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

2. What is a Rent-a-Captive? 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. R L Consulting, LLC.

3. What are the Benefits? What are the Benefits? Long term control of insurance cost 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. R L Consulting, LLC.

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

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

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

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

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

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

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

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

12. Facts Facts Work Comp 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 Liability –2003 $233 Billion Industry Wide was spent on Claims & Lawsuits –Up 27.4 Billion from 2002 Risk Management Risk Management A good risk management program will reduce the above affect Provided by Tillinghast Accounting & Actuarial Firm R L Consulting, LLC. R L Consulting, LLC.

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

14. Learn This Lesson 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. 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 Liability - Case Study R L Consulting, LLC. R L Consulting, LLC.

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

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

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

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

20. End of the Day 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. R L Consulting, LLC.

21. R L Consulting Team 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! 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. R L Consulting, LLC.

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