ENERGY INSURANCE

MUTUIAL

ENERGY INSURANCE

MUTUIAL

22nd ANNUALRISK MANAGERS

INFORMATION MEETING

22nd ANNUALRISK MANAGERS

INFORMATION MEETING

David L. Hadler

David L. Hadler

President and Chief Executive OfficerPresident and Chief Executive Officer

2007

THE YEAR IN REVIEW

CLAIMS NOTICE CATEGORIES

CATEGORY ONE Highly improbable that it will impact EIM; requires only

periodic review to insure that it is not adversely developing.

CATEGORY TWO Requires continuous monitoring and specific actions.

CATEGORY THREE Meets the accepted requirements for setting specific loss

reserves

OPEN CLAIMS - 2007

CATEGORY 1 CATEGORY 2 CATEGORY 3

GENERAL LIABILITY

500 23 6

DIRECTORS & OFFICERS LIABILITY

48 6 5

FIDUCIARY LIABILITY

13 2 2

PROPERTY 33 10 115

CATEGORY 2 AND 3GENERAL LIABILITY LOSSES

FIRE 12

GAS EXPLOSION 11 FLOODING 2 POLLUTION 2 LAND CLAIM 1 STEAM PIPE RUPTURE 1

CASE RESERVES ESTABLISHED

-50,000,000

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

2002 2003 2004 2005 2006 2007

GL D&O Property R/I

LOSSES PAID

-50,000,000

0

50,000,000

100,000,000

150,000,000

200,000,000

2002 2003 2004 2005 2006 2007

GL D&O Property R/I

2007 – CLAIM PAYMENTS,NEW RESERVES ESTABLISHED

CLAIMS

PAID

NEW CASE RESERVES

GENERAL LIABILITY

$ 45,463,208 $166,351,723

D&O/FIDUCIARY $ 89,433,740 $ 70,867,734

PROPERTY $ 13,824,441 $ 22,304,193

REINSURANCE $ 10,951,231 $ 1,905,017

$159,672,620 $261,428,667

TOTAL CLAIMS PAID1986 -2007

CLAIMS PAID

GENERAL LIABILITY $214,343,260

D&O/FIDUCIARY $550,301,105

PROPERTY $ 51,476,384

REINSURANCE $ 44,114,707

$860,235,456

SURPLUS

300,000,000

350,000,000

400,000,000

450,000,000

500,000,000

550,000,000

600,000,000

650,000,000

700,000,000

2002 2003 2004 2005 2006 2007

2007 – DESPITE SEEING:

• DISTRIBUTION OF $ 12,500,000

• PAID LOSSES OF $159,672,620

• CASE RESERVES OF $261,428,667

• SURPLUS GREW BY $ 31,070,000

2008 A. M. BEST RATINGENERGY INSURANCE MUTUAL LIMITED

BEST’S RATING: A (EXCELLENT) OUTLOOK: STABLE “The rating reflects the Company’s excellent

capitalization, historically strong operating returns, and conservative leverage position.”

DISTRIBUTIONS

1988 – 1990 $ 52,133,827

1996 – 2001 $ 95,000,000

2005 – 2007 $ 32,500,000

TOTAL $179,633,827

REINSURANCE

2008

REINSURERS IMPACTED

• PURCHASED REINSURANCE SINCE DECEMBER 1, 1986

• FIRST CLAIM ON REINSURERS 1996

• NEXT CLAIMS ON REINSURERS 2000, 2001, 2002, 2003, 2004, 2005 AND 2007

REINSURANCE

• Our argument that we are a market of severity not frequency is obviously now open to question.

• We seem to have entered a phase where we are finding ourselves involved with frequent severe losses.

REINSURANCE RELATIONSHIPSON CORE BUSINESS – GL AND D&O• Various Lloyd’s Syndicates have reinsured

EIM since December 1, 1986.

• NEIL first reinsured EIM on January 1, 1994.

• Basically the same group of reinsurers since January 1, 2004.

• Personal relationships are extremely important.

