1. Title Slide JUN 8 – 10, 2015 www.bermudacaptive.bm

2. Insurance/Reinsurance Restructuring Opportunities Speakers: James Naumovski, Senior Legal Counsel, RGA International Corporation Shelby Weldon, Director Licensing and Authorisation, Bermuda Monetary Authority Mark Allitt, Senior Manager, KPMG Moderator: Eric Haller, SVP M&A Randall & Quilter Investment Holdings

3. Insurance/Reinsurance Restructuring Opportunities 3 Key areas the panel will consider during todays session: Operational restructuring & redomestication of (re)insurance businesses Restructuring of stressed or distressed (re)insurers. Exit strategies for (re)insurers

4. Background on RGA Americas Certified reinsurer and Missouri Redomestication to Bermuda –Discontinuance from Barbados –Continuing in Bermuda (see s132C of the Companies Act 1981) Reflections –Tips for Success Due diligence into course of action Strong familiarity with Bermuda Commitment from executive management Redomestication Case Study

5. –Tips for Success (continued) Planning Competent team (both internal and external) Strong collaboration with regulators Patience –Challenges Costs Timing Redomestication Case Study

6. Continuing into Bermuda - BMA Assessment & Licensing Committee (“ALC”) Information Bulletin – ALC Insurance Application Process www.bma.bm/document center/supervisory information bulletins/ www.bma.bm/document center/supervisory information bulletins/ Minimum Criteria for Registration (Schedule 1 of the Insurance Act 1978)

7. Material Change – Section 30JA of the Insurance Act 1978 (“the Act”) Notification of Material Change – Section 30JB of the Act Objection to Material Change – Section 30JC of the Act Regulatory Considerations for Restructuring

8. 2. Restructuring of stressed or distressed (re)insurers. Key Drivers include: Adverse claims development / event driven stress Claims cost inflation Lack of proactive management Pressure on the asset side of the balance sheet Increased regulatory requirements Insurance/Reinsurance Restructuring Opportunities

9. ‘Ratchet down’ Scheme case study Background Provisional Liquidator Options & Scheme Feasibility Scheme Implementation Scheme Management Scheme Termination  Class 2 captive which wrote GL insurance to wall and ceiling contractors, policies include a 10 year sunset clause.  Financial position deteriorated – material adverse loss development reported in the annual actuarial reserve range.  Captive became non-compliant with its regulatory solvency requirement and ‘balance sheet insolvent’.  Certain parties able to petition to the Supreme Court of Bermuda for winding up.  PL appointed to prevent a winding up petition during feasibility and implementation stages.  PL discharged once Scheme was approved.  Options identified: Scheme of arrangement or insolvent liquidation / receivership.  Feasibility work and report produced: i.e. class determination, payment percentage calculation, vote canvasing, assessment of on-going claim handling methodology and approach.  Scheme deemed feasible and considered the favourable option for creditors / policyholders.  Scheme documentation drafted, voting forms, and final payment percentage calculation.  Policyholder and creditor correspondence, i.e. distribution and collection of voting forms.  Arrangement creditor meetings and sanction of Scheme by Bermuda court.  Annual calculation of payment percentage.  On-going review of Scheme feasibility based on latest actuarial advice.  Ad hoc inquiries and claim management assistance or guidance.  The scheme will terminate at the earliest of: 1)Completion of run-off period with claims being paid out in full i.e. 100%; 2)Upon the dissolution of the Captive; or 3)Upon a Board resolution that a Scheme is no longer required. “85% of gross high end reserves are IBNR.” “100% of returned votes were YES votes for both Creditor Classes.”

10. 3. Exit strategies for (re)insurers Key Drivers include: Change in business strategy Change in ownership Financial stress Key routes to exit: Managed run-off Accelerated exit (commutation, novation, Scheme, Long term business transfer) Sale to a third party Insurance/Reinsurance Restructuring Opportunities

11. 11 Accelerated Exit or Sale - Considerations Ability to achieve seller’s goals (price, risk transfer, collateral release) Track record –Deal activity –Likelihood to ‘chip’ away at price once selected as preferred party –Relationship with regulators –Claims & operations Efficient process and ability to execute Creditworthiness and/or collateral considerations Operations –Lines of business Reputation

12. Preparation Strategic advice Teaser / confidential information memorandum Process letter and timelines Identification of potential counterparties Strategic advice Teaser / confidential information memorandum Process letter and timelines Identification of potential counterparties Marketing Contacting potential counterparties Distribution of teaser and non disclosure agreement Distribution of information memorandum Evaluation of indicative offers Contacting potential counterparties Distribution of teaser and non disclosure agreement Distribution of information memorandum Evaluation of indicative offers Due diligence Selection of transaction counterparties Detailed due diligence Overall valuation from bidders Evaluating final offers Selection of preferred bidder Selection of transaction counterparties Detailed due diligence Overall valuation from bidders Evaluating final offers Selection of preferred bidder Completion Finalize share purchase agreement / LPT agreement / novation agreement Finalize negotiations Arrange signing Facilitate closing Integration Finalize share purchase agreement / LPT agreement / novation agreement Finalize negotiations Arrange signing Facilitate closing Integration A structured process will increase likelihood efficient deal execution, at a competitive price point 12 Accelerated Exit or Sale - Process