaid

claim estimate is an estimate of the obligation for future payment from claims due to past events.

The estimated required reserves are based on estimates of ultimate incurred losses. Ultimate

incurred losses are defined to be the amounts that will be paid to settle all claims occurring

during a policy period. These estimates include a provision for the subsequent development of

known claims and for claims incurred but not yet reported. Incurred but not reported (IBNR)

losses are defined throughout this report to include the additional development on known claims

in addition to claims incurred but not yet reported. The estimated required reserves at the

expected level represent the actuarial central estimate. The actuarial central estimate is an

expected value over the range of reasonably possible outcomes. The range around the actuarial

central estimate which reflects the low and high expected values is noted in the report.

1

FINDINGS

The findings are the product of loss experience, actuarial assumptions, quantitative analysis, and

professional judgment. The estimated required reserves are expressed in terms of ranges that

indicate the reliance on assumptions believed to be reasonable and are subject to all the

limitations expressed herein.

ESTIMATED REQUIRED RESERVES

The required reserves shown in the following table should be used for financial statement

reporting as of that date. However, until all the claims that occurred on or before 10/31/09 are

closed, the actual reserve need remains an estimate. While the experience of HCP indicates that

the required reserves will fall within the range established in this report, the possibility exists that

extraordinary or unexpected circumstances could cause the actual reserve need to be less than or

greater than the range. Therefore, the findings cannot be warranted or guaranteed.

ESTIMATED LOSS AND ALAE RESERVESINCLUDING IBNR FOR 4/1/93‐10/31/09 AS OF 10/31/09

(Limited to Specific and Aggregate Retentions)

Low Expected High

Undiscounted forInvestment Income $109,090,000 $119,130 ,000 $131,800,000

2

The range shown is judgmental and not intended to establish absolute minimums or maximums

on the estimates, but rather to depict a reasonable range for the establishment of loss reserves in

this particular situation. Figure 1 contains a graphical representation of HCP’s estimated

retained loss experience as of 10/31/09 including the undiscounted expected loss reserves.

COMPARISON TO PRIOR REPORT

The ultimate incurred losses estimated in this report are compared to the 10/31/08 SGRisk

actuarial report in the following table and Figure 2. As shown the estimates increased

$74,019,046 or 46.0% from 10/31/08 to 10/31/09. The increase is due to substantial changes in

the case reserves in the losses evaluated 5/31/10 that are the basis for this report. In addition, this

report contemplates that the losses excess the specific and aggregate retentions for 4/1/93

through 10/30/97 insured by Reliance will not be collectible.

3

COMPARISON OF ESTIMATED ULTIMATEINCURRED LOSSES TO PRIOR ACTUARIAL REPORT(Limited to Specific and Aggregate Retentions)

Current SGRiskReport Report

Policy (Section A Valued PercentPeriod of Table 9) 10/31/08 Change Change

4/1‐10/31/93 $ 1,876,190 $ 751,320 $ 1,124,870 149.7%11/1/93‐94 5,751,234 4,002,500 1,748,734 43.7%11/1/94‐95 7,718,763 6,315,957 1,402,806 22.2%11/1/95‐96 9,742,411 8,158,643 1,583,768 19.4%11/1/96‐97 15,063,784 9,765,974 5,297,810 54.2%11/1/97‐98 8,706,105 7,487,655 1,218,450 16.3%11/1/98‐99 10,266,146 9,407,043 859,103 9.1%11/1/99‐00 10,052,955 9,087,718 965,237 10.6%11/1/00‐01 12,994,469 11,452,437 1,542,032 13.5%11/1/01‐02 13,634,338 12,047,049 1,587,289 13.2%11/1/02‐03 15,408,239 13,636,104 1,772,135 13.0%11/1/03‐04 22,831,889 12,648,347 10,183,542 80.5%11/1/04‐05 26,333,330 13,848,669 12,484,661 90.2%11/1/05‐06 23,122,258 12,712,068 10,410,190 81.9%11/1/06‐07 25,253,581 15,212,081 10,041,500 66.0%11/1/07‐08 26,228,363 14,431,444 11,796,919 81.7%

Total $234,984,055 $160,965,009 $74,019,046 46.0%

4


WORKERS COMPENSATION

Figure 1

ESTIMATED RETAINED LOSSES AS OF 10/30/09

1 .9

5.8

7.7

9.7

15.1

8.7

10.3

10.1

1 3.0 1 3

.6

15.4

2 2.8

26.3

23.1

25.3 26

.2

1 9.1

4/1-10

/31/93

11/1/

93-94

11/1/

94-95

11/1/

95-96

11/1/

96-97

11/1/

97-98

11/1/

98-99

11/1/

99-00

11/1/

00-01

11/1/

01-02

11/1/

02-03

11/1/

03-04

11/1/

04-05

11/1/

05-06

11/1/

06-07

11/1/

07-08

11/1/

08-09

0.0

5.0

10.0

15.0

20.0

25.0

30.0$ Millions

Paid Losses Case Reserves Estimated IBNR

5



Figure 2

COMPARISON OF ESTIMATED ULTIMATE INCURRED LOSSES TO PRIOR REPORT(Limited to Specific and Aggregate Retentions)

1.9

5.8

7.7

9.7

15.1

8.7

1 0.3

10.1

13.0 13

.6

15.4

22.8

26.3

23.1

25. 3 26

.2

0.8

4 .0

6.3

8.2

9.8

7.5

9.4

9.1

11.5 12

.0

1 3.6

12.6 13

.8

12.7

15.2

14.4

4/1-10

/31/93

11/1/

93-94

11/1/

94-95

11/1/

95-96

11/1/

96-97

11/1/

97-98

11/1/

98-99

11/1/

99-00

11/1/

00-01

11/1/

01-02

11/1/

02-03

11/1/

03-04

11/1/

04-05

11/1/

05-06

11/1/

06-07

11/1/

07-08

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Current Paid Current Case Current IBNRPrior Paid Prior Case Prior IBNR

6

ASSUMPTIONS

DEFINITIONS

Losses in this report include ALAE. ALAE are those expenses that can be directly attributed to a

specific claim, such as litigation costs. Loss adjustment expenses that cannot be directly

associated with an individual claim are known as ULAE. Reserves for unearned premiums,

unpaid administrative expenses, contingencies, catastrophes, or future premium deficiencies are

not included in the estimates.

HISTORICAL INFORMATION

For the periods under review, HCP has assumed its members’ losses according to the New York

workers compensation statutes. HCP’s experience has been utilized in conjunction with industry

experience for New York published by the National Council on Compensation Insurance, Inc.

(NCCI) in the 2009 edition of the Annual Statistical Bulletin and the experience of other self-

insured groups in New York. This methodology assumes that the HCP and industry

development patterns are indicative of the future development expected for the periods

considered.

All data are based on information provided by NCA. Gallagher Basset administered claims for

the Trust at inception. PRM claim services took over administration of both pending and newly

reported claims effective 10/31/98. NCA took over claims administration on 10/19/09.

The unpaid claim estimate as of 10/31/09 is based on data evaluated as of 10/31/09 and 5/31/10

and additional information provided through 7/30/10. Both loss evaluations were adjusted to

7

remove case reserves on 100% Section 15-8 claims using a list provided by NCA. These data

are reviewed for reasonableness and used without audit.

RETENTIONS

HCP’s specific and aggregate retentions are summarized in the following table. As of 5/31/10,

118 claims are reported in excess of the specific retention. However, 30 of those claims are

insured through Reliance which is now in liquidation. No recoveries are currently expected from

Reliance. As of 10/31/09, there was $1,887,542 incurred excess the specific retention on the

Reliance policies. In addition, an estimated ultimate incurred of $2,000,000 excess the aggregate

retention for 10/31/96-97 is also covered by Reliance. It is anticipated that the aggregate

retention insured through Safety National will ultimately be exceeded in five policy periods.

These aggregates have not been exceeded on an incurred or paid basis as of 10/31/09. The

aggregate retentions are exceeded on an incurred basis as of 5/31/10 for 10/31/98-99, 10/31/00-

01, 10/31/01-02, and 10/31/02-03.

8

SUMMARY OF RETENTIONS

Policy Specific Aggregate AggregatePeriod Retention Carrier Retention Limit

4/19/93‐94 $ 250,000 Reliance4/19/94‐10/31/95 250,000 Reliance

10/31/95‐96 250,000 Reliance $11,728,070 $2 ,000,00010/31/96‐97 250,000 Reliance 12,500,000 2 ,000,00010/31/97‐98 250,000 Safety National 10,362,633 2 ,000,00010/31/98‐99 250,000 Safety National 10,261,155 2 ,000,00010/31/99‐00 250,000 Safety National 10,055,395 Statutory 10/31/00‐01 250,000 Safety National 12,978,402 Statutory 10/31/01‐02 300,000 Safety National 13,653,582 5 ,000,00010/31/02‐03 400,000 Safety National 14,915,069 5 ,000,00010/31/03‐04 500,000 Safety National10/31/04‐05 600,000 Safety National10/31/05‐06 600,000 Safety National10/31/06‐07 600,000 Safety National10/31/07‐08 600,000 Safety National10/31/08‐09 600,000 Safety National

It is assumed that the excess insurance will be collectible on all claims that ultimately develop

beyond the retentions except as noted above. An analysis of the collectibility of the excess

insurance is beyond the scope of this report.

9

RESERVE ANALYSIS

OVERVIEW

To estimate the required reserves, it is first necessary to estimate the ultimate value of the prior

periods based on the current evaluation of loss after limiting the losses to the appropriate

retention. Required reserves are estimated as the difference between the ultimate incurred and

paid losses. The historical payment pattern is analyzed and quantified to determine a unique

payout schedule for HCP. This schedule is used to predict when the required reserves will be

paid.

Four procedures are used to estimate the ultimate incurred losses to provide a check for

reasonableness and consistency. Following is a brief description of each method and the

circumstances under which each works best.

Incurred loss development is the most widely used method of estimating ultimate incurred losses.

By using the reserves on a claim-by-claim basis, the most recent claims adjusters’ estimates are

included in the analysis in addition to the cumulative paid losses. Inherent in the incurred loss

development technique is the assumption that there are no changes in reserving practices.

A paid loss approach attempts to eliminate distortions that can occur in incurred methods when

there is a suspected change in reserving procedures. Inherent in paid loss development

techniques is the assumption that there are no changes in claims settlement practices.

10

The incurred Bornhuetter-Ferguson technique estimates ultimate incurred losses based on the

expected losses and reporting pattern of incurred losses. This method is dependent on the

accuracy of these two parameters in addition to the considerations discussed for the incurred

method.

The last method, the paid Bornhuetter-Ferguson approach, estimates ultimate incurred losses

based on the expected losses and payment pattern. Similar to the incurred Bornhuetter-Ferguson

method, this approach is dependent on the accuracy of these two parameters in addition to the

considerations for the paid method.

INCURRED LOSS DEVELOPMENT

The ultimate cost of claims incurred for a specific time period is usually not known until several

years after the close of that period. Loss development factors project the additional cost

expected on claims. These factors quantify the late developing aspects of certain losses, such as

claims involving medical complications not recognized in the early stages of treatment or verdict

values for litigated claims that are different than the amount previously reserved to pay the

claims. They also account for losses that occurred during the policy period but are not reported

until a later date.

The calculation and selection of development factors to be applied to incurred losses are shown

in Table 1, beginning with HCP’s losses limited to the specific retention including ALAE as of

different evaluation dates. For example, Section A of the table shows losses incurred during the

11/1/05-06 period evaluated as of 12, 24, 36, and 48 months after the inception of that period. In

11

Table 1

HEALTH CARE PROVIDERS SELF‐INSURANCE TRUST


INCURRED LOSS DEVELOPMENT FACTORS(Limited to Specific Retention including ALAE)

A. INCURRED LOSSES

Age of Policy PeriodPolicy 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192Period Months Months Months Months Months Months Months Months Months Months Months Months Months Months Months Months

11/1/93‐94 $1,433,584 $2,556,779 $3,308,078 $3,746,630 $4,027,126 $3,801,973 $3,973,342 $4,059,792 $4,044,280 $4,065,457 $3,909,673 $3,895,151 $3,907,718 $3,911,250 $3,931,855 $3,980,54511/1/94‐95 2,522,056 4,082,442 4,990,661 5,240,397 5,249,020 5,719,887 6,101,291 6,084,240 6,023,545 6,166,390 6,095,954 6,151,962 6,172,378 6,188,063 6,445,67811/1/95‐96 3,542,135 5,423,665 6,096,852 6,352,922 7,434,890 8,167,331 8,107,523 7,892,342 7,782,714 7,715,654 7,787,920 7,883,994 7,990,789 8,401,07711/1/96‐97 3,190,609 4,447,977 5,355,860 6,777,644 7,702,290 8,366,326 8,576,494 8,778,187 9,136,852 9,243,721 9,439,593 9,594,431 9,832,85011/1/97‐98 2,347,354 3,852,220 5,327,997 6,227,672 6,473,239 6,865,248 7,005,654 6,998,467 6,979,637 7,168,650 7,258,688 7,487,24511/1/98‐99 3,002,024 4,825,408 6,045,455 6,727,130 7,424,802 7,711,783 8,097,020 8,600,362 8,932,815 9,106,584 9,457,33311/1/99‐00 3,419,871 5,019,268 6,271,556 6,759,919 7,679,939 8,245,132 8,223,225 8,476,099 8,584,217 8,757,64211/1/00‐01 3,717,817 5,674,478 7,118,024 8,596,969 9,046,080 9,557,134 10,039,795 10,901,253 11,392,57411/1/01‐02 3,980,429 6,208,472 7,650,210 9,088,997 9,859,260 10,569,973 10,857,753 11,488,67511/1/02‐03 4,694,084 6,906,166 9,037,983 10,654,838 11,560,171 11,979,588 13,013,60811/1/03‐04 4,028,528 6,114,047 7,624,729 9,351,198 10,281,805 11,407,82011/1/04‐05 4,196,097 6,422,303 8,480,799 10,313,903 12,090,43111/1/05‐06 3,600,873 5,718,371 7,419,407 9,426,01611/1/06‐07 4,876,566 7,983,741 10,953,68811/1/07‐08 5,324,906 9,163,90711/1/08‐09 4,250,611

B. AGE‐TO‐AGE FACTORS

Policy 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 84 to 96 96 to 108 108 to 120 120 to 132 132 to 144 144 to 156 156 to 168 168 to 180 180 to 192 192 toPeriod Months Months Months Months Months Months Months Months Months Months Months Months Months Months Months Ultimate

11/1/93‐94 1.783 1.294 1.133 1.075 0.944 1.045 1.022 0.996 1.005 0.962 0.996 1.003 1.001 1.005 1.01211/1/94‐95 1.619 1.222 1.050 1.002 1.090 1.067 0.997 0.990 1.024 0.989 1.009 1.003 1.003 1.04211/1/95‐96 1.531 1.124 1.042 1.170 1.099 0.993 0.973 0.986 0.991 1.009 1.012 1.014 1.05111/1/96‐97 1.394 1.204 1.265 1.136 1.086 1.025 1.024 1.041 1.012 1.021 1.016 1.02511/1/97‐98 1.641 1.383 1.169 1.039 1.061 1.020 0.999 0.997 1.027 1.013 1.03111/1/98‐99 1.607 1.253 1.113 1.104 1.039 1.050 1.062 1.039 1.019 1.03911/1/99‐00 1.468 1.249 1.078 1.136 1.074 0.997 1.031 1.013 1.02011/1/00‐01 1.526 1.254 1.208 1.052 1.056 1.051 1.086 1.04511/1/01‐02 1.560 1.232 1.188 1.085 1.072 1.027 1.05811/1/02‐03 1.471 1.309 1.179 1.085 1.036 1.08611/1/03‐04 1.518 1.247 1.226 1.100 1.11011/1/04‐05 1.531 1.321 1.216 1.17211/1/05‐06 1.588 1.297 1.27011/1/06‐07 1.637 1.37211/1/07‐08 1.721

Average 1.573 1.269 1.164 1.096 1.061 1.036 1.028 1.013 1.014 1.006 1.013 1.011 1.018 1.024 1.012Wtd Avg 1.567 1.272 1.172 1.100 1.065 1.037 1.032 1.018 1.014 1.011 1.015 1.014 1.024 1.028 1.0123 Yr Avg 1.649 1.330 1.237 1.119 1.073 1.055 1.058 1.032 1.022 1.024 1.020 1.014 1.0185 Yr Mid Avg 1.585 1.309 1.210 1.090 1.067 1.043 1.050 1.031 1.017 1.014 1.012NY‐NCCI 1.508 1.216 1.117 1.071 1.058 1.037 1.024 1.051 1.042 1.036 1.031 1.027 1.024 1.021 1.000 1.000NY‐Groups 1.530 1.210 1.110 1.070 1.045 1.040 1.035 1.030 1.025 1.014 1.011 1.010 1.008 1.007 1.000 1.000Selected 1.530 1.210 1.110 1.070 1.045 1.040 1.035 1.030 1.025 1.014 1.011 1.010 1.008 1.007 1.000 1.000

C. INCURRED LOSS DEVELOPMENT FACTORS

12 to 24 to 36 to 48 to 60 to 72 to 84 to 96 to 108 to 120 to 132 to 144 to 156 to 168 to 180 to 192 toUltimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate

2.743 1.793 1.482 1.335 1.248 1.194 1.148 1.109 1.077 1.051 1.036 1.025 1.015 1.007 1.000 1.000

12

general, the value of incurred losses increases from one evaluation to the next as a result of

IBNR.