2008 REINSURANCEGENERAL LIABILITY

RETENTIONS

• $5,000,000 EACH AND EVERY LOSS

• $50,000,000 EACH LOSS AND

• $75,000,000 IN THE AGGREGATE

2008 REINSURANCEGENERAL LIABILITY

RECOVERABLES

• FIRST $100,000,000 LOSS $45,000,000 RECOVERABLE

• SECOND $100,000,000 LOSS $70,000,000 RECOVERABLE

• THIRD $100,000,000 LOSS $95,000,000 RECOVERABLE

MAXIMUM RECOVERABLE $250,000,000

2008 REINSURANCED&O LIABILITY

• MAXIMUM CAPACITY $50,000,000

• NEIL REINSURES EIM FOR 80% OF $20,000,000 EXCESS OF $30,000,000

• THEREFORE EIM’S MAXIMUM NET LINE IS $34,000,000

2008 REINSURANCED&O LIABILITY

RETENTIONS

• $5,000,000 EACH AND EVERY LOSS

• $29,000.000 EACH LOSS AND

• $58,000,000 IN THE AGGREGATE

2008 REINSURANCED&O LIABILITY

RECOVERABLES

• FIRST $50,000,000 LOSS $16,000,000 RECOVERABLE

• SECOND $50,000,000 LOSS $16,000,000 RECOVERABLE

• THIRD $50,000,000 LOSS $45,000,000 RECOVERABLE

• FOURTH $50,000,000 LOSS $45,000,000 RECOVERABLE

MAXIMUM AMOUNT RECOVERABLE $102,000,000 FROM THE NON NEIL REINSURANCE

2008 CASUALTY REINSURERS

• ASPEN INSURANCE UK LIMITED• ENDURANCE SPECIALTY• LIBERTY MUTUAL• LLOYDS• NUCLEAR ELECTRIC INSURANCE LIMITED• ODYSSEY RE• PLATINUM RE• TRANSATLANTIC RE

2008 REINSURANCEPROPERTY

• UP TO FEBRUARY 1, 2007 50/50 QUOTA SHARE ARRANGEMENT WITH ENDURANCE, BERMUDA.

• FROM FEBRUARY 1, 2007 EXCESS OF LOSS ARRANGEMENT WITH LLOYD’S, ODYSSEY RE HANNOVER RE AND NEIL.

• FROM FEBRUARY 1, 2008 EXCESS OF LOSS PROGRAM WITH NEIL.

THE ENERGY SCHOOL

Samuel M. Garvin, Jr.Samuel M. Garvin, Jr.

Vice President and Chief Financial OfficerVice President and Chief Financial Officer

2007FINANCIAL

REVIEW

12/31/07 12/31/06 CHANGEASSETS

Invested assets $1,245.5 $1,250.4$

(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2

LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3

Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5

Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7

Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2

(In Millions)

SIMPLIFIED BALANCE SHEET

FIXED INCOME MANAGERS Pyramis Global Advisors Morgan Stanley

EQUITY MANAGERS SSgA State Street Global Advisors

INVESTMENT ADVISORS Frank Russell Company

INVESTMENT MANAGEMENT

12/31/07 12/31/06 CHANGEASSETS

Invested assets $1,245.5 $1,250.4$

(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2

LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3

Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5

Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7

Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2

(In Millions)

SIMPLIFIED BALANCE SHEET

12/31/07 12/31/06 CHANGE

Invested assets $1,245.5 $1,250.4$

(4.9)

Payable for investments 3.2 19.5

(16.3)

TOTAL $1,242.3 $1,230.9$

11.4

12/31/07 12/31/06

PYRAMIS $ 289.3 24.1% $ 277.1 23.3%

MORGAN STANLEY $ 287.3 24.0% $ 279.6 23.5%

SSgA – US $ 427.5 35.7% $ 426.8 35.9%

SSgA – NON US $ 194.7 16.2% $ 204.9 17.3%

TOTAL WITH MANAGERS $1,198.8 100.0% $1,188.4 100.0%

CASH $ 43.5 $ 42.5

TOTAL $1,242.3 $1,230.9

(In Millions)

INVESTMENT MANAGERS ALLOCATION

ASSET ALLOCATION - DECEMBER 31, 2007

ASSET CLASS TARGET DRIFT RANGE

U. S. EQUITY 35% 30% - 45%

NON-U. S. EQUITY 15% 10% - 20%

FIXED INCOME 50% 40% - 55%

12/31/07 12/31/06 CHANGEASSETS

Invested assets $1,245.5 $1,250.4$

(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2

LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3

Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5

Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7

Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2

(In Millions)

