R L Captive Solutions

1. R L Captive Solutions Cost Control Presentation by Travis Lantis R L Consulting, LLC.

2. What is a Rent-a-Captive? Where a sponsor (Captive Insurance Company) will rent its license & capacity for a fee to other alternative risk participants One of the leading insurance alternatives today Can be used as part of an overall risk management strategy to help reduce the cost of commercial insurance by avoiding administrative overhead and capturing underwriting profits and investment income • R L Consulting, LLC.

3. What are the Benefits? Long term control of insurance cost Controlling the claims process Direct access to reinsurance markets Better tailor your risk management needs • R L Consulting, LLC.

4. Your Partners R L Consulting KPMG International Sitnal Insurance International Advisory Services (IAS) Gallagher Bassett Sparta Insurence Your Partners • R L Consulting, Inc.

5. KPMG International Global Leader in Audits and Accounting Audit $4.72 billion Tax (Legal) $3.31 billion Advisory Services $2.96 billion Total $12.16 billion Up 13.4% from 2002-2003 • R L Consulting, LLC.

6. IAS International Advisory services LTD . IAS Was Formed in 1981 Over 180 Insurance Companies Under Management Over $4 billion in annual written premium Over $7 billion in invested assets The World’s Largest Independent Insurance Management Company • R L Consulting, LLC.

7. Fronting & Reinsurance Sparta Insurance Unbundled Alternative Risk Transfer A- (Excellent) rating from A.M. Best Fronting Reinsurance Underwriting Expertise Technology Platform • R L Consulting, LLC.

8. Other Partners Who Consultant – Broker Fronting Carrier Third Party Administrator Reinsurance Partners Captive Managing Firm CPA & Actuarial Firm Outside Legal Firms Bank & Investment Firm What Experience and Resources Required Provides Certificate of Insurance Claims Management To Take Excess Risk Day to Day Accounting Regulatory Compliance Audits Captive & Domicile Corporate Document Banking and Investments • R L Consulting, LLC.

9. Importance of our Captive Insurance Premium Stability Greater Flexibility & Risk Management Control Completely Funded Program Built in Risk Management Programs Priorities at work • R L Consulting, LLC.

10. Disadvantages Capital Requirements to assume deductible responsibilities Obligation of claims management • R L Consulting, LLC.

11. Underwriting Profit Insurance Premium 15% Profit 55% Expected Losses 40% Actual Losses 40% Expenses 40% Expenses 5% Taxes 5% Taxes Insurance Profit Center Conventional Insurance • R L Consulting, LLC.

12. Facts Work Comp Premiums up 50% in the last three years 10 to 30% of Work Comp Claims in the Commercial Market Place are Fraudulent Risk Management Liability 2003 $233 Billion Industry Wide was spent on Claims & Lawsuits Up 27.4 Billion from 2002 Risk Management A good risk management program will reduce the above affect Provided by Tillinghast Accounting & Actuarial Firm • R L Consulting, LLC.

13. Lines of Coverage General Liability Workers Compensation Directors and Officers Professional Liability • R L Consulting, LLC.

14. Learn This Lesson Nothing is a sure thing Segregated Cells – A Must Do not jump from carrier to carrier Stay on top of your loss control Risk Management is Key We will provide a comprehensive RISK MANAGEMENT program for you. • R L Consulting, LLC.

15. Premium WC Loss reserve fund $2,320,000 Capital $ 580,000 Expenses $ 2.1 million Total funding $ 5.0 million Large Ded. $ 100,000 per claim Aggregate $ 2.9 million Liability - Case Study • R L Consulting, LLC.

16. Results WC Claims Paid -$ 880,000 Loss Reserve -$ 672,000 IBNR Reserve -$ 448,000 Reinsurance -$ 750,000 Fronting Co. -$ 900,000 Expenses -$ 1,150,000 Total -$ 4,800,000 Underwriting Profits $ 200,000 Results Liability Study • R L Consulting, LLC.

17. Long Term Care WC Study 2000 Mod rate 1.36 $12,000,000 Payroll $1,020,000 Premium $367,200 Mod Calculation $1,387,200 Including Mod Long Term Care WC Study • R L Consulting, LLC.

18. Long Term Care WC Study 2005 Mod rate .69 Implementation of our Risk Mgmt. program $14,000,000 Payroll $1,190,000 Premium -$368,900 Mod $821,100 With Mod Calculation Long Term Care WC Study • R L Consulting, LLC.

19. Dividends The first date a possible disbursement will be considered is 36 months after each policy effective date Based on underwriting and loss reserves Disbursements are subject to board approval One disbursement per year will be considered Option to reinvest to lower premiums Underwriting Profits • R L Consulting, LLC.

20. End of the Day Identify your opportunities, assess the risks and qualify the return Make sure your loss control is in place Have a good idea as to the function and probable structure Find and employ excellent partners Manage the big picture while understanding the details. Have fun • R L Consulting, LLC.

21. R L Consulting Team We bring a host of personnel to the table to make this a one stop shopping for your insurance solution. The professionals we are partnered with bring a wealth of experience to you and are entrenched in the captive marketplace. Let ReRide be the solution for you! • R L Consulting, LLC.

22. The Next Step Complete a Comprehensive analysis to determine if you qualify for this Risk Management Strategy? We will Require : 5 years loss runs (valued within 3 months of policy inception) Audited Financial Statements last 2 years Details of Large Claims over $25,000 Historical and prospective exposure information Risk Management Program Information Should you qualify-more information will be required at that time • R L Consulting, LLC.