Section B displays age-to-age factors, the rates by which losses develop from year to year. For

example, the 12 to 24 age-to-age factor for the 11/1/07-08 period is 1.721. This is the 24 month

incurred amount of $9,163,907 divided by the 12 month incurred amount of $5,324,906. The

age-to-age factor of 1.721 means that losses incurred during the 11/1/07-08 period increased by

72.1% during the 12 to 24 month interval. A loss development factor less than 1.000 indicates

that the value of incurred losses declined, possibly due to claims settling for amounts less than

previously reserved.

Averages of the age-to-age factors are shown at the bottom of Section B. The average is the

mean of all the age-to-age factors. The weighted average weights the factors for individual years

by the magnitude of losses for that given year, giving more weight to periods with higher losses.

The weighted average is the sum of the losses from one age divided by the sum of the losses

from the previous age for corresponding periods. The three-year average is the average of the

three most recent factors. The five-year mid-average is the average of the five most recent

factors excluding the high and low. The NY-NCCI factors are the 2009 New York NCCI

factors. The NY-Group factors are based on the experience of self-insured workers

compensation groups in New York. Due to the large increase in case reserves as of 5/31/10, the

NY-Group factors are selected as most indicative of HCP’s expected loss development. The

historical and expected loss development patterns are graphically illustrated in Figure 3 by solid

and dashed lines, respectively.

13



Figure 3

HISTORICAL AND EXPECTED DEVELOPMENT OF INCURRED LOSSES(Losses Limited to Specific Retention Including ALAE )

12 24 36 48 60 72 84 96 108 120 132 144 156 168 180

Policy Period in Months

0.0

5.0

10.0

15.0

20.0$ Millions

11/1/04-05

11/1/07-08

11/1/05-06

11/1/02-0311/1/03-04

11/1/06-07

11/1/01-02

11/1/08-09

14

Computation of the loss development factors in Section C is based on the selected age-to-age

factors. For instance, the 12 to ultimate factor is calculated by multiplying the 12 to 24 month

age-to-age factor by the 24 to ultimate loss development factor (2.743 = 1.530 x 1.793). Incurred

losses are limited to the specific retention in Section A of Table 2. As shown, currently 118

claims are reported in excess of the retention. Ultimate incurred losses are estimated in Section

B by multiplying the limited incurred losses by the loss development factors. For example,

limited incurred losses for the 11/1/08-09 period evaluated at $9,977,941 on 5/31/10 are

estimated to ultimately cost $19,247,448 ($9,977,941 x 1.929). The loss development factor of

1.929 means that the losses are expected to ultimately cost 92.9% more than incurred losses

evaluated on 5/31/10.

PAID LOSS DEVELOPMENT

The paid loss procedure employs an analysis similar to the previous method, but based on paid

loss data. This estimation technique is not influenced by changes in the loss reserve estimates of

the adjusters. However, larger development factors are required at a given age than the incurred

method. This analysis is shown Table 3, Figure 4, and Table 4.

INCURRED BORNHUETTER-FERGUSON

The incurred Bornhuetter-Ferguson method for developing an estimate of ultimate incurred

losses requires two parameters, the expected losses and reporting pattern. The accuracy of this

method depends on these parameters. The incurred Bornhuetter-Ferguson method involves two

calculation steps. In Section A of Table 5, IBNR is estimated by multiplying the expected losses

15

Table 2



ESTIMATED ULTIMATE INCURRED LOSSESINCURRED LOSS DEVELOPMENT

A. LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of Amount LimitedIncurred Claims in Incurred in Incurred

Policy Losses as Excess of Excess of Losses asPeriod of 5/31/10 Retention Retention of 5/31/10

4/1‐10/31/93 $ 1,876,190 1 $ 1,129,253 $ 1,876,190 *11/1/93‐94 5,751,234 4 1,415,542 5,751,234 *11/1/94‐95 7,718,763 5 721,146 7,718,763 *11/1/95‐96 9,714,819 5 801,809 9,714,819 *11/1/96‐97 14,938,193 15 3,942,546 14,938,193 *11/1/97‐98 9,917,743 7 1,351,537 8,566,20611/1/98‐99 12,498,365 13 1,658,532 10,839,83311/1/99‐00 11,975,898 9 2,184,280 9,791,61811/1/00‐01 17,633,536 16 3,888,433 13,745,10311/1/01‐02 16,277,102 11 1,676,545 14,600,55711/1/02‐03 19,569,848 6 1,243,823 18,326,02511/1/03‐04 21,563,378 11 1,831,878 19,731,50011/1/04‐05 23,173,234 6 1,365,420 21,807,81411/1/05‐06 19,313,161 5 693,498 18,619,66311/1/06‐07 21,945,148 4 1,499,834 20,445,31411/1/07‐08 16,449,007 0 0 16,449,00711/1/08‐09 9,977,941 0 0 9,977,941

Total $240,293,560 118 $25,404,076 $222,899,780

B. ESTIMATED ULTIMATE INCURRED LOSSES

Age of Incurred EstimatedIncurred Policy Loss Ultimate

Policy Losses as Period in Development IncurredPeriod of 5/31/10 Months Factor Losses

4/1‐10/31/93 $ 1,876,190 209.5 1.000 $ 1,876,19011/1/93‐94 5,751,234 199.0 1.000 5,751,23411/1/94‐95 7,718,763 187.0 1.000 7,718,76311/1/95‐96 9,714,819 175.0 1.003 9,743,96311/1/96‐97 14,938,193 163.0 1.010 15,087,57511/1/97‐98 8,566,206 151.0 1.019 8,728,96411/1/98‐99 10,839,833 139.0 1.029 11,154,18811/1/99‐00 9,791,618 127.0 1.042 10,202,86611/1/00‐01 13,745,103 115.0 1.061 14,583,55411/1/01‐02 14,600,557 103.0 1.089 15,900,00711/1/02‐03 18,326,025 91.0 1.124 20,598,45211/1/03‐04 19,731,500 79.0 1.165 22,987,19811/1/04‐05 21,807,814 67.0 1.214 26,474,68611/1/05‐06 18,619,663 55.0 1.280 23,833,16911/1/06‐07 20,445,314 43.0 1.386 28,337,20511/1/07‐08 16,449,007 31.0 1.582 26,022,32911/1/08‐09 9,977,941 21.0 1.929 19,247,448

Total $222,899,780 $268,247,791

* Did not limit to retention since policy is with Reliance and no recoveries are currently expected.

16

Table 3



PAID LOSS DEVELOPMENT FACTORS(Limited to Specific Retention including ALAE)

A. PAID LOSSES


11/1/93‐94 $ 591,077 $1,452,758 $1,944,489 $2,412,705 $2,908,331 $3,177,213 $3,313,428 $3,576,825 $3,496,399 $3,678,174 $3,668,916 $3,690,909 $3,728,849 $3,741,954 $3,826,502 $3,849,71811/1/94‐95 814,861 2,077,395 2,883,249 3,651,399 4,250,100 4,739,716 5,084,797 5,308,977 5,618,021 5,794,069 5,906,970 6,068,578 6,099,587 6,122,322 6,240,24211/1/95‐96 1,103,969 3,026,307 4,118,358 5,019,757 5,942,544 6,578,592 7,080,474 7,455,967 7,558,840 7,604,423 7,717,010 7,863,535 7,847,063 8,031,21911/1/96‐97 1,249,933 2,864,158 4,090,998 5,206,165 6,196,155 6,968,966 7,547,777 7,852,921 8,240,877 8,587,650 8,777,078 9,095,044 9,397,34011/1/97‐98 945,368 2,541,261 3,763,561 4,542,016 5,388,594 5,845,837 6,271,537 6,599,130 6,632,497 6,746,360 6,994,490 7,162,82211/1/98‐99 1,272,106 3,099,714 4,211,847 5,218,917 6,148,613 6,730,635 7,333,007 7,776,246 8,319,842 8,802,321 9,002,28411/1/99‐00 1,446,112 3,249,891 4,576,762 5,719,956 6,601,547 7,095,142 7,512,257 7,893,298 8,109,839 8,381,93711/1/00‐01 1,559,113 3,957,668 5,628,849 7,078,810 7,931,188 8,955,339 9,658,150 10,235,963 10,634,13711/1/01‐02 1,689,820 4,370,506 6,061,550 7,169,149 8,658,939 9,671,703 10,342,957 10,985,46811/1/02‐03 1,997,476 4,797,216 6,780,669 8,673,414 10,026,846 11,087,396 12,028,50911/1/03‐04 1,738,116 4,301,066 6,114,461 8,009,613 9,378,966 10,340,89011/1/04‐05 1,794,045 5,050,838 7,374,901 9,192,121 10,582,55111/1/05‐06 1,559,524 4,357,939 6,481,107 8,279,41111/1/06‐07 2,481,638 6,018,000 8,940,21511/1/07‐08 2,866,130 7,203,45711/1/08‐09 2,483,561

B. AGE‐TO‐AGE FACTORS

Policy 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 84 to 96 96 to 108 108 to 120 120 to 132 132 to 144 144 to 156 156 to 168 168 to 180 180 to 192 192 toPeriod Months Months Months Months Months Months Months Months Months Months Months Months Months Months Months Ultimate

11/1/93‐94 2.458 1.338 1.241 1.205 1.092 1.043 1.079 0.978 1.052 0.997 1.006 1.010 1.004 1.023 1.00611/1/94‐95 2.549 1.388 1.266 1.164 1.115 1.073 1.044 1.058 1.031 1.019 1.027 1.005 1.004 1.01911/1/95‐96 2.741 1.361 1.219 1.184 1.107 1.076 1.053 1.014 1.006 1.015 1.019 0.998 1.02311/1/96‐97 2.291 1.428 1.273 1.190 1.125 1.083 1.040 1.049 1.042 1.022 1.036 1.03311/1/97‐98 2.688 1.481 1.207 1.186 1.085 1.073 1.052 1.005 1.017 1.037 1.02411/1/98‐99 2.437 1.359 1.239 1.178 1.095 1.089 1.060 1.070 1.058 1.02311/1/99‐00 2.247 1.408 1.250 1.154 1.075 1.059 1.051 1.027 1.03411/1/00‐01 2.538 1.422 1.258 1.120 1.129 1.078 1.060 1.03911/1/01‐02 2.586 1.387 1.183 1.208 1.117 1.069 1.06211/1/02‐03 2.402 1.413 1.279 1.156 1.106 1.08511/1/03‐04 2.475 1.422 1.310 1.171 1.10311/1/04‐05 2.815 1.460 1.246 1.15111/1/05‐06 2.794 1.487 1.27711/1/06‐07 2.425 1.48611/1/07‐08 2.513

Average 2.531 1.417 1.250 1.172 1.104 1.073 1.056 1.030 1.034 1.019 1.022 1.012 1.010 1.021 1.006Wtd Avg 2.526 1.426 1.252 1.169 1.106 1.075 1.055 1.034 1.034 1.021 1.025 1.013 1.012 1.021 1.0063 Yr Avg 2.577 1.478 1.278 1.159 1.109 1.077 1.058 1.045 1.036 1.027 1.026 1.012 1.0105 Yr Mid Avg 2.594 1.456 1.267 1.159 1.109 1.077 1.057 1.038 1.031 1.021 1.023NY‐NCCI 2.470 1.451 1.231 1.155 1.102 1.069 1.052 1.065 1.055 1.047 1.041 1.036 1.032 1.028 1.025 1.082NY‐Groups 2.420 1.440 1.230 1.140 1.090 1.060 1.050 1.040 1.030 1.024 1.021 1.018 1.016 1.013 1.012 1.038Selected 2.565 1.455 1.265 1.160 1.110 1.075 1.055 1.045 1.035 1.030 1.025 1.020 1.020 1.020 1.015 1.038

C. PAID LOSS DEVELOPMENT FACTORS

12 to 24 to 36 to 48 to 60 to 72 to 84 to 96 to 108 to 120 to 132 to 144 to 156 to 168 to 180 to 192 toUltimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate

8.801 3.431 2.358 1.864 1.607 1.448 1.347 1.277 1.222 1.181 1.147 1.119 1.097 1.075 1.054 1.038

17



Figure 4

HISTORICAL AND EXPECTED DEVELOPMENT OF PAID LOSSES(Losses Limited to Specific Retention Including ALAE )

12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192

Policy Period in Months

0.0

5.0

10.0

15.0

20.0

25.0$ Millions

11/1/04-05

11/1/07-08

* Expected development of 3.8% after 192 months.

11/1/05-0611/1/02-03

11/1/03-04

11/1/06-07

11/1/01-02

11/1/08-09

18

Table 4



ESTIMATED ULTIMATE INCURRED LOSSESPAID LOSS DEVELOPMENT

A. LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of Amount LimitedPaid Claims in Paid in Paid

Policy Losses as Excess of Excess of Losses asPeriod of 5/31/10 Retention Retention of 5/31/10

4/1‐10/31/93 $ 979,670 1 $ 232,733 $ 979,670 *11/1/93‐94 4,187,063 1 314,552 4,187,063 *11/1/94‐95 6,326,624 1 34,082 6,326,624 *11/1/95‐96 8,133,926 1 40,950 8,133,926 *11/1/96‐97 10,048,740 5 478,888 10,048,740 *11/1/97‐98 7,339,917 1 151,632 7,188,28511/1/98‐99 9,547,147 3 378,179 9,168,96811/1/99‐00 8,711,192 2 221,252 8,489,94011/1/00‐01 11,429,679 4 527,573 10,902,10611/1/01‐02 11,198,133 1 9,286 11,188,84711/1/02‐03 12,455,841 0 0 12,455,84111/1/03‐04 10,683,523 0 0 10,683,52311/1/04‐05 11,198,052 0 0 11,198,05211/1/05‐06 9,393,189 0 0 9,393,18911/1/06‐07 10,967,425 1 570,461 10,396,96411/1/07‐08 9,410,744 0 0 9,410,74411/1/08‐09 4,532,253 0 0 4,532,253

Total $146,543,118 21 $2,959,588 $144,684,735


Age of Paid EstimatedPaid Policy Loss Ultimate

Policy Losses as Period in Development PaidPeriod of 5/31/10 Months Factor Losses

4/1‐10/31/93 $ 979,670 209.5 1.022 $ 1,001,22311/1/93‐94 4,187,063 199.0 1.031 4,316,86211/1/94‐95 6,326,624 187.0 1.044 6,604,99511/1/95‐96 8,133,926 175.0 1.062 8,638,22911/1/96‐97 10,048,740 163.0 1.084 10,892,83411/1/97‐98 7,188,285 151.0 1.106 7,950,24311/1/98‐99 9,168,968 139.0 1.130 10,360,93411/1/99‐00 8,489,940 127.0 1.160 9,848,33011/1/00‐01 10,902,106 115.0 1.197 13,049,82111/1/01‐02 11,188,847 103.0 1.243 13,907,73711/1/02‐03 12,455,841 91.0 1.304 16,242,41711/1/03‐04 10,683,523 79.0 1.385 14,796,67911/1/04‐05 11,198,052 67.0 1.507 16,875,46411/1/05‐06 9,393,189 55.0 1.700 15,968,42111/1/06‐07 10,396,964 43.0 2.036 21,168,21911/1/07‐08 9,410,744 31.0 2.704 25,446,65211/1/08‐09 4,532,253 21.0 4.198 19,026,398

Total $144,684,735 $216,095,458

* Did not limit to retention since policy is with Reliance and no recoveries are currently expected.