SIMPLIFIED BALANCE SHEET

12/31/07 12/31/06 CHANGE

Loss reserves $844.4 $750.1$

94.3

Reinsurance recoverable 404.1 292.4

111.7

TOTAL $ 440.3 $ 457.7$

(17.4)

12/31/07 12/31/06 Change

LOSS RESERVES $147.3 $195.1 $(47.8)IBNR $290.0 $260.8 29.2LAE RESERVES $ 3.0 $ 1.8 $ 1.2

TOTAL $440.3 $457.7$

(17.4)

NET CLAIM RESERVES

12/31/07 12/31/06 CHANGEASSETS

Invested assets $1,245.5 $1,250.4$

(4.9) Reinsurance recoverable 404.1 292.4 111.7 Other 67.4 59.0 8.4TOTAL $1,717.0 $1,601.8 $ 115.2

LIABILITIES AND SURPLUS Loss reserves $844.4 $750.1 $ 94.3

Unearned premiums 102.4 110.4 (8.0) Policyholder distribution payable 12.5 10.0 2.5

Payable for investments 3.2 19.5 (16.3) Deferred taxes 72.5 59.8 12.7

Other 14.9 16.0 (1.1) Policyholders’ surplus 667.1 636.0 31.1TOTAL $1,717.0 $1,601.8 $ 115.2

(In Millions)

SIMPLIFIED BALANCE SHEET

12/31/07 12/31/06 CHANGE

Unearned premiums $ 102.4 $ 110.4$

(8.0)

UNEARNED PREMIUM RESERVES

12/31/07 12/31/06 ChangeGENERAL LIABILITY $ 49.7 $ 49.4 $ 0.3

D&O / FIDUCIARY $ 36.1 $ 41.7$

(5.6)

PROPERTY $ 16.6 $ 19.3$

(2.7)

TOTAL $102.4 $110.4$

(8.0)

STATEMENT OF OPERATIONS

Revenues (In Millions) 2007 2006 ChangePremiums

Gross premiums written$194.1 $202.0

$ (7.9)

Reinsurance premium assumed5.4 5.6 (0.2)

Decrease in unearned premiums 8.1 4.8 3.3Reinsurance premiums ceded (92.1) (92.6) 0.5Net premiums earned

$115.5 $119.8$

(4.3)Other underwriting income

2.7 3.7 (1.0)Investment income - net 44.4 38.2 6.2Net (loss)/gain on disposal of investments (2.0) 1.5

(3.5)

TOTAL REVENUE $160.6 $163.2

$ (2.6)

STATEMENT OF OPERATIONS

Revenues (In Millions) 2007 2006 ChangePremiums

Gross premiums written$194.1 $202.0

$ (7.9)

Reinsurance premium assumed5.4 5.6 (0.2)

Decrease in unearned premiums 8.1 4.8 3.3Reinsurance premiums ceded (92.1) (92.6) 0.5Net premiums earned

$115.5 $119.8$

(4.3)Other underwriting income

2.7 3.7 (1.0)Investment income - net 44.4 38.2 6.2Net (loss)/gain on disposal of investments (2.0) 1.5

(3.5)

TOTAL REVENUE $160.6 $163.2

$ (2.6)

2007 2006 CHANGE

Net premiums earned $ 115.5 $ 119.8$

(4.3)

NET PREMIUMS EARNED

12/31/07 12/31/06 Change

GENERAL LIABILITY $ 60.1 $ 61.7 $ (1.6)

D&O/FIDUCIARY $ 44.7 $ 47.3 $ (2.6)

PROPERTY $ 5.3 $ 5.2 $ 0.1

ASSUMED $ 5.4 $ 5.6 $ (0.2)

TOTAL $115.5 $119.8 $ (4.3)

(In Millions)

STATEMENT OF OPERATIONS

Revenues (In Millions) 2007 2006 ChangePremiums

Gross premiums written$194.1 $202.0

$ (7.9)

Reinsurance premium assumed5.4 5.6 (0.2)

Decrease in unearned premiums 8.1 4.8 3.3Reinsurance premiums ceded (92.1) (92.6) 0.5Net premiums earned

