Contract analysis

1. All fourteen (14) formal findings set forth in the Final Examination Report issued by the Florida Office of Insurance Regulation ("FL OIR") on May 12, 2025, arising from the coordinated multi-state market-conduct examination of Quorum Indemnity Insurance Company ("QIIC") covering the period January 1, 2021 through December 31, 2023. These fourteen findings are categorized as follows: six (6) claims-handling timeli

2. All twenty-three (23) control deficiencies identified in Internal Audit Report No. IA-2025-017, issued on August 4, 2025 by Director of Internal Audit Neil Granger, which assessed the market-conduct compliance program across all three carrier subsidiaries and assigned an overall program rating of "Needs Significant Improvement" — the second-lowest rating on QIH's five-tier internal audit rating scale.

3. The Corrective Action Plan ("CAP") accepted by FL OIR on July 28, 2025, which establishes a remediation and compliance certification deadline of December 31, 2025. This Manual is designed to serve as the foundational compliance infrastructure supporting full and timely satisfaction of all CAP milestones.

4. The Order to Show Cause issued by the California Department of Insurance ("CDI") on June 18, 2025, regarding advertising violations in California, with a hearing scheduled for October 14, 2025. The Manual reflects the Phase 1 gap analysis conducted between August 19 and October 3, 2025, during which Calderwood & Harkness reviewed seventy-nine (79) total state licenses held across thirty-eight (38) unique licensed

Section 1.1 — Purpose and Scope of This Manual 1.1.1 — Statement of Purpose The purpose of this Revised Market-Conduct Compliance Manual (this "Manual") is to establish uniform, comprehensive market-conduct compliance policies and procedures for all Quorum Insurance Holdings Corp. ("QIH") operating subsidiaries and affiliated entities. This Manual sets forth the standards, processes, and controls that govern the mann

Section 1.2 — Regulatory Context and Triggering Events 1.2.1 — Coordinated Multi-State Market-Conduct Examination In September 2023, the Connecticut Department of Insurance ("CTDOI"), acting as QIIC's domestic regulator, initiated a coordinated multi-state market-conduct examination of Quorum Indemnity Insurance Company. The Florida Office of Insurance Regulation ("FL OIR") served as the lead examining state in the c

Section 1.3 — Organizational Governance Framework 1.3.1 — Board-Level Oversight The Board of Directors of Quorum Insurance Holdings Corp. exercises oversight of the enterprise-wide market-conduct compliance program through its Audit & Compliance Committee. The Audit & Compliance Committee is chaired by Margaret Aldworth, an independent director, and is composed of independent, non-executive directors in accordance wi

Section 1.4 — Domestic Regulator and NAIC Coordination 1.4.1 — Domestic Regulators The domestic regulators of the Carrier Subsidiaries are as follows: (a) QIIC: Connecticut Department of Insurance (CTDOI); (b) QSU: Texas Department of Insurance (TDI); and (c) QLA: Arizona Department of Insurance and Financial Institutions (ADIFI). 1.4.2 — NAIC Coordination QIH and its Carrier Subsidiaries participate in the NAIC Mark

Section 1.5 — Third-Party Advisors and Service Providers QIH has engaged the following third-party advisors and service providers in connection with its market-conduct compliance program: (a) Calderwood & Harkness LLP (Responsible Partner: Marcus Delgado; Lead Associate: Carlos Espinoza; 1177 Avenue of the Americas, 34th Floor, New York, NY 10036). Calderwood & Harkness serves as outside counsel for the comprehensive

Section 2.1 — Purpose and Applicability This Chapter establishes uniform claims-handling procedures and timeliness standards applicable to all Carrier Subsidiaries (QIIC, QSU, and QLA) across all lines of business and all thirty-eight (38) unique licensed states. The procedures and standards set forth in this Chapter are designed to achieve the following objectives: (a) Remediate the six (6) claims-handling timelines

Section 2.2 — Claims Acknowledgment Standards 2.2.1 — Uniform 10-Business-Day Acknowledgment Standard All claims received by a Carrier Subsidiary or by Pinnacle Bridge MGA, LLC on behalf of a Carrier Subsidiary must be acknowledged in writing (including by electronic communication) to the claimant or policyholder within ten (10) Business Days of receipt. For purposes of this Section, "receipt" means the date on which

Section 2.3 — Claims Investigation Standards Upon acknowledgment of a claim, the assigned claims adjuster shall commence the claims investigation within five (5) Business Days of the date of acknowledgment. The investigation shall be conducted diligently, thoroughly, and in good faith, with the objective of determining coverage, liability, and damages in a manner that is fair to the claimant or policyholder. 2.3.1 —

Section 2.4 — Prompt-Pay Standards and Timelines 2.4.1 — Statutory Prompt-Pay Windows Upon completion of the claims investigation, all claims for which coverage has been confirmed and liability and damages determined shall be paid within the applicable state Prompt-Pay Window. Prompt-Pay Windows vary by state and are set forth in the State-by-State Regulatory Requirements Matrix (Appendix B). QIH has established an i

Section 2.5 — Escalation Protocols for Claims Approaching Statutory Deadlines To prevent any claim from exceeding applicable statutory deadlines, the following tiered escalation framework is hereby established: Level 1 — Day 5 Post-Receipt (Warning). On the fifth (5th) Business Day following claim receipt, the claims management system shall generate an automated alert to the assigned claims adjuster, notifying the ad

Section 2.6 — Claims File Documentation and Quality Standards 2.6.1 — Required File Elements Every claims file maintained by a Carrier Subsidiary shall contain, at a minimum, the following elements: (a) The initial claim report, including the date and method of receipt, the reported facts and circumstances of the loss, and the identity of the reporting party; (b) A copy of the acknowledgment communication sent to the

Section 2.7 — Subsidiary-Specific Claims Procedures 2.7.1 — QIIC (Personal Auto, Homeowners, Dwelling Fire) In addition to the enterprise-wide procedures set forth in this Chapter, QIIC claims operations shall comply with the following line-specific and state-specific procedures: (a) Personal automobile claims shall be handled in compliance with the applicable state's motor vehicle insurance claims-handling statutes

Section 2.8 — Pinnacle Bridge MGA Claims Involvement 2.8.1 — Scope of Pinnacle Bridge Claims Functions Pinnacle Bridge MGA, LLC performs certain claims-related functions on behalf of QIIC and QSU through its fintech distribution platform, including claims intake and first-notice-of-loss ("FNOL") processing. The following procedures govern Pinnacle Bridge's involvement in the claims process: (a) Pinnacle Bridge may re