19

Table 5



ESTIMATED ULTIMATE INCURRED LOSSESINCURRED BORNHUETTER‐FERGUSON METHOD

(Limited to Specific Retention)

A. ESTIMATED IBNR

IncurredLoss Estimated

Policy Expected Development Ratio EstimatedPeriod Losses* Factor Unreported IBNR

4/1‐10/31/93 $ 410,000 1.000 0.000 $ 011/1/93‐94 4,530,000 1.000 0.000 011/1/94‐95 7,690,000 1.000 0.000 011/1/95‐96 8,680,000 1.003 0.003 26,04011/1/96‐97 10,180,000 1.010 0.010 101,80011/1/97‐98 6,160,000 1.019 0.019 117,04011/1/98‐99 7,480,000 1.029 0.028 209,44011/1/99‐00 9,510,000 1.042 0.040 380,40011/1/00‐01 11,570,000 1.061 0.057 659,49011/1/01‐02 13,770,000 1.089 0.082 1,129,14011/1/02‐03 17,200,000 1.124 0.110 1,892,00011/1/03‐04 20,740,000 1.165 0.142 2,945,08011/1/04‐05 24,910,000 1.214 0.176 4,384,16011/1/05‐06 26,640,000 1.280 0.219 5,834,16011/1/06‐07 26,260,000 1.386 0.278 7,300,28011/1/07‐08 27,640,000 1.582 0.368 10,171,52011/1/08‐09 18,850,000 1.929 0.482 9,085,700

Total $242,220,000 $44,236,250


EstimatedIncurred Ultimate

Policy Losses as Estimated IncurredPeriod of 5/31/10 IBNR Losses

4/1‐10/31/93 $ 1,876,190 $ 0 $ 1,876,19011/1/93‐94 5,751,234 0 5,751,23411/1/94‐95 7,718,763 0 7,718,76311/1/95‐96 9,714,819 26,040 9,740,85911/1/96‐97 14,938,193 101,800 15,039,99311/1/97‐98 8,566,206 117,040 8,683,24611/1/98‐99 10,839,833 209,440 11,049,27311/1/99‐00 9,791,618 380,400 10,172,01811/1/00‐01 13,745,103 659,490 14,404,59311/1/01‐02 14,600,557 1,129,140 15,729,69711/1/02‐03 18,326,025 1,892,000 20,218,02511/1/03‐04 19,731,500 2,945,080 22,676,58011/1/04‐05 21,807,814 4,384,160 26,191,97411/1/05‐06 18,619,663 5,834,160 24,453,82311/1/06‐07 20,445,314 7,300,280 27,745,59411/1/07‐08 16,449,007 10,171,520 26,620,52711/1/08‐09 9,977,941 9,085,700 19,063,641

Total $222,899,780 $44,236,250 $267,136,030

* From Appendix B, Exhibit I

20

by the expected percent of unreported losses implied by the incurred loss development factor.

Ultimate incurred losses are estimated in Section B by adding the estimated IBNR to the incurred

losses as of 5/31/10.

PAID BORNHUETTER-FERGUSON

The paid Bornhuetter-Ferguson method also uses two parameters to estimate ultimate incurred

losses. These parameters are the expected losses and payment pattern. In Section A of Table 6,

outstanding losses are estimated by multiplying the expected losses by the expected ratio of

outstanding losses implied by the paid loss development factor. Ultimate incurred losses are

estimated in Section B by adding paid losses and the estimate of outstanding losses.

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES

The results of the methods are compared in Table 7, and the ultimate incurred losses are selected

for each period. An average of the methods is selected unless otherwise noted. If a paid method

is less than incurred losses, the corresponding incurred method is substituted in the average. The

implied assumption is that it is unlikely that ultimate losses will be less than incurred losses. The

selection procedure is depicted in Figure 5.

Estimated ultimate losses are limited to the aggregate retention in Table 8. In Section A,

ultimate losses are assigned to the aggregate retention policy periods. In Section B, the ultimate

losses are limited to the aggregate and assigned back to the reserve policy periods. As of

10/31/09, the aggregates have not been exceeded on an incurred or paid basis. As of 5/31/10, the

aggregates are exceeded on an incurred basis for 10/31/98-99, 10/31/00-01, 10/31/01-02, and

10/31/02-03.

21

Table 6



ESTIMATED ULTIMATE INCURRED LOSSESPAID BORNHUETTER‐FERGUSON METHOD

(Limited to Specific Retention)

A. ESTIMATED OUTSTANDING LOSSES

Paid Loss Estimated EstimatedPolicy Expected Development Ratio OutstandingPeriod Losses* Factor Outstanding Losses

4/1‐10/31/93 $ 410,000 1.022 0.022 $ 9,02011/1/93‐94 4,530,000 1.031 0.030 135,90011/1/94‐95 7,690,000 1.044 0.042 322,98011/1/95‐96 8,680,000 1.062 0.058 503,44011/1/96‐97 10,180,000 1.084 0.077 783,86011/1/97‐98 6,160,000 1.106 0.096 591,36011/1/98‐99 7,480,000 1.130 0.115 860,20011/1/99‐00 9,510,000 1.160 0.138 1,312,38011/1/00‐01 11,570,000 1.197 0.165 1,909,05011/1/01‐02 13,770,000 1.243 0.195 2,685,15011/1/02‐03 17,200,000 1.304 0.233 4,007,60011/1/03‐04 20,740,000 1.385 0.278 5,765,72011/1/04‐05 24,910,000 1.507 0.336 8,369,76011/1/05‐06 26,640,000 1.700 0.412 10,975,68011/1/06‐07 26,260,000 2.036 0.509 13,366,34011/1/07‐08 27,640,000 2.704 0.630 17,413,20011/1/08‐09 18,850,000 4.198 0.762 14,363,700

Total $242,220,000 $83,375,340


EstimatedPaid Estimated Ultimate

Policy Losses as Outstanding IncurredPeriod of 5/31/10 Losses Losses

4/1‐10/31/93 $ 979,670 $ 9,020 $ 988,69011/1/93‐94 4,187,063 135,900 4,322,96311/1/94‐95 6,326,624 322,980 6,649,60411/1/95‐96 8,133,926 503,440 8,637,36611/1/96‐97 10,048,740 783,860 10,832,60011/1/97‐98 7,188,285 591,360 7,779,64511/1/98‐99 9,168,968 860,200 10,029,16811/1/99‐00 8,489,940 1,312,380 9,802,32011/1/00‐01 10,902,106 1,909,050 12,811,15611/1/01‐02 11,188,847 2,685,150 13,873,99711/1/02‐03 12,455,841 4,007,600 16,463,44111/1/03‐04 10,683,523 5,765,720 16,449,24311/1/04‐05 11,198,052 8,369,760 19,567,81211/1/05‐06 9,393,189 10,975,680 20,368,86911/1/06‐07 10,396,964 13,366,340 23,763,30411/1/07‐08 9,410,744 17,413,200 26,823,94411/1/08‐09 4,532,253 14,363,700 18,895,953

Total $144,684,735 $83,375,340 $228,060,075

* From Appendix B, Exhibit I

22

Table 7



SELECTED ESTIMATED ULTIMATE INCURRED LOSSES(Limited to Specific Retention)

SelectedEstimated

Incurred Incurred Paid UltimatePolicy Loss Paid Loss Bornhuetter‐ Bornhuetter‐ IncurredPeriod Development Development Ferguson Ferguson Losses^

4/1‐10/31/93 $ 1,876,190 $ 1,001,223 # $ 1,876,190 $ 988,690 # $ 1,876,19011/1/93‐94 5,751,234 4,316,862 # 5,751,234 4,322,963 # 5,751,23411/1/94‐95 7,718,763 6,604,995 # 7,718,763 6,649,604 # 7,718,76311/1/95‐96 9,743,963 8,638,229 # 9,740,859 8,637,366 # 9,742,41111/1/96‐97 15,087,575 10,892,834 # 15,039,993 10,832,600 # 15,063,78411/1/97‐98 8,728,964 7,950,243 # 8,683,246 7,779,645 # 8,706,10511/1/98‐99 11,154,188 10,360,934 # 11,049,273 10,029,168 # 11,101,73111/1/99‐00 10,202,866 9,848,330 10,172,018 9,802,320 10,187,442 *11/1/00‐01 14,583,554 13,049,821 # 14,404,593 12,811,156 # 14,494,07411/1/01‐02 15,900,007 13,907,737 # 15,729,697 13,873,997 # 15,814,85211/1/02‐03 20,598,452 16,242,417 # 20,218,025 16,463,441 # 20,408,23911/1/03‐04 22,987,198 14,796,679 # 22,676,580 16,449,243 # 22,831,88911/1/04‐05 26,474,686 16,875,464 # 26,191,974 19,567,812 # 26,333,33011/1/05‐06 23,833,169 15,968,421 # 24,453,823 20,368,869 23,122,25811/1/06‐07 28,337,205 21,168,219 27,745,594 23,763,304 25,253,58111/1/07‐08 26,022,329 25,446,652 26,620,527 26,823,944 26,228,36311/1/08‐09 19,247,448 19,026,398 19,063,641 18,895,953 19,058,360

Total $268,247,791 $216,095,458 $267,136,030 $228,060,075 $263,692,606

^ Selected the average of all methods unless otherwise noted.# Substituted the corresponding incurred method in the average since this estimate is less than incurred losses.* Selected the average of the incurred methods.

23



Figure 5

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES(Limited to Specific Retention)

1.9

5.8

7.7

9.7

15.1

8.7

11.110.2

14.515.8

20.4

22.8

26.3

23.1

25.326.2

19.1

4/1-10

/31/93

11/1/

93-94

11/1/

94-95

11/1/

95-96

11/1/

96-97

11/1/

97-98

11/1/

98-99

11/1/

99-00

11/1/

00-01

11/1/

01-02

11/1/

02-03

11/1/

03-04

11/1/

04-05

11/1/

05-06

11/1/

06-07

11/1/

07-08

11/1/

08-09

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0$ Millions

Inc Development Pd Development Inc B-F Pd B-F Selected

24

Table 8



LOSSES LIMITED TO AGGREGATE RETENTION(Limited to Specific Retention)

A. ULTIMATE LOSSES ASSIGNED TO AGGREGATE POLICY PERIODS

Selected SelectedEstimated Limited Limited EstimatedUltimate Incurred Incurred Ultimate

Policy Incurred Losses as Policy Losses as IncurredPeriod Losses^ of 5/31/10 Period of 5/31/10 Losses*

4/1‐10/31/93 $ 1,876,190 $ 1,876,190 4/1‐10/30/93 $ 1,876,190 $ 1,876,19011/1/93‐94 5,751,234 5,751,234 10/31/93‐94 5,750,991 5,750,99111/1/94‐95 7,718,763 7,718,763 10/31/94‐95 7,708,239 7,708,23911/1/95‐96 9,742,411 9,714,819 10/31/95‐96 9,551,528 9,578,65611/1/96‐97 15,063,784 14,938,193 10/31/96‐97 15,109,506 15,236,53711/1/97‐98 8,706,105 8,566,206 10/31/97‐98 8,568,950 8,708,89411/1/98‐99 11,101,731 10,839,833 10/31/98‐99 10,834,960 11,096,74011/1/99‐00 10,187,442 9,791,618 10/31/99‐00 9,793,963 10,189,88211/1/00‐01 14,494,074 13,745,103 10/31/00‐01 13,729,866 14,478,00711/1/01‐02 15,814,852 14,600,557 10/31/01‐02 14,618,323 15,834,09611/1/02‐03 20,408,239 18,326,025 10/31/02‐03 18,325,837 20,408,03011/1/03‐04 22,831,889 19,731,500 10/31/03‐04 19,731,688 22,832,10711/1/04‐05 26,333,330 21,807,814 10/31/04‐05 21,792,749 26,315,13911/1/05‐06 23,122,258 18,619,663 10/31/05‐06 18,634,729 23,140,96711/1/06‐07 25,253,581 20,445,314 10/31/06‐07 20,445,060 25,253,26711/1/07‐08 26,228,363 16,449,007 10/31/07‐08 16,431,109 26,199,82411/1/08‐09 19,058,360 9,977,941 10/31/08‐10/31/09 9,996,092 19,085,040

Total $263,692,606 $222,899,780 Total $222,899,780 $263,692,606

B. APPLICATION OF AGGREGATE

Selected LimitedEstimated EstimatedUltimate Ultimate

Policy Incurred Excess Policy IncurredPeriod Losses Aggregate Aggregate Period Losses#

10/31/97‐98 $ 8,708,894 $10,362,633 $ 0 11/1/97‐98 $ 8,706,10510/31/98‐99 11,096,740 10,261,155 835,585 11/1/98‐99 10,266,14610/31/99‐00 10,189,882 10,055,395 134,487 11/1/99‐00 10,052,95510/31/00‐01 14,478,007 12,978,402 1,499,605 11/1/00‐01 12,994,46910/31/01‐02 15,834,096 13,653,582 2,180,514 11/1/01‐02 13,634,33810/31/02‐03 20,408,030 14,915,069 5,000,000 11/1/02‐03 15,408,239

Total $80,715,649 $ 9,650,191 $71,062,252

^ From Table 7.* Based on the relationship between the selected ultimate losses and incurred losses for the matching period.# Equal to the selected ultimate losses minus the excess aggregate amount for the matching period.

25

ESTIMATED REQUIRED RESERVES

The required reserves are estimated in Table 9. The estimated ultimate incurred, incurred, and

paid losses retained by HCP are summarized. The case reserves are shown as the difference

between the incurred and paid losses. IBNR is estimated as the difference between the estimated

ultimate incurred losses and incurred losses. The total required reserves as of 10/31/09 are then

estimated by adding the case reserves and IBNR or by subtracting paid losses from the estimated

ultimate incurred losses.

ESTIMATED REQUIRED RESERVES PAYOUT

Two types of paid to incurred ratios that check the reasonableness of the estimates are calculated

in Table 10. Section A shows paid losses divided by incurred losses as of different ages. This

analysis assists in detecting changes in reserving and settlement practices. If payment and

reserving procedures are consistent between periods, the numbers within each column should be

relatively consistent. Additional tests of the changes in reserving and settlement practices

require a history of reported and closed claims counts which are not available from the prior

actuarial reports for this fund. Although every effort is made in this report to accurately estimate

the reserves, the volatility of the claims experience for this fund decreases the confidence in the

actuarial central estimate and increases the possibility that the actual experience will differ

significantly from expected.