$115.5 $119.8$

(4.3)Other underwriting income

2.7 3.7 (1.0)Investment income - net 44.4 38.2 6.2Net (loss)/gain on disposal of investments (2.0) 1.5

(3.5)

TOTAL REVENUE $160.6 $163.2

$ (2.6)

2007 2006 CHANGE

Investment income – net

Net (loss)/gain on disposal of investment

TOTAL

$ 44.4

(2.0)

$ 42.4

$ 38.2

1.5

$ 39.7

$ 6.2

(3.5)

$ 2.7

NET INVESTMENT INCOME

(In Millions)

12/31/07 12/31/06 ChangeINTEREST AND DIVIDENDS $44.4 $38.2 $ 6.2REALIZED (GAINS) LOSSES -EQUITIES -FIXED INCOME

0.7 (2.7)$42.4

1.6

(0.1)$39.7

(0.9)

(2.6)$ 2.7

INVESTMENT PERFORMANCE

EIM ANNUAL RETURN

2007 6.5% 2002(6.1)%

2006 12.6% 2001(1.1)%

2005 6.0% 2000 1.7%

2004 9.2% 1999 7.7%

2003 18.0% 1998 14.4%

TAX ADJUSTED PERFORMANCEVS. BENCHMARKS BY MANAGER

ONE YEAR RETURNS

PERFORMANCEBENCHMARK

COMBINED FUND 6.5 6.7

FIXED INCOME PYRAMIS 6.4 5.4 MORGAN STANLEY 3.3 7.0

EQUITY SSgA S&P 900 5.9 5.7 SSgA NON-US 12.1 11.2

LONG TERM INVESTMENT PERFORMANCEAS OF DECEMBER 31, 2007

7 Years 6.1%

5 Years 10.4%

3 Years 8.3%

Expenses (In Millions)

Losses and loss adjustment expenses

2007 2006 Change

Gross losses and LAE incurred $258.0 $195.3 $(62.7)

Assumed losses and LAE 0.0 (1.8) (1.8)

Reinsurance recoveries (133.9) (94.2) 39.7

Net losses and LAE incurred $124.1 $ 99.3 $(24.8)

Other underwriting expenses 1.9 2.6 0.7

Administrative expenses 9.9 8.6 (1.3)

Total expenses $135.9 $110.5 $(25.4)

Policyholders’ distribution 12.5 10.0 (2.5)

Income before income taxes $ 12.2 $ 42.7 $(30.5)

Income tax (0.9) 9.6 10.5

NET INCOME $ 13.1 $ 33.1 $(20.0)

STATEMENT OF OPERATIONS

2007 2006 CHANGE

Net losses and LAE incurred $ 124.1 $ 99.3$

(24.8)

NET LOSSES AND LAE

12/31/07 12/31/06 Change2007 $ 119.8 $ 0.0 $(119.8)2006 (3.4) 72.8 76.22005 0.6 37.8 37.22004 (5.8) (15.9) (10.1)2003 19.4 (6.7) (26.1)2002 3.3 23.1 19.8PRIOR (12.4) (9.8) 2.6TAIL 2.6 (2.0) (4.6)

$ 124.1 $ 99.3 $ (24.8)

(In Millions)

(In Millions)

Gross Net

Initial 12/31/07 Change Initial 12/31/07 Change

2007 $ 252.6 $ 252.6 $ 0.0 $ 119.7 $ 119.7 $ 0.0

2006 132.6 102.2 30.4 72.8 69.4 3.4

2005 155.5 288.2(132.7)

82.1 112.9 (30.8)

2004 125.8 59.4 66.4 79.5 36.5 43.0

2003 147.8 167.6(19.8)

59.6 96.2 (36.6)

2002 262.1 427.0(164.9)

103.1 273.7 (170.6)

2001 149.2 122.0 27.2 60.1 68.9 (8.8)

2000 120.7 91.0 29.7 73.9 73.0 0.9

All Coverages

INCURRED LOSSES BY ACCIDENT YEAR

Gross IBNR $471.1 Million

CHANGE IN POLICYHOLDERS’ SURPLUS

BEGINNING SURPLUS $636.0

Plus:Net income $13.1Unrealized gain of investments $18.0

Change $31.1

ENDING SURPLUS $667.1

(In Millions)

2007UNDERWRITING REVIEW

JILL DOMINGUEZVice President-Underwriting

NEW MEMBERSIN 2007

Cascade Natural Gas Corporation

Spectra Energy Corporation

RC Cape May Holdings, LLC

Bicent Power, LLC

MEMBER RETENTION RATE

“The EIM staff does a great job of providing focused customer service and treats their Members with the highest regard. EIM is an indispensable element to the industry’s financial security and strength. EIM is a pleasure to do business with.”

