2.  Incorporated in 1985, Demotech, Inc. is a financial analysis and actuarial services firm that provides Financial Stability Ratings ® (FSRs) to the P&C and Title insurance industry.  Demotech was the first company to have its rating process formally reviewed and accepted by: ◦ Fannie Mae (1989) ◦ Freddie Mac (1990) ◦ HUD (1994 & 2005)  1996 - Worked with Florida Office of Insurance Regulation to develop FSRs for Florida “take out” insurers to depopulate the residual market.  2005 - Approved by HUD for rating Professional Liability insurers of long term care facilities.

3. Arising out of or in any way involving insolvency, receivership, conservatorship, liquidation, bankruptcy, inability or refusal to pay of any organization, entity or vehicle of any kind, nature or structure in which the Insured has placed, recommended to be placed or obtained coverage or in which an Insured has placed or recommended to be placed the funds of a client or account; however, this Exclusion shall not apply if such organization, entity or vehicle is an insurance company that was rated A or better by A.M. Best at the time the Insured placed, recommended to be placed or obtained such coverage.

4. The financial inability to pay, insolvency, receivership, bankruptcy or liquidation of any insurance company … however, this exclusion does not apply if, at the time the insured placed the subject risk with any of the above-described entities, such entity or entities were rated by A.M. Best as B+ or higher…

5. Arising out of, directly or indirectly, insolvency, receivership, bankruptcy, or inability to pay of any organization in which the “Insured” has placed or obtained coverage or in which an “Insured” has placed the funds of a client or account; however, this exclusion shall not apply if the “claim” is based upon the insolvency, receivership, liquidation or inability to pay of any insurer that was rated as “A-” or better by the A.M. Best Company at the time the business was placed.

6. Based upon, arising out of or in any way involving any bankruptcy, receivership, conservatorship, insolvency, or financial inability to pay of any organization, including but not limited to a Product Provider, regardless of when the financial impairment of such organization began and whether or not any Insured was aware or could have been aware of the financial impairment of such organization.

7. 2007 Best RatingsNumber of CompaniesAverage 2006 RBC Ratio Weighted Average 2006 RBC Ratio A++/A+446258.696.33 A/A-1,079129.476.26 B++/B+25959.904.95 B4710.484.81 B-227.434.04 C++84.311.92 C+23.843.68 C0NA C-36.994.73 E22.70 F113.49 NR-130847.228.60 NR-25261.515.58 NR-391232.989.94 NR-4136.133.05 NR-5142107.024.78 NR74181.813.09 2,549132.996.19

8. Modified Best RatingCountAverage BCAR A++63313.80 A+380256.59 A618264.37 A-496272.47 B++177247.47 B+100246.74 B49179.03 B-21142.78 C++8112.94 C+267.15 C00.00 C-390.27 TOTAL1917259.44

9. Based upon, arising out of, attributable to, or related in any way to the financial inability of any insurance company to pay or fulfill obligations under a policy or contract of insurance, reinsurance, insurance pool, suretyship, annuity or endowment; however, this exclusion will not apply if, at the inception of the POLICY PERIOD, the insurance company or association was: Rated “B” or higher by A.M. Best Company or given a Financial Stability Rating ® of “A” or better by Demotech, Inc.

10. Source: A.M. Best, Inc.’s Impairment Rate and Rating Transition Study dated April 18, 2005; complement of page 6, Exhibit 2. Demotech, Inc.’s Serious About Solvency dated August 2005; page 4, Exhibit 3.

11. Source: A.M. Best, Inc.’s Impairment Rate and Rating Transition Study dated April 18, 2005; complement of page 6, Exhibit 2. Demotech, Inc.’s Serious About Solvency dated August 2005; page 4, Exhibit 3.

12. Source: A.M. Best, Inc.’s Impairment Rate and Rating Transition Study dated April 18, 2005; complement of page 6, Exhibit 2. Demotech, Inc.’s Serious About Solvency dated August 2005; page 4, Exhibit 3.

13. The policy reimburses defense costs when a gap in an Agent’s Errors and Omissions insurance coverage is created by an insolvency that is applicable to the Designated Insurance Company. ‘Designated Insurance Company’ is the covered carrier. Coverage is provided by Century Surety Company as tangible evidence of its commitment to independent producer.

14. This policy, subject to its terms, conditions, exclusions and limitations, covers defense costs incurred by an Insured for a claim alleging damages caused by the insolvency of the Designated Insurance Company as adjudged or declared by a court of competent jurisdiction. Receivership and rehabilitation are not covered because in these positions, the Designated Insurance Company is paying claims.

15. Questions?