Section B compares paid losses with the estimates of ultimate incurred losses. These ratios serve

two purposes. First, they test the reasonableness of the selected estimated ultimate incurred

losses. If losses are paid at a consistent rate, there is a sufficient volume of losses, and there are

no distorting effects from large claims, the ratios of paid losses to estimated ultimate incurred

26

Table 9



ESTIMATED REQUIRED RESERVES AS OF 10/31/09(Limited to Specific and Aggregate Retentions)

A. LOSS SUMMARY

EstimatedUltimate Incurred Paid

Policy Incurred Losses as Losses asPeriod Losses of 10/31/09 of 10/31/09

4/1‐10/31/93 $ 1,876,190 $ 1,030,114 $ 955,24911/1/93‐94 5,751,234 4,260,719 4,124,14411/1/94‐95 7,718,763 6,445,678 6,240,24211/1/95‐96 9,742,411 8,765,174 8,031,21911/1/96‐97 15,063,784 10,793,244 9,537,85111/1/97‐98 8,706,105 7,487,245 7,162,82211/1/98‐99 10,266,146 9,457,333 9,002,28411/1/99‐00 10,052,955 8,757,642 8,381,93711/1/00‐01 12,994,469 11,392,574 10,634,13711/1/01‐02 13,634,338 11,488,675 10,985,46811/1/02‐03 15,408,239 13,013,608 12,028,50911/1/03‐04 22,831,889 11,407,820 10,340,89011/1/04‐05 26,333,330 12,090,431 10,582,55111/1/05‐06 23,122,258 9,426,016 8,279,41111/1/06‐07 25,253,581 10,953,688 8,940,21511/1/07‐08 26,228,363 9,163,907 7,203,45711/1/08‐09 19,058,360 4,250,611 2,483,561

Total $254,042,415 $150,184,479 $134,913,947

B. ESTIMATED REQUIRED RESERVES AS OF 10/31/09

EstimatedCase Estimated Required

Policy Reserves as IBNR as Reserves asPeriod of 10/31/09 of 10/31/09 of 10/31/09

4/1‐10/31/93 $ 74,865 $ 846,076 $ 920,94111/1/93‐94 136,575 1,490,515 1,627,09011/1/94‐95 205,436 1,273,085 1,478,52111/1/95‐96 733,955 977,237 1,711,19211/1/96‐97 1,255,393 4,270,540 5,525,93311/1/97‐98 324,423 1,218,860 1,543,28311/1/98‐99 455,049 808,813 1,263,86211/1/99‐00 375,705 1,295,313 1,671,01811/1/00‐01 758,437 1,601,895 2,360,33211/1/01‐02 503,207 2,145,663 2,648,87011/1/02‐03 985,099 2,394,631 3,379,73011/1/03‐04 1,066,930 11,424,069 12,490,99911/1/04‐05 1,507,880 14,242,899 15,750,77911/1/05‐06 1,146,605 13,696,242 14,842,84711/1/06‐07 2,013,473 14,299,893 16,313,36611/1/07‐08 1,960,450 17,064,456 19,024,90611/1/08‐09 1,767,050 14,807,749 16,574,799

Total $15,270,532 $103,857,936 $119,128,468

27

Table 10



PAID TO INCURRED RATIOS(Limited to Specific Retention including ALAE)

A. PAID LOSSES/INCURRED LOSSES


11/1/93‐94 0.412 0.568 0.588 0.644 0.722 0.836 0.834 0.881 0.865 0.905 0.938 0.948 0.954 0.957 0.973 0.96711/1/94‐95 0.323 0.509 0.578 0.697 0.810 0.829 0.833 0.873 0.933 0.940 0.969 0.986 0.988 0.989 0.96811/1/95‐96 0.312 0.558 0.675 0.790 0.799 0.805 0.873 0.945 0.971 0.986 0.991 0.997 0.982 0.95611/1/96‐97 0.392 0.644 0.764 0.768 0.804 0.833 0.880 0.895 0.902 0.929 0.930 0.948 0.95611/1/97‐98 0.403 0.660 0.706 0.729 0.832 0.852 0.895 0.943 0.950 0.941 0.964 0.95711/1/98‐99 0.424 0.642 0.697 0.776 0.828 0.873 0.906 0.904 0.931 0.967 0.95211/1/99‐00 0.423 0.647 0.730 0.846 0.860 0.861 0.914 0.931 0.945 0.95711/1/00‐01 0.419 0.697 0.791 0.823 0.877 0.937 0.962 0.939 0.93311/1/01‐02 0.425 0.704 0.792 0.789 0.878 0.915 0.953 0.95611/1/02‐03 0.426 0.695 0.750 0.814 0.867 0.926 0.92411/1/03‐04 0.431 0.703 0.802 0.857 0.912 0.90611/1/04‐05 0.428 0.786 0.870 0.891 0.87511/1/05‐06 0.433 0.762 0.874 0.87811/1/06‐07 0.509 0.754 0.81611/1/07‐08 0.538 0.78611/1/08‐09 0.584

Average 0.430 0.674 0.745 0.792 0.839 0.870 0.897 0.919 0.929 0.946 0.957 0.967 0.970 0.967 0.971 0.9673 Yr Avg 0.544 0.767 0.853 0.875 0.885 0.916 0.946 0.942 0.936 0.955 0.949 0.967 0.975 0.967

B. PAID LOSSES/ESTIMATED ULTIMATE INCURRED LOSSES

EstimatedPolicy 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 UltimatePeriod Months Months Months Months Months Months Months Months Months Months Months Months Months Months Months Months Losses

11/1/93‐94 0.103 0.253 0.338 0.420 0.506 0.552 0.576 0.622 0.608 0.640 0.638 0.642 0.648 0.651 0.665 0.669 $ 5,751,23411/1/94‐95 0.106 0.269 0.374 0.473 0.551 0.614 0.659 0.688 0.728 0.751 0.765 0.786 0.790 0.793 0.808 7,718,76311/1/95‐96 0.113 0.311 0.423 0.515 0.610 0.675 0.727 0.765 0.776 0.781 0.792 0.807 0.805 0.824 9,742,41111/1/96‐97 0.083 0.190 0.272 0.346 0.411 0.463 0.501 0.521 0.547 0.570 0.583 0.604 0.624 15,063,78411/1/97‐98 0.109 0.292 0.432 0.522 0.619 0.671 0.720 0.758 0.762 0.775 0.803 0.823 8,706,10511/1/98‐99 0.115 0.279 0.379 0.470 0.554 0.606 0.661 0.700 0.749 0.793 0.811 11,101,73111/1/99‐00 0.142 0.319 0.449 0.561 0.648 0.696 0.737 0.775 0.796 0.823 10,187,44211/1/00‐01 0.108 0.273 0.388 0.488 0.547 0.618 0.666 0.706 0.734 14,494,07411/1/01‐02 0.107 0.276 0.383 0.453 0.548 0.612 0.654 0.695 15,814,85211/1/02‐03 0.098 0.235 0.332 0.425 0.491 0.543 0.589 20,408,23911/1/03‐04 0.076 0.188 0.268 0.351 0.411 0.453 22,831,88911/1/04‐05 0.068 0.192 0.280 0.349 0.402 26,333,33011/1/05‐06 0.067 0.188 0.280 0.358 23,122,25811/1/06‐07 0.098 0.238 0.354 25,253,58111/1/07‐08 0.109 0.275 26,228,36311/1/08‐09 0.130 19,058,360

$261,816,416Average 0.102 0.252 0.354 0.441 0.525 0.591 0.649 0.692 0.713 0.733 0.732 0.732 0.717 0.756 0.737 0.669Wtd Avg 0.088 0.240 0.337 0.419 0.500 0.572 0.640 0.687 0.708 0.726 0.724 0.721 0.707 0.771 0.747 0.6693 Yr Avg 0.112 0.234 0.305 0.353 0.435 0.536 0.636 0.725 0.760 0.797 0.732 0.745 0.740 0.756Selected 0.100 0.250 0.350 0.430 0.510 0.580 0.640 0.695 0.745 0.790 0.830 0.865 0.895 0.920 0.945 0.970

28

losses are expected to be relatively consistent within each column. The second purpose of

Section B is to provide an estimate of the payout schedule to allocate the reserves to the period in

which they are expected to be paid. The selected payout schedule is shown at the bottom of

Section B. In Table 11, the undiscounted reserves are assigned to the period in which they are

expected to be paid based on the selected schedule. The actual paid for 11/1/09 - 5/31/10 is

included in the estimated amount for 11/1/09 – 10/31/10.

29

Table 11


ESTIMATED AMOUNT PAID IN INTERVAL AS OF 10/31/09(Limited to Specific and Aggregate Retentions)

A. ESTIMATED AMOUNT PAID IN INTERVAL NOT LIMITED BY AGGREGATE

Policy 11/1/09‐ 11/1/10‐ 11/1/11‐ 11/1/12‐ 11/1/13‐ 11/1/14‐ 11/1/15‐ 11/1/16‐ 11/1/17‐ 11/1/18‐ 11/1/19‐ 11/1/20‐ 11/1/21‐ 11/1/22‐ 11/1/23‐ 11/1/24‐ 11/1/25‐ 11/1/26‐ 11/1/27‐Period 10/31/10 10/31/11 10/31/12 10/31/13 10/31/14 10/31/15 10/31/16 10/31/17 10/31/18 10/31/19 10/31/20 10/31/21 10/31/22 10/31/23 10/31/24 10/31/25 10/31/26 10/31/27 10/31/28 Total

4/1‐10/31/93 360,616 280,162 280,162 $ 920,94111/1/93‐94 178,784 868,984 289,661 289,661 1,627,09011/1/94‐95 434,417 174,017 522,052 174,017 174,017 1,478,52111/1/95‐96 350,166 618,648 123,730 371,189 123,730 123,730 1,711,19211/1/96‐97 1,068,116 1,393,068 1,393,068 278,614 835,841 278,614 278,614 5,525,93311/1/97‐98 181,137 324,321 324,321 324,321 64,864 194,592 64,864 64,864 1,543,28311/1/98‐99 359,960 386,553 322,127 322,127 322,127 64,425 193,276 64,425 64,425 2,099,44711/1/99‐00 262,321 317,714 272,327 226,939 226,939 226,939 45,388 136,163 45,388 45,388 1,805,50511/1/00‐01 565,993 627,418 548,991 470,563 392,136 392,136 392,136 78,427 235,282 78,427 78,427 3,859,93711/1/01‐02 555,358 754,240 670,436 586,631 502,827 419,022 419,022 419,022 83,804 251,413 83,804 83,804 4,829,38411/1/02‐03 984,970 1,212,256 1,091,030 969,805 848,579 727,353 606,128 606,128 606,128 121,226 363,677 121,226 121,226 8,379,73011/1/03‐04 1,131,488 1,735,481 1,577,710 1,419,939 1,262,168 1,104,397 946,626 788,855 788,855 788,855 157,771 473,313 157,771 157,771 12,490,99911/1/04‐05 1,593,058 2,022,532 1,853,987 1,685,443 1,516,899 1,348,354 1,179,810 1,011,266 842,721 842,721 842,721 168,544 505,633 168,544 168,544 15,750,77911/1/05‐06 1,980,048 1,837,543 1,575,037 1,443,784 1,312,530 1,181,277 1,050,024 918,771 787,518 656,265 656,265 656,265 131,253 393,759 131,253 131,253 14,842,84711/1/06‐07 2,269,798 1,971,027 1,724,649 1,478,270 1,355,081 1,231,892 1,108,703 985,514 862,324 739,135 615,946 615,946 615,946 123,189 369,568 123,189 123,189 16,313,36611/1/07‐08 3,228,010 1,944,233 1,944,233 1,701,204 1,458,175 1,336,660 1,215,146 1,093,631 972,117 850,602 729,088 607,573 607,573 607,573 121,515 364,544 121,515 121,515 19,024,90611/1/08‐09 3,157,828 1,788,929 1,431,144 1,431,144 1,252,251 1,073,358 983,911 894,465 805,018 715,572 626,125 536,679 447,232 447,232 447,232 89,446 268,339 89,446 89,446 16,574,799

Total 18,662,067 18,257,126 15,944,663 13,173,650 11,648,164 9,702,750 8,483,648 7,061,532 6,093,581 5,089,605 4,153,825 3,263,350 2,586,634 1,898,069 1,238,112 708,432 513,043 210,961 89,446 $128,778,659

B. ESTIMATED RECOVERABLE ON AGGREGATE


11/1/98‐99 126,905 322,127 64,425 193,276 64,425 64,425 $ 835,58511/1/99‐00 43,711 45,388 45,388 134,48711/1/00‐01 244,769 392,136 392,136 78,427 235,282 78,427 78,427 1,499,60511/1/01‐02 420,621 419,022 419,022 419,022 83,804 251,413 83,804 83,804 2,180,51411/1/02‐03 878,330 848,579 727,353 606,128 606,128 606,128 121,226 363,677 121,226 121,226 5,000,000

Total 0 0 0 1,005,236 1,836,096 1,602,937 1,610,563 1,211,714 1,035,027 496,454 525,908 205,030 121,226 0 0 0 0 0 0 $ 9,650,191

C. ESTIMATED AMOUNT PAID IN INTERVAL LIMITED BY AGGREGATE


Total 18,662,067 18,257,126 15,944,663 12,168,415 9,812,067 8,099,813 6,873,086 5,849,818 5,058,554 4,593,151 3,627,917 3,058,320 2,465,408 1,898,069 1,238,112 708,432 513,043 210,961 89,446 $119,128,468

30

HISTORICAL PROFITABILITY ANALYSIS

When evaluating the estimates contained in this report, it is important to review the underwriting

results of each period to evaluate the program’s direction. Section A of Table 12 and Figure 6

present a comparison of the funds available to pay claims to the estimated ultimate incurred

losses.

Investment income is then combined with the underwriting results to estimate net income by

policy period in Section B. The estimated surplus for claims incurred 4/1/93-10/31/08, or

cumulative net income, is ($78,140,016) after including loss sensitive premium. This estimate

does not include investment income expected to be earned on the loss reserves before they are

paid.

The underwriting results per $100 payroll are shown in Section C and Figure 7. Paid, incurred,

estimated ultimate incurred, and permissible loss ratios are shown in Table 13 to further illustrate

HCP’s underwriting results. Also shown are combined ratios.