MEMBER RETENTION RATE

2007 98%

2006 97%

2005 96%

2004 99%

2003 96%

2007 MEMBERSHIP

One Acquisition by Non-EIM Member

Three Non-Renewals2 no longer needed limits1 lost because of price

Three Member/Member Mergers

ENDED 2007 WITH 172 MEMBERS

MEMBERSHIP MIX

“I think EIM has done a good job of providing a stable product for the utility industry”

MEMBERSHIP MIX

GROSS WRITTEN PREMIUM2006 VS. 2007

2006

$207,667,046

2007

$199,896,285

GENERAL LIABILITY

$91,982,504 Gross Written Premium

169 EGL Policyholders

$74.6M Average Limit

$39M Average Attachment Point

48.5% of excess GL Policies Written for Maximum $100M Limit

GENERAL LIABILITY ENHANCEMENTS

EPLI 48%

Worker’s Compensation 18%

Drop Down Joint Venture 43%

Drop Down Over Specific Aggregates

Professional Liability($65M Sublimit)

67%

7.2%

Breakdown of other key operations insured by Excess Liability Policies

Propane - 22 members

Dams – 16 members

E & P – 23 members

Mining – 9 members

Water Operations – 18 members

DIRECTORS AND OFFICERS LIABILITY

$57.4M Gross Premium Written

94 EDO Policyholders

$36.4M Average Limit

$44.1M Average Attachment Point

44% of D&O policies written for maximum $50M Limit

FIDUCIARY LIABILITY

$6.46M Gross Written Premium

$22.8M Average Limit

$38.3M Average Attachment Point

45 Policy Holders

PROPERTY

Premium

$7.5M EIM Only

$21.5M NEIL Only

Total policies written Primary layer – 50

Excess layer - 23

PROPERTY

Capacity =

$35,000,000

8% of members buy maximum limits

What is EIM thinking on Property

Long term view of market –

Strive to keep capacity over long term

BUILDERS RISK

Term = 18 Months up to a Maximum of 60 Months

TRIA AND TRIPRA

Program extended until 2014

Eliminates distinction between foreign and domestic acts of terrorism – both now considered “certified”

$100 billion cap – insurer aggregate liability

EIM will offer terrorism coverage in accordance with the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA)

EIM removed the cap on Non-certified

Climate Change/Carbon Sequestration

Currently working with a few members on Carbon Sequestration projects, solely in information gathering phase-

What liabilities are to be assumed by utility?

How will sites be managed over long periods of time?

Will state or federal government provide any relief?

Please keep us informed of your company’s needs and questions regarding climate change issues and carbon sequestration projects.

What should a mutual actually do?

Long term provider of stable capacity?or

Lowest cost provider, which could meanReduced capacity

Loss of policyholder’s distribution

More restrictive coverage

Give us your input on comment sheets or at Member’s Only Session

Customer Service – In Focus!

It would be difficult to improve on the overall operation of EIM. EIM is a very important player in my insurance program and the ease of doing business with EIM makes my job easier. I appreciate the Company and everyone I come in contact with.

2007 RISK MANAGER SURVEYRESULTS

EIM follows reasonable, prudent, and sound underwriting practices:

100%

Agree/Strongly Agree

EIM provides added value in form of broad coverage, price stability, consistent limits, and financial strength:

2007 RISK MANAGER SURVEYRESULTS

99.25%

Agree/Strongly Agree

Overall, EIM meets my expectations in level of service:

2007 RISK MANAGER SURVEYRESULTS

99%

Agree/Strongly Agree

Robert P. SchmidRobert P. SchmidVice President and Chief Operating OfficerVice President and Chief Operating Officer

