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The Solution - RepSync

Arthur J. Gallagher & Co. (AJG: NYSE) now provides RRADA Members with an E&O insurance policy, which is offered by Lloyds of London (A+ rated institution). . The Solution - RepSync. A True Solution To Your E&O Frustrations A Winning Combination!. DEFENSE. INDEMNITY. RepSync.

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The Solution - RepSync

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  1. Arthur J. Gallagher & Co. (AJG: NYSE) now provides RRADA Members with an E&O insurance policy, which is offered by Lloyds of London (A+ rated institution). The Solution - RepSync

  2. A True Solution To Your E&O FrustrationsA Winning Combination! DEFENSE INDEMNITY RepSync A True Solution to your E&O frustration

  3. Introduction to Arthur J. Gallagher and RRADAWho are we? RRADA Arthur J. Gallagher • Formed by financial professionals • Resource to B/D’s and RR’s • Provide legal services for the defense of customer arbitrations paid for by RRADA • Unlimited telephone consultations with experienced securities attorneys • Periodic industry updates • Referrals to experienced securities attorneys providing a minimum 20% discount for legal services • Dedicated RepSync Team in U.S. and London • 20+ years of experience assisting Broker Dealers • 8,500 Employees Worldwide • NYSE Traded (AJG) • 3rd largest Insurance Broker in the United States • Consistency in Staff and Client Service

  4. RepSync ProgramHave you asked yourself the following questions ? • Is your deductible $25,000, $50,000, $75,000, or $100,000 per claim? • Are your brokers contractually obligated to indemnify the BD for the deductible in a customer claim? • Do you have sufficient net capital to pay multiple E&O deductibles from customer arbitrations without an adverse impact on your net capital? • Does your E&O policy allow you to choose your defense attorney for a customer arbitration? • Does your E&O policy provide you with free telephone consultations with experienced securities attorneys for industry related, general business questions? • Is your present E&O carrier eager to cover you when you have a customer claim or does it always find a reason to avoid paying?

  5. RepSync – Your E&O Solution Coverage Highlights • Unlimited Defense Coverage for Customer Arbitrations • Coverage applies to both the B/D and the RR or separately • Competitive rates • Can provide no deductible* • No exclusions limiting your defense coverage • Defense for Investment Banking and other activities included • Settlements and Judgments are insured, protecting the capital base of the B/D • Prior acts coverage may be provided • Choice of counsel provided** • Backed by Lloyds of London A+ Rated insurer • Regulatory updates • Free Telephone consultations with securities attorneys • And more…………………. *Customer Arbitrations only while a member of RRADA **Attorney approved by RRADA

  6. Compare TRADITIONAL E&O INSURANCE POLICY RepSync E&O Program “RepSync Policy” • High Deductibles: $50,000 - $100,000 per claim. • Issues of Net Capital for the B/D for Deductible payments. • Numerous product exclusions. • Dollar caps on coverage. • High premiums coupled with limited coverage. • No choice of counsel. • Unlimited Defense Coverage for Customer Arbitrations • Coverage applies to both the B/D and the RR or separately • Competitive rates • Can provide no deductible* • No exclusions limiting your defense coverage • Defense for Investment Banking and other activities included • Settlements and Judgments are insured, protecting the capital base of the B/D • Prior acts coverage may be provided • Choice of counsel provided** • Backed by Lloyds of London A+ Rated insurer • Regulatory updates • Free Telephone consultations with securities attorneys • And more…………………. *For customer arbitrations arising from securities transactions while a member of RRADA

  7. Traditional E&O Indemnity Policy Example: A customer files an arbitration naming your firm and Registered Representative. The Arbitration Panel awards the customer $100,000. Your firm has a $50,000 deductible on the E&O Indemnity Policy. If the legal fees are $50,000 your firm is required to pay $50,000. E&O Indemnity Policies other than the RepSync Program will not eliminate your $50,000 deductible because the E&O insurance carrier has to pay the legal defense fees since RRADA is not involved. Traditional E&O Indemnity Policy Result: In this case your firm is responsible for the $50,000 deductible

  8. Savings with the RepSync Program Example: A customer files an arbitration naming your firm and Registered Representative. The Arbitration Panel awards the customer $100,000. Your firm has a $50,000 deductible on the E&O Indemnity Policy. If the legal fees are $50,000 to defend the case your deductible is satisfied in full. RepSync • RRADA pays for your defense coverage for the purchase of securities, while a member and 6 months prior to becoming a member. • Your E&O Indemnity Policy deductible is reduced by what RRADA pays towards your defense coverage Result: In this case your deductible is zero*. *E&O Indemnity Policies other than the RepSync Program will not eliminate your $50,000 deductible because the E&O insurance carrier has to pay the legal defense fees since RRADA is not involved.

  9. What is required to quote Application for indemnity portion of RepSync program Copies of your Form BD, ADV and most recent year end financials Copy of Current E&O policy form and endorsements List of NY registered and domiciled RR’s RRADA Broker Dealer Application

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