31

Table 12




A. ESTIMATED UNDERWRITING INCOME

EstimatedFunds Ultimate Estimated

Policy Operating Available Incurred UnderwritingPeriod Premium* Expenses* for Claims Losses Income

4/1‐10/31/93 $ 358,978 $ 155,259 $ 203,719 $ 1,876,190 ($ 1,672,471)11/1/93‐94 3,578,020 845,373 2,732,647 5,751,234 ( 3,018,587)11/1/94‐95 7,541,677 1,388,440 6,153,237 7,718,763 ( 1,565,526)11/1/95‐96 9,726,798 1,680,019 8,046,779 9,742,411 ( 1,695,632)11/1/96‐97 7,859,993 2,345,567 5,514,426 15,063,784 ( 9,549,358)11/1/97‐98 5,394,268 1,622,257 3,772,011 8,706,105 ( 4,934,094)11/1/98‐99 5,492,117 2,365,509 3,126,608 10,266,146 ( 7,139,538)11/1/99‐00 7,563,330 2,609,630 4,953,700 10,052,955 ( 5,099,255)11/1/00‐01 9,602,287 3,274,447 6,327,840 12,994,469 ( 6,666,629)11/1/01‐02 11,667,864 3,753,097 7,914,767 13,634,338 ( 5,719,571)11/1/02‐03 16,474,326 4,588,808 11,885,518 15,408,239 ( 3,522,721)11/1/03‐04 15,034,242 4,643,456 10,390,786 22,831,889 ( 12,441,103)11/1/04‐05 15,938,762 4,507,693 11,431,069 26,333,330 ( 14,902,261)11/1/05‐06 19,476,120 6,794,409 12,681,711 23,122,258 ( 10,440,547)11/1/06‐07 21,217,089 5,299,300 15,917,789 25,253,581 ( 9,335,792)11/1/07‐08 16,668,404 1,057,469 15,610,935 26,228,363 ( 10,617,428)

Total $173,594,275 $46,930,733 $126,663,542 $234,984,055 ($108,320,513)

B. ESTIMATED NET INCOME AFTER LOSS SENSITIVE PREMIUM

EstimatedEstimated Investment Net Income

Policy Underwriting and Other Estimated Loss Sensitive After LossPeriod Income Income* Net Income Premium* Sensitive Prem

4/1‐10/31/93 ($ 1,672,471) $ 5,048 ($ 1,667,423) $ 0 ($ 1,667,423)11/1/93‐94 ( 3,018,587) 94,756 ( 2,923,831) 0 ( 2,923,831)11/1/94‐95 ( 1,565,526) 418,807 ( 1,146,719) 0 ( 1,146,719)11/1/95‐96 ( 1,695,632) 930,068 ( 765,564) 0 ( 765,564)11/1/96‐97 ( 9,549,358) 2,630,912 ( 6,918,446) 0 ( 6,918,446)11/1/97‐98 ( 4,934,094) 1,941,090 ( 2,993,004) 0 ( 2,993,004)11/1/98‐99 ( 7,139,538) 2,808,679 ( 4,330,859) 0 ( 4,330,859)11/1/99‐00 ( 5,099,255) 893,128 ( 4,206,127) 0 ( 4,206,127)11/1/00‐01 ( 6,666,629) 640,338 ( 6,026,291) 0 ( 6,026,291)11/1/01‐02 ( 5,719,571) 348,084 ( 5,371,487) 6,319,578 948,09111/1/02‐03 ( 3,522,721) ( 558,118) ( 4,080,839) 5,671,976 1,591,13711/1/03‐04 ( 12,441,103) 420,678 ( 12,020,425) 1,985,059 ( 10,035,366)11/1/04‐05 ( 14,902,261) 1,350,078 ( 13,552,183) 999,344 ( 12,552,839)11/1/05‐06 ( 10,440,547) 383,471 ( 10,057,076) 2,702,404 ( 7,354,672)11/1/06‐07 ( 9,335,792) 844,100 ( 8,491,692) ( 3,053,703) ( 11,545,395)11/1/07‐08 ( 10,617,428) 830,511 ( 9,786,917) 1,574,209 ( 8,212,708)

Total ($108,320,513) $13,981,630 ($94,338,883) $16,198,867 ($ 78,140,016)

* Audited financial statements.

32

Table 12 (Continued)




C. ESTIMATED UNDERWRITING INCOME PER $100 PAYROLL

EstimatedFunds Ultimate Estimated

Policy Operating Available Incurred UnderwritingPeriod Premium Expenses for Claims Losses Income

4/1‐10/31/93 $2.47 $1.07 $1.07 $12.92 ($11.85)11/1/93‐94 2.31 0.55 1.76 3.71 ( 1.95)11/1/94‐95 2.90 0.53 2.37 2.97 ( 0.60)11/1/95‐96 3.42 0.59 2.83 3.42 ( 0.59)11/1/96‐97 2.40 0.72 1.68 4.60 ( 2.92)11/1/97‐98 1.64 0.49 1.15 2.64 ( 1.49)11/1/98‐99 1.46 0.63 0.83 2.73 ( 1.90)11/1/99‐00 1.66 0.57 1.09 2.21 ( 1.12)11/1/00‐01 1.83 0.63 1.20 2.48 ( 1.28)11/1/01‐02 2.06 0.66 1.40 2.41 ( 1.01)11/1/02‐03 2.66 0.74 1.92 2.49 ( 0.57)11/1/03‐04 2.18 0.67 1.51 3.30 ( 1.79)11/1/04‐05 2.05 0.58 1.47 3.38 ( 1.91)11/1/05‐06 2.36 0.82 1.54 2.80 ( 1.26)11/1/06‐07 2.29 0.57 1.72 2.72 ( 1.00)11/1/07‐08 1.70 0.11 1.59 2.68 ( 1.09)

D. PAYROLL

Policy TotalPeriod Payroll (100)^

4/1‐10/31/93 $ 145,21611/1/93‐94 1,550,51111/1/94‐95 2,599,64411/1/95‐96 2,846,03411/1/96‐97 3,272,71211/1/97‐98 3,294,95511/1/98‐99 3,758,66511/1/99‐00 4,549,95311/1/00‐01 5,233,22711/1/01‐02 5,665,38711/1/02‐03 6,188,82511/1/03‐04 6,911,80711/1/04‐05 7,783,69311/1/05‐06 8,248,49411/1/06‐07 9,280,00011/1/07‐08 9,800,000

^ SGRisk actuarial report.

33



Figure 6

HISTORICAL PROFITABILITY ANALYSIS(Excluding Investment Income)

2.0

6.6

9.1

11.4

17.4

10.3

12.6 12.7

16.317.4

20.0

27.5

30.829.9

30.6

27.3

0.4

3.6

7.5

9.7

7.9

5.4 5.5

7.6

9.6

11.7

16.5

15.015.9

19.5

21.2

16.7

4/1-10

/31/93

11/1/

93-94

11/1/

94-95

11/1/

95-96

11/1/

96-97

11/1/

97-98

11/1/

98-99

11/1/

99-00

11/1/

00-01

11/1/

01-02

11/1/

02-03

11/1/

03-04

11/1/

04-05

11/1/

05-06

11/1/

06-07

11/1/

07-08

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0$ Millions

Est Ult Losses Operating Expenses Premium

34



Figure 7

HISTORICAL PROFITABILITY ANALYSIS(Excluding Investment Income)

4.26

3.50

4.01

5.32

3.13

3.36

2.78

3.11 3.073.23

3.97 3.96

3.62

3.29

2.79

2.31

2.90

3.42

2.40

1.641.46

1.661.83

2.06

2.66

2.182.05

2.36 2.29

1.70

11/1/

93-94

11/1/

94-95

11/1/

95-96

11/1/

96-97

11/1/

97-98

11/1/

98-99

11/1/

99-00

11/1/

00-01

11/1/

01-02

11/1/

02-03

11/1/

03-04

11/1/

04-05

11/1/

05-06

11/1/

06-07

11/1/

07-08

0.00

1.00

2.00

3.00

4.00

5.00

6.00$ per $100 Payroll

Est Ult Losses Operating Expenses Premium

35

Table 13



LOSS RATIOS(Limited to Specific and Aggregate Retentions)

Permissible CombinedEstimated Loss Ratio Ratio

Paid Loss Incurred Ultimate (Funds ([Losses +Policy Ratio as Loss Ratio as Incurred Available/ Expenses]/Period of 10/31/09 of 10/31/09 Loss Ratio Claims) Premium)

4/1‐10/31/93 2.661 2.870 5.226 0.567 5.65911/1/93‐94 1.153 1.191 1.607 0.764 1.84411/1/94‐95 0.827 0.855 1.023 0.816 1.20811/1/95‐96 0.826 0.901 1.002 0.827 1.17411/1/96‐97 1.213 1.373 1.917 0.702 2.21511/1/97‐98 1.328 1.388 1.614 0.699 1.91511/1/98‐99 1.639 1.722 1.869 0.569 2.30011/1/99‐00 1.108 1.158 1.329 0.655 1.67411/1/00‐01 1.107 1.186 1.353 0.659 1.69411/1/01‐02 0.942 0.985 1.169 0.678 1.49011/1/02‐03 0.730 0.790 0.935 0.721 1.21411/1/03‐04 0.688 0.759 1.519 0.691 1.82811/1/04‐05 0.664 0.759 1.652 0.717 1.93511/1/05‐06 0.425 0.484 1.187 0.651 1.53611/1/06‐07 0.421 0.516 1.190 0.750 1.44011/1/07‐08 0.432 0.550 1.574 0.937 1.637

1.354 0.730 1.624

36

QUALIFICATIONS AND LIMITATIONS

The estimates contained in this report depend upon the following:

• The actuarial assumptions, quantitative analysis, and professional judgment expressed in this report.

• The reliability of loss experience and industry experience to serve as an indicator of future losses.

• The completeness and accuracy of data provided by NCA.

• The completeness and accuracy of the discussion of HCP’s excess insurance expressed in this report.

While estimates are shown for each year, the actual losses incurred for a particular year may be

lower or higher than the amounts shown. However, the amount shown for the total of all years is

expected to be reasonable.

The information used in this report should be reviewed for its consistency and accuracy with the

internal records of HCP. Material changes in any of the assumptions or information upon which

the findings are based will require a re-evaluation of the results of this report and a possible

revision of those findings.

The quantitative methodologies and actuarial factors used in this report are specifically

developed for the losses and time periods described above and may not be appropriate for any

other losses or periods.

37

This report is intended for the use of HCP and its auditors, service providers, and regulators. If

the report is released to any third party, it should be released in its entirety. Please advise

BYNAC if this report is distributed to any other third party.

38

CONSULTATION

The professional opinion given in this report is based on the judgment and experience of

BYNAC. An analysis by another actuary may not arrive at the same conclusion. In the event

that another actuary is consulted regarding the findings of this report, both actuaries should make

themselves available for supplemental advice and consultation.

39


APPENDIX A

INCURRED LOSSES $200,000 AND GREATER

40

Appendix A



INCURRED LOSSES $200,000 OR GREATER(Including ALAE)

Incurred PaidAccident Claim Accident as of as ofYear Number Date Status 10/31/09 5/31/10 10/31/09 5/31/10

4/1‐10/31/93 9/29/93 O $ 532,877 $ 1,379,253 $ 458,312 $ 482,733

11/1/93‐94 1/25/94 O $ 237,510 $ 309,185 $ 157,922 $ 162,3462/7/94 O 234,021 127,3123/25/94 O 220,484 118,2517/1/94 O 317,327 142,3819/12/94 O 489,229 191,03410/21/94 O 530,174 1,299,801 524,426 564,552

$ 767,684 $ 2,870,047 $ 682,348 $1,305,876

11/1/94‐95 12/7/94 O $ 217,809 $ 280,219 $ 164,279 $ 169,9591/18/95 O 217,224 94,8177/28/95 O 248,720 460,729 235,030 284,0828/4/95 O 257,152 151,2208/9/95 O 204,767 538,166 169,512 179,0739/1/95 O 201,449 97,4109/22/95 O 434,880 159,752

$ 671,296 $ 2,389,819 $ 568,821 $1,136,313

11/1/95‐96 1/1/96 O $ 317,240 $ 107,8741/10/96 O $ 573,900 579,682 $ 106,510 119,4341/26/96 O 200,391 319,279 172,959 179,0502/6/96 O 206,634 138,2712/23/96 C 219,597 219,597 219,597 219,5973/14/96 O 204,416 246,239 126,846 131,2134/15/96 O 290,197 507,597 247,634 290,9504/21/96 O 328,011 179,8837/27/96 O 244,758 151,458

$1,488,501 $ 2,969,037 $ 873,546 $1,517,730

11/1/96‐97 11/4/96 C $ 382,448 $ 385,220 $ 283,133 $ 385,2201/10/97 O 265,707 134,5312/5/97 O 379,296 759,406 289,246 310,2565/23/97 O 318,178 183,9315/27/97 O 262,490 594,640 255,648 389,4565/31/97 O 305,240 133,9907/10/97 O 390,861 390,861 175,559 183,9707/16/97 O 694,803 749,081 312,484 368,6777/19/97 O 244,136 571,051 192,877 203,7867/27/97 O 212,503 331,850 173,067 177,3047/29/97 O 268,844 642,416 228,075 236,5828/4/97 O 214,453 666,927 178,976 192,5669/16/97 O 439,843 191,8899/26/97 O 329,933 596,315 200,656 206,80310/8/97 O 251,719 675,811 218,700 275,27910/10/97 O 211,778 96,54610/13/97 O 206,856 90,377

$3,631,486 $ 8,111,180 $2,508,421 $3,761,163

41

Appendix A





11/1/97‐98 HCP003195 12/4/97 O $ 270,098 $ 564,498 $ 221,998 $ 231,058HCP003663 1/2/98 O 204,750 83,817HCP003283 1/3/98 O 326,572 157,898HCP003307 1/16/98 O 331,458 118,005HCP003482 1/31/98 O 213,798 111,195HCP003827 7/21/98 O 267,584 146,861HCP003859 7/30/98 O 302,999 133,061HCP004002 10/5/98 O 784,979 999,142 375,696 401,632HCP004273 10/13/98 O 309,284 132,108

$1,055,077 $ 3,520,085 $ 597,694 $1,515,635

11/1/98‐99 1/7/99 O $ 275,302 $ 102,1671/15/99 O 399,375 190,6253/2/99 O 334,435 159,6303/11/99 O 296,209 97,2083/16/99 O $ 317,754 324,371 $ 238,154 256,8984/4/99 O 254,538 151,0974/7/99 O 258,395 116,8474/9/99 O 227,486 108,7274/20/99 O 272,365 310,583 244,510 238,8355/25/99 O 620,590 763,437 420,604 431,4046/11/99 O 587,528 887,225 292,807 439,8776/11/99 O 301,749 103,6666/30/99 C 221,905 221,905 221,905 221,9059/18/99 O 251,968 83,30110/1/99 C 211,767 212,841 211,767 212,84110/13/99 O 202,770 75,26010/19/99 O 250,945 186,949

$2,231,909 $ 5,773,534 $1,629,747 $3,177,237

11/1/99‐00 1/17/00 O $ 464,190 $ 152,6642/5/00 O $ 213,574 363,668 $ 149,036 152,7513/13/00 O 213,305 219,805 213,305 215,3323/17/00 O 431,462 159,4073/27/00 O 297,581 97,8544/12/00 O 535,917 560,748 434,692 460,4355/2/00 C 220,552 220,552 220,552 220,5526/13/00 O 279,267 115,9798/4/00 O 274,485 831,186 246,009 260,8179/18/00 O 225,612 140,91010/10/00 O 216,287 681,863 208,658 240,88210/11/00 C 205,034 205,034 205,034 205,03410/17/00 O 282,457 524,315 160,567 166,777

$2,161,611 $ 5,305,283 $1,837,853 $2,589,394

11/1/00‐01 11/16/00 O $ 422,282 $ 120,80811/19/00 O $ 809,801 1,194,035 $ 495,587 606,45711/19/00 O 211,943 77,7921/25/01 O 219,735 103,0462/3/01 O 288,054 115,0132/8/01 O 424,124 110,5302/9/01 O 392,281 49,9382/16/01 O 231,040 50,9093/8/01 O 787,999 129,9663/8/01 O 376,555 340,854 210,444 338,6753/21/01 O 251,330 602,220 218,729 227,4973/29/01 O 203,620 391,832 171,260 179,0104/14/01 O 269,651 87,8644/17/01 O 262,782 132,4095/2/01 O 282,473 802,992 258,254 315,7925/22/01 O 201,800 340,371 169,075 212,7666/19/01 O 267,598 549,857 262,617 266,6496/19/01 O 208,286 63,9507/25/01 O 243,443 49,4248/5/01 O 434,711 182,6879/3/01 O 249,092 99,2259/23/01 O 384,388 133,489