ENERGYINSURANCE SERVICES

▪ EIS OVERVIEW

▪ OUR DOMICILE

▪ SERVICE IMPROVEMENTS

▪ COVERAGE

▪ REGULATORY & COMPLIANCE ACTIVITY

▪ THE FUTURE

2007 THE YEAR IN REVIEW

EIS BY THE NUMBERS

▪ $1.8 Billion in Assets

▪ $1.6 Billion in Gross Reserves

▪ $500 Million Net Reserves

▪ $450 Million Invested Assets

▪ $150 Million Cash / Equivalents

▪ $70 Million in MBP Equity

▪ $80 Million Written Premium

▪ $35 Million Ceded Premium

▪ $60 Million Paid Claims

SOUTH CAROLINA

▪ State Legislature Passes S589Allows Director to Approve Reinsurers

▪ New Director of Insurance AppointedScott H. Richardson CPCU

▪ Continued Focus on Service Providers IssuesManagers are the SCDOI’s First Responders

▪ Captive CPA Appointed State TreasurerConverse Chellis

SERVICE IMPROVEMENTS

▪ Information and ReportingExpanded Financial Information

Improved Accuracy and Timeliness

Provided Internet Banking

Developed Foundations of Secure Web Portal

▪ Insurance Support & Policy

Development Improved Information Stream between Major Carriers, Participants and their Advisors

COVERAGE

▪ All Risk Property▪ All Risk Power Producer

Operational ▪ All Risk Railroad Rolling Stock▪ Aggregate Excess of Loss

Reinsurance ▪ Automobile▪ Builder's Risk▪ Contractor Equipment Floater▪ Deductible Buy-Back▪ Environmental▪ Excess Liability▪ Excess Workers’

Compensation▪ First Excess Nuclear Property▪ First Excess Casualty

▪ Following Form EGL Indemnity

▪ Hull and Machinery

▪ Loss Portfolio Transfer of Workers’ Compensation Claims

▪ Marine Liability

▪ Professional Liability

▪ Public Liability Deductible Reimbursement

▪ Retiree Medical Group Stop Loss Policies 

▪ Specific Risk Liability

▪ Transmission and Distribution

▪ TRIA

▪ Ultimate Net Loss

BUILDER’S RISK

▪ Program Flexibility

▪ Savings of 4% to 6% if Reinsured versus Commercial Options

▪ Project Orientations, Wrap Ups or OCIP Platforms

▪ Uninsurable or Prohibitively Expensive Perils can be Covered

WORKER’S COMPENSATION

▪ Platform for Fronted Program in Jurisdictions where Regulators Require Admitted Insurer

▪ Deductible Reimbursement Programs May Enhance the Treatment of Current SI Reserves

▪ Access to Reinsurers with Nuclear Capacity

▪ Daily Funding of TPA Claims Management

PARAMETRIC T&D

▪ Developed by a Consortium of Utilities with Hurricane Wind Exposure

▪ Creates a System Wide Detailed Inventory of Exposures

▪ Models Potential Future Events Based on Robust Historical Storm Data

▪ Estimates the Likelihood of a Future Event of a Given Intensity Occurring at any Location During the Policy Period

▪ Claim is Triggered not by Loss Amount, but by Physical Parameter of Covered Event.

TERRORISM

▪ Individual Cell MBP’s can access TRIA program

▪ Lower Earned Premiums mean lower Deductibles and Higher Recoupment

▪ MBP’s can cover Nuclear, Biological and Chemical Risks Excluded by Insurers and access TRIA for those Perils

▪ MBP’s can fund Retentions and Access Reinsurance for Assumed Risks

REGULATORY & COMPLIANCE

▪ First U.S. Audit Completed and Filed with the SCDOI

▪ 2007 Audit Began in September

▪ EIB Tax Years 2003 & 2004 are under Examination by the IRS

▪ IRS Issued Revenue ruling 2008-8

Provides guidance for Protected Cell Companies regarding Insurance Treatment for Federal Tax Purposes

2008

▪ Continue Service Improvements for Existing Members

▪ Responsive Consultations with Prospective Participants

▪ Support the Resolution of the Current IRS Examination

▪ Meet all Regulatory and Compliance Responsibilities in our Domicile

▪ Host an Effective and Informative Annual Meeting in Greenville October 13th – 16th