$2,393,177 $ 9,251,972 $1,785,966 $3,653,896

42

Appendix A





11/1/01‐02 11/16/01 O $ 210,370 $ 102,16612/4/01 O $ 249,500 483,928 $ 209,304 214,56412/7/01 O 271,423 68,08312/10/01 O 246,511 80,97312/12/01 C 192,546 192,5461/4/02 O 348,978 143,9781/7/02 O 322,529 126,6781/25/02 O 470,879 153,6213/22/02 C 192,329 192,3293/28/02 O 311,165 86,6964/24/02 O 361,062 154,3794/30/02 O 577,169 143,7095/1/02 O 413,457 71,0085/4/02 C 155,859 155,8595/11/02 C 257,483 257,483 257,483 257,4835/24/02 O 309,850 79,0726/13/02 O 236,533 236,533 235,695 235,6957/5/02 C 309,286 309,286 309,286 309,2867/20/02 O 1,068,242 188,6418/8/02 O 252,195 97,4348/16/02 O 214,942 90,2278/23/02 O 251,123 79,53410/12/02 O 261,735 106,299

$1,052,802 $ 7,719,594 $1,011,768 $3,330,260

11/1/02‐03 12/6/02 C $ 373,526 $ 373,526 $ 373,526 $ 373,52612/11/02 C 223,592 223,592 223,592 223,59212/12/02 C 295,813 291,940 291,772 291,94012/12/02 O 305,172 91,70812/16/02 O 331,809 124,2381/6/03 O 256,752 103,1421/16/03 O 226,660 101,1481/22/03 O 214,338 304,204 91,132 102,7482/3/03 O 289,386 60,9702/7/03 O 209,099 75,8412/7/03 O 0 614,569 211,886 243,4883/31/03 O 224,622 335,893 213,051 228,1124/3/03 O 213,949 94,5714/5/03 O 246,278 75,8694/24/03 O 218,266 65,4945/1/03 O 273,843 131,4785/1/03 O 260,915 91,9235/13/03 O 237,192 74,0005/23/03 O 235,867 112,2175/26/03 O 433,203 107,6415/28/03 O 300,859 537,559 186,079 211,2325/30/03 O 252,136 108,7326/5/03 O 343,590 95,3817/16/03 O 257,906 951,076 157,341 169,9377/29/03 O 217,612 93,3368/15/03 O 382,877 97,1819/7/03 C 200,234 200,234 200,234 200,2349/15/03 C 213,737 217,780 213,737 217,78010/1/03 O 590,366 231,39310/9/03 O 517,050 172,81010/9/03 O 253,590 36,67410/28/03 O 390,306 87,306

$2,304,627 $10,736,291 $2,162,350 $4,495,642

43

Appendix A





11/1/03‐04 11/2/03 O $ 460,897 $ 107,09512/19/03 O 217,657 40,49612/22/03 O 379,393 111,10112/26/03 O 315,292 100,66112/26/03 O 470,047 160,91212/31/03 O 481,526 123,9281/5/04 O 330,650 82,5881/13/04 O 289,760 109,6722/23/04 O 938,294 170,6553/10/04 O 754,040 183,0463/15/04 O $ 261,178 1,083,031 $ 245,020 266,4003/21/04 O 219,081 67,5723/24/04 O 534,086 76,5134/5/04 O 527,027 134,6674/23/04 O 462,971 107,8345/10/04 O 307,300 87,1565/12/04 O 218,150 218,150 63,941 76,8395/13/04 O 283,022 54,7965/27/04 O 565,972 116,7526/2/04 O 313,860 115,9517/2/04 O 636,338 65,2507/2/04 O 241,971 96,0927/9/04 O 259,943 72,6697/15/04 O 212,824 100,1528/4/04 C 200,264 200,264 200,264 200,2649/5/04 O 580,007 104,1459/14/04 O 590,965 104,33310/6/04 O 288,400 615,426 166,042 182,23310/14/04 O 506,692 140,35810/22/04 O 387,877 58,376

$ 967,992 $13,384,363 $ 675,267 $3,418,506

11/1/04‐05 11/1/04 O $ 381,289 $ 178,00911/4/04 O 337,688 69,50911/11/04 O 269,026 83,93911/20/04 O 484,751 45,03412/23/04 O 789,595 157,01112/29/04 O 1,126,954 177,71012/31/04 O 215,509 39,4651/7/05 O 358,566 173,3021/8/05 O 212,090 108,9431/27/05 O $ 218,733 519,137 $ 117,116 130,8432/3/05 O 214,375 635,654 208,564 223,8562/4/05 O 232,695 85,4232/9/05 O 364,564 77,8182/15/05 O 222,159 73,1082/23/05 O 289,835 102,2002/25/05 O 297,797 42,2544/21/05 O 209,606 77,6334/25/05 O 338,317 129,0205/4/05 O 388,614 99,7075/6/05 O 308,442 45,2015/11/05 O 260,123 107,9595/12/05 O 255,243 51,4985/23/05 O 325,210 106,3416/16/05 O 262,011 61,7826/27/05 C 244,860 244,860 244,860 244,8607/9/05 O 902,600 100,1417/19/05 O 357,819 93,1388/2/05 O 850,040 137,0238/12/05 O 389,608 93,9978/24/05 O 660,577 166,9588/29/05 O 571,049 88,7989/9/05 O 491,342 84,8349/15/05 O 223,035 49,5869/19/05 O 255,210 113,0229/29/05 O 212,721 45,54310/11/05 O 305,030 104,476

$ 677,968 $14,548,766 $ 570,540 $3,769,941

44

Appendix A





11/1/05‐06 11/8/05 O $ 244,461 $ 36,76912/16/05 O 316,040 119,75112/20/05 O 657,533 88,87812/28/05 O 521,865 87,8311/9/06 O 342,146 89,1992/3/06 O $ 263,150 823,322 $ 134,822 152,9262/7/06 O 220,998 43,9592/16/06 O 389,197 109,7403/2/06 O 336,934 114,6113/8/06 O 809,024 142,1013/13/06 O 753,219 107,5683/20/06 O 357,615 116,1414/20/06 O 233,963 78,6964/26/06 O 257,394 233,9474/26/06 O 300,752 106,4835/4/06 O 252,026 480,183 129,530 262,8315/10/06 O 287,246 102,0645/29/06 O 378,002 78,4296/5/06 O 494,851 74,7806/6/06 O 650,400 184,6626/7/06 O 597,348 109,0916/13/06 O 370,120 101,3627/7/06 O 224,868 255,348 208,842 224,5759/18/06 O 351,221 64,5089/19/06 O 355,048 126,56310/9/06 O 296,489 55,12710/12/06 O 583,977 125,070

$ 740,044 $11,664,696 $ 473,194 $3,137,662

11/1/06‐07 11/3/06 O $ 313,122 $ 77,41711/30/06 O $ 981,762 981,762 $ 80,262 113,01211/21/06 O 677,711 107,22812/11/06 O 487,734 104,06712/28/06 O 359,349 30,1311/10/07 O 619,077 72,6321/18/07 O 453,938 79,84912/27/06 O 397,024 79,7391/24/07 O 401,646 80,3371/12/07 O 316,445 45,59012/30/06 O 365,581 101,8513/4/07 O 225,812 38,4612/14/07 O 295,003 146,4964/9/07 O 980,354 1,621,284 653,090 1,170,4614/12/07 O 285,769 99,1434/25/07 O 261,823 99,5994/5/07 O 513,186 101,9835/18/07 O 200,592 75,8167/1/07 O 205,675 25,2447/18/07 O 207,163 113,2776/19/07 O 246,483 74,0107/16/07 O 394,019 87,8858/22/07 O 224,187 79,3827/5/07 O 318,246 80,9928/23/07 O 217,958 79,0849/12/07 O 438,082 149,71710/30/07 O 256,623 29,194

$1,962,116 $11,285,294 $ 733,352 $3,342,597

45

Appendix A





11/1/07‐08 11/3/07 O $ 237,252 $ 132,99311/20/07 O 264,029 90,8962/23/08 O 308,076 150,2396/22/08 O 285,086 114,2788/9/08 O $ 436,718 366,020 $ 226,612 236,173

10/14/08 O 236,093 67,41610/17/08 O 345,083 162,88610/30/08 O 333,469 138,160

$ 436,718 $ 2,375,108 $ 226,612 $1,093,041

11/1/08‐09 11/10/08 O $ 213,751 $ 79,91611/17/08 O 212,065 74,73712/13/08 O 212,403 61,61712/18/08 O 203,898 56,2391/27/09 O 225,724 38,2324/10/09 O 217,598 40,1526/1/09 O 255,940 34,999

$ 0 $ 1,541,379 $ 0 $ 385,892

46


APPENDIX B

SUPPORT EXHIBITS

47

Appendix B, Exhibit I


EXPECTED LOSSES FOR BORNHUETTER‐FERGUSON METHODS(Limited to Specific Retention)

A. ADJUSTED LOSSES#

Estimated Benefit Factor toUltimate Level Loss Adjust to a

Policy Incurred Change Trend $600,000 AdjustedPeriod Losses> Factor* Factor< Retention Losses^

4/1‐10/31/93 $ 1,876,190 0.841 2.729 0.773 $ 3,328,55611/1/93‐94 5,751,234 0.848 2.583 0.773 9,737,79911/1/94‐95 7,718,763 0.844 2.488 0.773 12,529,10411/1/95‐96 9,743,963 0.842 2.346 0.773 14,878,36511/1/96‐97 15,087,575 0.867 2.163 0.773 21,871,29811/1/97‐98 8,728,964 0.862 1.990 1.360 18,364,90511/1/98‐99 11,154,188 0.862 1.807 1.360 20,691,68711/1/99‐00 10,025,598 0.862 1.657 1.360 17,832,41211/1/00‐01 14,583,554 0.862 1.496 1.360 23,649,97711/1/01‐02 15,900,007 0.862 1.407 1.263 23,381,11011/1/02‐03 20,598,452 0.862 1.334 1.134 26,317,79911/1/03‐04 22,987,198 0.862 1.286 1.055 26,170,46911/1/04‐05 26,474,686 0.862 1.229 1.000 27,828,42811/1/05‐06 23,833,169 0.862 1.170 1.000 24,008,63511/1/06‐07 24,752,712 0.997 1.112 1.000 27,181,64711/1/07‐08 25,734,491 1.014 1.049 1.000 27,373,41811/1/08‐09 19,136,923 1.000 1.000 1.000 19,136,923

Total $264,087,667 $344,282,532

B. EXPECTED LOSSESPure Loss Selected

Payroll Rate per Pure LossPolicy Trend Adjusted $100 Rate at ExpectedPeriod Payroll (100)~ Factor< Payroll (100)# Payroll Historical Level Losses

4/1‐10/31/93 $ 145,216 1.746 $ 253,547 $13.13 $ 2.85 $ 410,00011/1/93‐94 1,550,511 1.703 2,640,520 3.69 2.92 4,530,00011/1/94‐95 2,599,644 1.655 4,302,411 2.91 2.96 7,690,00011/1/95‐96 2,846,034 1.604 4,565,039 3.26 3.05 8,680,00011/1/96‐97 3,272,712 1.554 5,085,794 4.30 3.11 10,180,00011/1/97‐98 3,294,955 1.503 4,952,317 3.71 1.87 6,160,00011/1/98‐99 3,758,665 1.453 5,461,340 3.79 1.99 7,480,00011/1/99‐00 4,549,953 1.401 6,374,484 2.80 2.09 9,510,00011/1/00‐01 5,233,227 1.337 6,996,824 3.38 2.21 11,570,00011/1/01‐02 5,665,387 1.285 7,280,022 3.21 2.43 13,770,00011/1/02‐03 6,188,825 1.249 7,729,842 3.40 2.78 17,200,00011/1/03‐04 6,911,807 1.210 8,363,286 3.13 3.00 20,740,00011/1/04‐05 7,783,693 1.169 9,099,137 3.06 3.20 24,910,00011/1/05‐06 8,248,494 1.125 9,279,556 2.59 3.23 26,640,00011/1/06‐07 9,280,000 1.080 10,022,400 2.71 2.83 26,260,00011/1/07‐08 9,800,000 1.036 10,152,800 2.70 2.82 27,640,00011/1/08‐09 6,500,000 1.000 6,500,000 2.94 2.90 18,850,000

Total $87,629,123 $109,059,319 $242,220,000

Selected Pure Loss Rate+ $ 2.90

# 11/1/08‐09 level.> Based on average of incurred and paid devlopment methods. If paid method is less than incurred

losses, incurred method is selected.* Based on information for New York published by NCCI.< Based on Appendix B, Exhibit II.^ Losses are not adjusted above retention.~ From SGRisk Actuarial Report 10‐31‐08 ‐ most recent period estimated.+ Selected weighted average of 11/1/01‐02 through 11/1/08‐09.

48

Appendix B, Exhibit II


TREND FACTORS

A. LOSS TREND FACTOR

Indemnity Medical LossPolicy Indemnity Cost Trend Medical Cost Trend TrendPeriod Claim Index* Factor Claim Index* Factor Factor**

4/1‐10/31/93 95.2 2.394 105.9 3.231 2.72911/1/93‐94 99.1 2.300 113.8 3.007 2.58311/1/94‐95 101.3 2.250 120.3 2.845 2.48811/1/95‐96 106.6 2.138 128.8 2.657 2.34611/1/96‐97 114.5 1.990 141.3 2.422 2.16311/1/97‐98 124.6 1.829 153.4 2.231 1.99011/1/98‐99 137.0 1.664 169.2 2.022 1.80711/1/99‐00 150.8 1.511 182.3 1.877 1.65711/1/00‐01 164.9 1.382 205.2 1.668 1.49611/1/01‐02 171.5 1.329 224.6 1.524 1.40711/1/02‐03 178.3 1.278 241.5 1.417 1.33411/1/03‐04 182.1 1.252 255.7 1.338 1.28611/1/04‐05 187.4 1.216 273.9 1.249 1.22911/1/05‐06 196.1 1.162 289.6 1.182 1.17011/1/06‐07 206.0 1.106 305.3 1.121 1.11211/1/07‐08 217.6 1.047 325.1 1.053 1.04911/1/08‐09 227.9 1.000 342.2 1.000 1.000

B. PAYROLL TREND FACTOR

Average Hourly PayrollPolicy Wages for TrendPeriod Education and Health# Factor

4/1‐10/31/93 11.13 1.74611/1/93‐94 11.41 1.70311/1/94‐95 11.74 1.65511/1/95‐96 12.11 1.60411/1/96‐97 12.50 1.55411/1/97‐98 12.93 1.50311/1/98‐99 13.37 1.45311/1/99‐00 13.87 1.40111/1/00‐01 14.53 1.33711/1/01‐02 15.12 1.28511/1/02‐03 15.56 1.24911/1/03‐04 16.06 1.21011/1/04‐05 16.62 1.16911/1/05‐06 17.27 1.12511/1/06‐07 17.99 1.08011/1/07‐08 18.75 1.03611/1/08‐09 19.43 1.000

* Source: NCCI State of the Workers Compensation Line Presentation, May 6, 2010** Based on weighting of 60%/40% indemnity/medical based on HCP

historical experience.# Employment and Earnings . U.S. Department of Labor, Bureau of Labor Statistics.

49

Appendix B, Exhibit III



SELECTED ESTIMATED ULTIMATE INCURRED LOSSES(Unlimited Losses Including ALAE)

Estimated IncurredUltimate Losses Unlimited SelectedIncurred Limited to Incurred EstimatedLosses Spec. Ret. Losses Ultimate

Policy Limited to as of as of IncurredPeriod Spec. Ret. 5/31/10 5/31/10 Losses*

4/1‐10/31/93 $ 1,876,190 $ 1,876,190 $ 1,876,190 $ 1,876,19011/1/93‐94 5,751,234 5,751,234 5,751,234 5,751,23411/1/94‐95 7,718,763 7,718,763 7,718,763 7,718,76311/1/95‐96 9,742,411 9,714,819 9,714,819 9,742,41111/1/96‐97 15,063,784 14,938,193 14,938,193 15,063,78411/1/97‐98 8,706,105 8,566,206 9,917,743 10,079,71511/1/98‐99 11,101,731 10,839,833 12,498,365 12,800,33411/1/99‐00 10,187,442 9,791,618 11,975,898 12,460,02111/1/00‐01 14,494,074 13,745,103 17,633,536 18,594,38811/1/01‐02 15,814,852 14,600,557 16,277,102 17,630,83111/1/02‐03 20,408,239 18,326,025 19,569,848 21,793,38611/1/03‐04 22,831,889 19,731,500 21,563,378 24,951,60811/1/04‐05 26,333,330 21,807,814 23,173,234 27,982,09911/1/05‐06 23,122,258 18,619,663 19,313,161 23,983,45711/1/06‐07 25,253,581 20,445,314 21,945,148 27,106,14111/1/07‐08 26,228,363 16,449,007 16,449,007 26,228,36311/1/08‐09 19,058,360 9,977,941 9,977,941 19,058,360

Total $263,692,606 $222,899,780 $240,293,560 $282,821,085

* Estimated to equal the limited estimated ultimate incurred losses divided by the limited incurredlosses multiplied by the unlimited incurred losses.

50

Appendix B, Exhibit IV



ESTIMATED ULTIMATE CLAIMS AND AVERAGE SEVERITY(Unlimited Losses Including ALAE)

(Excluding Claims Closed without Payment)

A. ESTIMATED ULTIMATE CLAIMS WITH COST

Age of Industry EstimatedReported Policy Claim Count Ultimate

Policy Claims as Period in Development ClaimsPeriod 5/31/10 Months Factor with Cost

4/1‐10/31/93 46 209.5 1.000 4611/1/93‐94 400 199.0 1.000 40011/1/94‐95 582 187.0 1.000 58211/1/95‐96 713 175.0 1.000 71311/1/96‐97 774 163.0 1.000 77411/1/97‐98 722 151.0 1.000 72211/1/98‐99 813 139.0 1.000 81311/1/99‐00 878 127.0 1.000 87811/1/00‐01 886 115.0 1.000 88611/1/01‐02 799 103.0 1.000 79911/1/02‐03 912 91.0 1.000 91211/1/03‐04 866 79.0 1.000 86611/1/04‐05 880 67.0 1.001 88111/1/05‐06 867 55.0 1.002 86911/1/06‐07 916 43.0 1.003 91911/1/07‐08 930 31.0 1.006 93611/1/08‐09 666 21.0 1.025 683

Total 12,650 12,679

B. ESTIMATED ULTIMATE AVERAGE SEVERITY

Estimated Estimated EstimatedUltimate Ultimate Ultimate

Policy Incurred Claims AveragePeriod Losses with Cost Severity

4/1‐10/31/93 $ 1,876,190 46 $40,78711/1/93‐94 5,751,234 400 14,37811/1/94‐95 7,718,763 582 13,26211/1/95‐96 9,742,411 713 13,66411/1/96‐97 15,063,784 774 19,46211/1/97‐98 10,079,715 722 13,96111/1/98‐99 12,800,334 813 15,74511/1/99‐00 12,460,021 878 14,19111/1/00‐01 18,594,388 886 20,98711/1/01‐02 17,630,831 799 22,06611/1/02‐03 21,793,386 912 23,89611/1/03‐04 24,951,608 866 28,81211/1/04‐05 27,982,099 881 31,76211/1/05‐06 23,983,457 869 27,59911/1/06‐07 27,106,141 919 29,49511/1/07‐08 26,228,363 936 28,02211/1/08‐09 19,058,360 683 27,904

Total $282,821,085 12,679

51

Appendix B, Exhibit V



LOSS SUMMARY AS OF 5/31/10(Limited to Specific Retention)

A. UNLIMITED

Unlimited Unlimited UnlimitedIncurred Paid Case

Policy Losses as Losses as Reserves asPeriod of 5/31/10 of 5/31/10 of 5/31/10

4/1‐10/31/93 $ 1,876,190 $ 979,670 $ 896,52011/1/93‐94 5,751,234 4,187,063 1,564,17111/1/94‐95 7,718,763 6,326,624 1,392,13911/1/95‐96 9,714,819 8,133,926 1,580,89311/1/96‐97 14,938,193 10,048,740 4,889,45311/1/97‐98 9,917,743 7,339,917 2,577,82611/1/98‐99 12,498,365 9,547,147 2,951,21811/1/99‐00 11,975,898 8,711,192 3,264,70611/1/00‐01 17,633,536 11,429,679 6,203,85711/1/01‐02 16,277,102 11,198,133 5,078,96911/1/02‐03 19,569,848 12,455,841 7,114,00711/1/03‐04 21,563,378 10,683,523 10,879,85511/1/04‐05 23,173,234 11,198,052 11,975,18211/1/05‐06 19,313,161 9,393,189 9,919,97211/1/06‐07 21,945,148 10,967,425 10,977,72311/1/07‐08 16,449,007 9,410,744 7,038,26311/1/08‐09 9,977,941 4,532,253 5,445,688

Total $240,293,560 $146,543,118 $93,750,442

B. LIMITED TO SPECIFIC RETENTION

Limited Limited LimitedIncurred Paid Case

Policy Losses as Losses as Reserves asPeriod of 5/31/10 of 5/31/10 of 5/31/10

4/1‐10/31/93 $ 1,876,190 * $ 979,670 * $ 896,52011/1/93‐94 5,751,234 * 4,187,063 * 1,564,17111/1/94‐95 7,718,763 * 6,326,624 * 1,392,13911/1/95‐96 9,714,819 * 8,133,926 * 1,580,89311/1/96‐97 14,938,193 * 10,048,740 * 4,889,45311/1/97‐98 8,566,206 7,188,285 1,377,92111/1/98‐99 10,839,833 9,168,968 1,670,86511/1/99‐00 9,791,618 8,489,940 1,301,67811/1/00‐01 13,745,103 10,902,106 2,842,99711/1/01‐02 14,600,557 11,188,847 3,411,71011/1/02‐03 18,326,025 12,455,841 5,870,18411/1/03‐04 19,731,500 10,683,523 9,047,97711/1/04‐05 21,807,814 11,198,052 10,609,76211/1/05‐06 18,619,663 9,393,189 9,226,47411/1/06‐07 20,445,314 10,396,964 10,048,35011/1/07‐08 16,449,007 9,410,744 7,038,26311/1/08‐09 9,977,941 4,532,253 5,445,688

Total $222,899,780 $144,684,735 $78,215,045

* Did not limit to retention since policy is with Reliance and no recoveries are currently expected

52


APPENDIX C

ESTIMATED SPLIT AND ULAE RESERVES

53

Appendix C



ESTIMATED MEDICAL, INDEMNITY, ALAE, AND ULAE RESERVES(Limited to Specific and Aggregate Retentions)

A. ESTIMATED MEDICAL, INDEMNITY, AND ALAE RESERVES

Estimated Estimated Estimated EstimatedRequired Medical Indemnity ALAE

Policy Reserves as Reserves* Reserves* Reserves*Period of 10/31/09 40% 50% 10%

4/1‐10/31/93 $ 920,941 $ 368,376 $ 460,471 $ 92,09411/1/93‐94 1,627,090 650,836 813,545 162,70911/1/94‐95 1,478,521 591,408 739,261 147,85211/1/95‐96 1,711,192 684,477 855,596 171,11911/1/96‐97 5,525,933 2,210,373 2,762,967 552,59311/1/97‐98 1,543,283 617,313 771,642 154,32811/1/98‐99 1,263,862 505,545 631,931 126,38611/1/99‐00 1,671,018 668,407 835,509 167,10211/1/00‐01 2,360,332 944,133 1,180,166 236,03311/1/01‐02 2,648,870 1,059,548 1,324,435 264,88711/1/02‐03 3,379,730 1,351,892 1,689,865 337,97311/1/03‐04 12,490,999 4,996,400 6,245,500 1,249,09911/1/04‐05 15,750,779 6,300,312 7,875,390 1,575,07711/1/05‐06 14,842,847 5,937,139 7,421,424 1,484,28411/1/06‐07 16,313,366 6,525,346 8,156,683 1,631,33711/1/07‐08 19,024,906 7,609,962 9,512,453 1,902,49111/1/08‐09 16,574,799 6,629,920 8,287,400 1,657,479

Total $119,128,468 $47,651,387 $59,564,238 $11,912,843

B. ESTIMATED ULAE RESERVE

EstimatedRequired Estimated

Policy Reserves as Estimated ULAEPeriod of 10/31/09 ULAE Ratio# Reserve

Total $147,054,505 @ 0.065 $9,558,543

* Selected based on a review of the incurred losses.# Selected judgmentally.

@ Based on unlimited reserves. Equal to estimated ultimate unlimited losses fromAppendix B, Exhibit III minus unlimited paid losses as of 10/31/09.

54


APPENDIX D

ESTIMATED REQUIRED RESERVES AS OF 10/31/09 - HIGH

55

Appendix D, Exhibit I



SELECTED ESTIMATED ULTIMATE INCURRED LOSSES ‐ HIGH(Limited to Specific Retention)

SelectedEstimated

Incurred Incurred Paid UltimatePolicy Loss Paid Loss Bornhuetter‐ Bornhuetter‐ IncurredPeriod Development Development Ferguson Ferguson Losses^

4/1‐10/31/93 $ 1,876,190 $ 1,001,223 $ 1,876,190 $ 988,690 $ 1,913,71411/1/93‐94 5,751,234 4,316,862 5,751,234 4,322,963 5,895,01511/1/94‐95 7,718,763 6,604,995 7,718,763 6,649,604 7,950,32611/1/95‐96 9,743,963 8,638,229 9,740,859 8,637,366 10,083,39511/1/96‐97 15,087,575 10,892,834 15,039,993 10,832,600 15,666,33511/1/97‐98 8,728,964 7,950,243 8,683,246 7,779,645 9,097,88011/1/98‐99 11,154,188 10,360,934 11,049,273 10,029,168 11,656,81811/1/99‐00 10,202,866 9,848,330 10,172,018 9,802,320 10,747,75111/1/00‐01 14,583,554 13,049,821 14,404,593 12,811,156 15,363,71811/1/01‐02 15,900,007 13,907,737 15,729,697 13,873,997 16,842,81711/1/02‐03 20,598,452 16,242,417 20,218,025 16,463,441 20,598,45211/1/03‐04 22,987,198 14,796,679 22,676,580 16,449,243 24,544,28111/1/04‐05 26,474,686 16,875,464 26,191,974 19,567,812 28,439,99611/1/05‐06 23,833,169 15,968,421 24,453,823 20,368,869 24,453,82311/1/06‐07 28,337,205 21,168,219 27,745,594 23,763,304 28,337,20511/1/07‐08 26,022,329 25,446,652 26,620,527 26,823,944 26,823,94411/1/08‐09 19,247,448 19,026,398 19,063,641 18,895,953 20,964,196

Total $268,247,791 $216,095,458 $267,136,030 $228,060,075 $279,379,667

^ Equal to the maximum of the four methods for 11/1/02‐03 and 11/1/05‐06 through 11/1/07‐08;and a selected range of + 2.0%, 2.5%, 3.0%, 3.5%, 4.0%, 4.5%, 5.0%, 5.5%, 6.0%, 6.50%7.5%, 8.0%, and 10.0% for the remaining periods, respectively.

56

Appendix D, Exhibit II



LOSSES LIMITED TO AGGREGATE RETENTION ‐ HIGH(Limited to Specific Retention)

A. ULTIMATE LOSSES ASSIGNED TO AGGREGATE POLICY PERIODS

Selected SelectedEstimated Limited Limited EstimatedUltimate Incurred Incurred Ultimate

Policy Incurred Losses as Policy Losses as IncurredPeriod Losses^ of 5/31/10 Period of 5/31/10 Losses*

4/1‐10/31/93 $ 1,913,714 $ 1,876,190 4/1‐10/30/93 $ 1,876,190 $ 1,913,71411/1/93‐94 5,895,015 5,751,234 10/31/93‐94 5,750,991 5,894,76611/1/94‐95 7,950,326 7,718,763 10/31/94‐95 7,708,239 7,939,48611/1/95‐96 10,083,395 9,714,819 10/31/95‐96 9,551,528 9,913,90911/1/96‐97 15,666,335 14,938,193 10/31/96‐97 15,109,506 15,845,99911/1/97‐98 9,097,880 8,566,206 10/31/97‐98 8,568,950 9,100,79411/1/98‐99 11,656,818 10,839,833 10/31/98‐99 10,834,960 11,651,57711/1/99‐00 10,747,751 9,791,618 10/31/99‐00 9,793,963 10,750,32511/1/00‐01 15,363,718 13,745,103 10/31/00‐01 13,729,866 15,346,68711/1/01‐02 16,842,817 14,600,557 10/31/01‐02 14,618,323 16,863,31211/1/02‐03 20,598,452 18,326,025 10/31/02‐03 18,325,837 20,598,24111/1/03‐04 24,544,281 19,731,500 10/31/03‐04 19,731,688 24,544,51511/1/04‐05 28,439,996 21,807,814 10/31/04‐05 21,792,749 28,420,35011/1/05‐06 24,453,823 18,619,663 10/31/05‐06 18,634,729 24,473,61011/1/06‐07 28,337,205 20,445,314 10/31/06‐07 20,445,060 28,336,85311/1/07‐08 26,823,944 16,449,007 10/31/07‐08 16,431,109 26,794,75711/1/08‐09 20,964,196 9,977,941 10/31/08‐10/31/09 9,996,092 20,990,772

Total $279,379,667 $222,899,780 Total $222,899,780 $279,379,667

B. APPLICATION OF AGGREGATE

Selected LimitedEstimated EstimatedUltimate Ultimate

Policy Incurred Excess Policy IncurredPeriod Losses Aggregate Aggregate Period Losses#

10/31/97‐98 $ 9,100,794 $10,362,633 $ 0 11/1/97‐98 $ 9,097,88010/31/98‐99 11,651,577 10,261,155 1,390,422 11/1/98‐99 10,266,39610/31/99‐00 10,750,325 10,055,395 694,930 11/1/99‐00 10,052,82110/31/00‐01 15,346,687 12,978,402 2,368,285 11/1/00‐01 12,995,43310/31/01‐02 16,863,312 13,653,582 3,209,730 11/1/01‐02 13,633,08710/31/02‐03 20,598,241 14,915,069 5,000,000 11/1/02‐03 15,598,452

Total $84,310,936 $12,663,367 $71,644,069

^ From Appendix D, Exhibit I.* Based on the relationship between the selected ultimate losses and incurred losses for the matching period.# Equal to the selected ultimate losses minus the excess aggregate amount for the matching period.

57

Appendix D, Exhibit III



ESTIMATED REQUIRED RESERVES AS OF 10/31/09 ‐ HIGH(Limited to Specific and Aggregate Retentions)

A. LOSS SUMMARY ‐ HIGH


Policy Incurred Losses as Losses asPeriod Losses of 10/31/09 of 10/31/09

4/1‐10/31/93 $ 1,913,714 $ 1,030,114 $ 955,24911/1/93‐94 5,895,015 4,260,719 4,124,14411/1/94‐95 7,950,326 6,445,678 6,240,24211/1/95‐96 10,083,395 8,765,174 8,031,21911/1/96‐97 15,666,335 10,793,244 9,537,85111/1/97‐98 9,097,880 7,487,245 7,162,82211/1/98‐99 10,266,396 9,457,333 9,002,28411/1/99‐00 10,052,821 8,757,642 8,381,93711/1/00‐01 12,995,433 11,392,574 10,634,13711/1/01‐02 13,633,087 11,488,675 10,985,46811/1/02‐03 15,598,452 13,013,608 12,028,50911/1/03‐04 24,544,281 11,407,820 10,340,89011/1/04‐05 28,439,996 12,090,431 10,582,55111/1/05‐06 24,453,823 9,426,016 8,279,41111/1/06‐07 28,337,205 10,953,688 8,940,21511/1/07‐08 26,823,944 9,163,907 7,203,45711/1/08‐09 20,964,196 4,250,611 2,483,561

Total $266,716,300 $150,184,479 $134,913,947

B. ESTIMATED REQUIRED RESERVES AS OF 10/31/09 ‐ HIGH



4/1‐10/31/93 $ 74,865 $ 883,600 $ 958,46511/1/93‐94 136,575 1,634,296 1,770,87111/1/94‐95 205,436 1,504,648 1,710,08411/1/95‐96 733,955 1,318,221 2,052,17611/1/96‐97 1,255,393 4,873,091 6,128,48411/1/97‐98 324,423 1,610,635 1,935,05811/1/98‐99 455,049 809,063 1,264,11211/1/99‐00 375,705 1,295,179 1,670,88411/1/00‐01 758,437 1,602,859 2,361,29611/1/01‐02 503,207 2,144,412 2,647,61911/1/02‐03 985,099 2,584,844 3,569,94311/1/03‐04 1,066,930 13,136,461 14,203,39111/1/04‐05 1,507,880 16,349,565 17,857,44511/1/05‐06 1,146,605 15,027,807 16,174,41211/1/06‐07 2,013,473 17,383,517 19,396,99011/1/07‐08 1,960,450 17,660,037 19,620,48711/1/08‐09 1,767,050 16,713,585 18,480,635

Total $15,270,532 $116,531,821 $131,802,353

58

Appendix D, Exhibit IV



SELECTED ESTIMATED ULTIMATE INCURRED LOSSES ‐ HIGH(Unlimited Losses Including ALAE)

Estimated IncurredUltimate Losses Unlimited SelectedIncurred Limited to Incurred EstimatedLosses Spec. Ret. Losses Ultimate

Policy Limited to as of as of IncurredPeriod Spec. Ret. 5/31/10 5/31/10 Losses*

4/1‐10/31/93 $ 1,913,714 $ 1,876,190 $ 1,876,190 $ 1,913,71411/1/93‐94 5,895,015 5,751,234 5,751,234 5,895,01511/1/94‐95 7,950,326 7,718,763 7,718,763 7,950,32611/1/95‐96 10,083,395 9,714,819 9,714,819 10,083,39511/1/96‐97 15,666,335 14,938,193 14,938,193 15,666,33511/1/97‐98 9,097,880 8,566,206 9,917,743 10,533,30211/1/98‐99 11,656,818 10,839,833 12,498,365 13,440,35111/1/99‐00 10,747,751 9,791,618 11,975,898 13,145,32211/1/00‐01 15,363,718 13,745,103 17,633,536 19,710,05111/1/01‐02 16,842,817 14,600,557 16,277,102 18,776,83511/1/02‐03 20,598,452 18,326,025 19,569,848 21,996,50911/1/03‐04 24,544,281 19,731,500 21,563,378 26,822,97911/1/04‐05 28,439,996 21,807,814 23,173,234 30,220,66711/1/05‐06 24,453,823 18,619,663 19,313,161 25,364,61711/1/06‐07 28,337,205 20,445,314 21,945,148 30,415,97511/1/07‐08 26,823,944 16,449,007 16,449,007 26,823,94411/1/08‐09 20,964,196 9,977,941 9,977,941 20,964,196

Total $279,379,667 $222,899,780 $240,293,560 $299,723,533

* Estimated to equal the limited estimated ultimate incurred losses divided by the limited incurrelosses multiplied by the unlimited incurred losses

59

Appendix D, Exhibit V



ESTIMATED MEDICAL, INDEMNITY, ALAE, AND ULAE RESERVES ‐ HIGH(Limited to Specific and Aggregate Retentions)

A. ESTIMATED MEDICAL, INDEMNITY, AND ALAE RESERVES

Estimated Estimated Estimated EstimatedRequired Medical Indemnity ALAE

Policy Reserves as Reserves* Reserves* Reserves*Period of 10/31/09 40% 50% 10%

4/1‐10/31/93 $ 958,465 $ 383,386 $ 479,232 $ 95,84711/1/93‐94 1,770,871 708,348 885,435 177,08811/1/94‐95 1,710,084 684,034 855,042 171,00811/1/95‐96 2,052,176 820,871 1,026,088 205,21711/1/96‐97 6,128,484 2,451,394 3,064,242 612,84811/1/97‐98 1,935,058 774,023 967,529 193,50611/1/98‐99 1,264,112 505,645 632,056 126,41111/1/99‐00 1,670,884 668,354 835,442 167,08811/1/00‐01 2,361,296 944,519 1,180,648 236,12911/1/01‐02 2,647,619 1,059,048 1,323,810 264,76111/1/02‐03 3,569,943 1,427,977 1,784,972 356,99411/1/03‐04 14,203,391 5,681,356 7,101,695 1,420,34011/1/04‐05 17,857,445 7,142,978 8,928,723 1,785,74411/1/05‐06 16,174,412 6,469,765 8,087,206 1,617,44111/1/06‐07 19,396,990 7,758,796 9,698,495 1,939,69911/1/07‐08 19,620,487 7,848,195 9,810,244 1,962,04811/1/08‐09 18,480,635 7,392,254 9,240,318 1,848,063

Total $131,802,353 $52,720,943 $65,901,177 $13,180,233

B. ESTIMATED ULAE RESERVE

EstimatedRequired Estimated

Policy Reserves as Estimated ULAEPeriod of 10/31/09 ULAE Ratio# Reserve

Total $163,956,953 @ 0.065 $10,657,202

* Selected based on a review of the incurred losses# Selected judgmentally.

@ Based on unlimited reserves at the high level. Equal to estimated unlimited loss at high level fromAppendix D, Exhibit IV minus unlimited paid losses as of 10/31/09

60

Appendix D, Exhibit VI



ESTIMATED REQUIRED RESERVES AS OF 10/31/09 ‐ HIGH(Unlimited Losses Including ALAE)



Policy Incurred Losses as Losses asPeriod Losses* of 10/31/09 of 10/31/09

4/1‐10/31/93 $ 1,913,714 $ 1,030,114 $ 955,24911/1/93‐94 5,895,015 4,260,719 4,124,14411/1/94‐95 7,950,326 6,445,678 6,240,24211/1/95‐96 10,083,395 8,765,174 8,031,21911/1/96‐97 15,666,335 10,793,244 9,537,85111/1/97‐98 10,533,302 8,042,322 7,288,51811/1/98‐99 13,440,351 10,255,570 9,215,69511/1/99‐00 13,145,322 9,100,501 8,566,62911/1/00‐01 19,710,051 12,130,331 10,900,59511/1/01‐02 18,776,835 11,497,961 10,994,75411/1/02‐03 21,996,509 13,013,608 12,028,50911/1/03‐04 26,822,979 11,407,820 10,340,89011/1/04‐05 30,220,667 12,090,431 10,582,55111/1/05‐06 25,364,617 9,426,016 8,279,41111/1/06‐07 30,415,975 11,715,804 8,993,30511/1/07‐08 26,823,944 9,163,907 7,203,45711/1/08‐09 20,964,196 4,250,611 2,483,561

Total $299,723,533 $153,389,811 $135,766,580




4/1‐10/31/93 $ 74,865 $ 883,600 $ 958,46511/1/93‐94 136,575 1,634,296 1,770,87111/1/94‐95 205,436 1,504,648 1,710,08411/1/95‐96 733,955 1,318,221 2,052,17611/1/96‐97 1,255,393 4,873,091 6,128,48411/1/97‐98 753,804 2,490,980 3,244,78411/1/98‐99 1,039,875 3,184,781 4,224,65611/1/99‐00 533,872 4,044,821 4,578,69311/1/00‐01 1,229,736 7,579,720 8,809,45611/1/01‐02 503,207 7,278,874 7,782,08111/1/02‐03 985,099 8,982,901 9,968,00011/1/03‐04 1,066,930 15,415,159 16,482,08911/1/04‐05 1,507,880 18,130,236 19,638,11611/1/05‐06 1,146,605 15,938,601 17,085,20611/1/06‐07 2,722,499 18,700,171 21,422,67011/1/07‐08 1,960,450 17,660,037 19,620,48711/1/08‐09 1,767,050 16,713,585 18,480,635

Total $17,623,231 $146,333,722 $163,956,953

* From Appendix D, Exhibit IV.

61

Appendix D, Exhibit VII



ESTIMATED REQUIRED RESERVES AS OF 10/31/09 ‐ HIGH(Limited to Specific Retention)



Policy Incurred Losses as Losses asPeriod Losses* of 10/31/09 of 10/31/09

4/1‐10/31/93 $ 1,913,714 $ 1,030,114 $ 955,24911/1/93‐94 5,895,015 4,260,719 4,124,14411/1/94‐95 7,950,326 6,445,678 6,240,24211/1/95‐96 10,083,395 8,765,174 8,031,21911/1/96‐97 15,666,335 10,793,244 9,537,85111/1/97‐98 9,097,880 7,487,245 7,162,82211/1/98‐99 11,656,818 9,457,333 9,002,28411/1/99‐00 10,747,751 8,757,642 8,381,93711/1/00‐01 15,363,718 11,392,574 10,634,13711/1/01‐02 16,842,817 11,488,675 10,985,46811/1/02‐03 20,598,452 13,013,608 12,028,50911/1/03‐04 24,544,281 11,407,820 10,340,89011/1/04‐05 28,439,996 12,090,431 10,582,55111/1/05‐06 24,453,823 9,426,016 8,279,41111/1/06‐07 28,337,205 10,953,688 8,940,21511/1/07‐08 26,823,944 9,163,907 7,203,45711/1/08‐09 20,964,196 4,250,611 2,483,561

Total $279,379,667 $150,184,479 $134,913,947




4/1‐10/31/93 $ 74,865 $ 883,600 $ 958,46511/1/93‐94 136,575 1,634,296 1,770,87111/1/94‐95 205,436 1,504,648 1,710,08411/1/95‐96 733,955 1,318,221 2,052,17611/1/96‐97 1,255,393 4,873,091 6,128,48411/1/97‐98 324,423 1,610,635 1,935,05811/1/98‐99 455,049 2,199,485 2,654,53411/1/99‐00 375,705 1,990,109 2,365,81411/1/00‐01 758,437 3,971,144 4,729,58111/1/01‐02 503,207 5,354,142 5,857,34911/1/02‐03 985,099 7,584,844 8,569,94311/1/03‐04 1,066,930 13,136,461 14,203,39111/1/04‐05 1,507,880 16,349,565 17,857,44511/1/05‐06 1,146,605 15,027,807 16,174,41211/1/06‐07 2,013,473 17,383,517 19,396,99011/1/07‐08 1,960,450 17,660,037 19,620,48711/1/08‐09 1,767,050 16,713,585 18,480,635

Total $15,270,532 $129,195,188 $144,465,720

* From Appendix D, Exhibit I.

62


APPENDIX E

COMPARISON TO PRIOR ACTUARIAL REPORTS

63

Appendix E



COMPARISON TO PRIOR ACTUARIAL REPORTS(Limited to Specific and Aggregate Retentions)

AccidentYear 10/31/01* 10/31/02* 10/31/03* 10/31/04* 10/31/05* 10/31/06* 10/31/07* 10/31/08* 10/31/09

4/1‐10/31/93 857,707 830,173 743,492 772,682 762,553 756,025 752,796 751,320 1,876,19011/1/93‐94 4,135,377 4,129,725 4,076,576 4,037,170 4,005,124 3,985,984 3,988,706 4,002,500 5,751,23411/1/94‐95 6,284,525 6,288,194 6,050,589 6,252,837 6,290,306 6,305,402 6,299,422 6,315,957 7,718,76311/1/95‐96 8,647,903 8,554,455 8,058,269 8,154,298 8,087,974 8,066,375 8,077,612 8,158,643 9,742,41111/1/96‐97 8,564,896 8,890,554 8,793,660 8,969,866 9,265,695 9,394,073 9,568,624 9,765,974 15,063,78411/1/97‐98 7,128,545 7,193,390 7,279,812 7,399,067 7,453,305 7,381,939 7,375,781 7,487,655 8,706,10511/1/98‐99 7,080,377 7,740,186 8,404,218 8,439,511 8,598,631 8,848,689 9,149,061 9,407,043 10,266,14611/1/99‐00 8,140,186 8,408,733 8,386,749 8,695,728 8,992,651 8,968,007 8,926,159 9,087,718 10,052,95511/1/00‐01 9,046,377 9,504,197 9,933,059 10,449,302 10,677,185 10,729,298 10,879,994 11,452,437 12,994,46911/1/01‐02 11,063,715 10,990,689 10,890,661 11,259,237 11,449,939 11,606,213 12,047,049 13,634,33811/1/02‐03 13,253,187 12,535,483 12,649,242 13,069,490 13,253,173 13,636,104 15,408,23911/1/03‐04 12,363,141 11,873,474 11,761,230 12,025,598 12,648,347 22,831,88911/1/04‐05 12,491,915 12,567,371 13,066,619 13,848,669 26,333,33011/1/05‐06 12,613,859 12,133,520 12,712,068 23,122,25811/1/06‐07 14,640,572 15,212,081 25,253,58111/1/07‐08 14,431,444 26,228,36311/1/08‐09 19,058,360

Total 59,885,893 72,603,322 85,970,300 98,959,746 112,407,292 125,897,681 141,743,850 160,965,009 254,042,415

10/31/01* 10/31/02* 10/31/03* 10/31/04* 10/31/05* 10/31/06* 10/31/07* 10/31/08* 10/31/01*Accident to to to to to to to to toYear 10/31/02* 10/31/03* 10/31/04* 10/31/05* 10/31/06* 10/31/07* 10/31/08* 10/31/09 10/31/09

4/1‐10/31/93 ( 27,534) ( 86,681) 29,190 ( 10,129) ( 6,528) ( 3,229) ( 1,476) 1,124,870 1,018,48311/1/93‐94 ( 5,652) ( 53,149) ( 39,406) ( 32,046) ( 19,140) 2,722 13,794 1,748,734 1,615,85711/1/94‐95 3,669 (237,605) 202,248 37,469 15,096 ( 5,980) 16,535 1,402,806 1,434,23811/1/95‐96 ( 93,448) (496,186) 96,029 ( 66,324) ( 21,599) 11,237 81,031 1,583,768 1,094,50811/1/96‐97 325,658 ( 96,894) 176,206 295,829 128,378 174,551 197,350 5,297,810 6,498,88811/1/97‐98 64,845 86,422 119,255 54,238 ( 71,366) ( 6,158) 111,874 1,218,450 1,577,56011/1/98‐99 659,809 664,032 35,293 159,120 250,058 300,372 257,982 859,103 3,185,76911/1/99‐00 268,547 ( 21,984) 308,979 296,923 ( 24,644) ( 41,848) 161,559 965,237 1,912,76911/1/00‐01 457,820 428,862 516,243 227,883 52,113 150,696 572,443 1,542,032 3,948,09211/1/01‐02 ( 73,026) (100,028) 368,576 190,702 156,274 440,836 1,587,289 2,570,62311/1/02‐03 (717,704) 113,759 420,248 183,683 382,931 1,772,135 2,155,05211/1/03‐04 (489,667) (112,244) 264,368 622,749 10,183,542 10,468,74811/1/04‐05 75,456 499,248 782,050 12,484,661 13,841,41511/1/05‐06 (480,339) 578,548 10,410,190 10,508,39911/1/06‐07 571,509 10,041,500 10,613,00911/1/07‐08 11,796,919 11,796,919

Total 1,653,714 113,791 626,305 955,631 876,530 1,205,597 4,789,715 74,019,046 84,240,329

* SGRisk actuarial report.

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