Contract analysis

I. Introduction and Identification of Counsel I write in my capacity as a partner at Calderwood & Harkness LLP ("C&H") on behalf of our clients, Quorum Insurance Holdings Corp. ("QIH"), a Delaware corporation publicly traded on the Nasdaq Global Select Market (ticker symbol: QIHC), with its principal executive offices located at 200 Constitution Plaza, Suite 3400, Hartford, Connecticut 06103, and its principal insura

II. Identification of the Treaty and the Dispute The reinsurance arrangement giving rise to this dispute is governed by the following instrument: Treaty: Aggregate Excess-of-Loss Reinsurance Treaty No. PA-QCS-2019-EXL-0044 (the "Treaty") Cedent: Quorum Casualty & Surety Company, a New York-domiciled stock property and casualty insurer (NAIC No. 24891) Reinsurer: Pinnacle Atlantic Reinsurance Ltd., a Bermuda Class 4 i

III. Invocation of Treaty Article 22 — Mandatory Arbitration

Article 22 of the Treaty provides, in relevant part, that any dispute arising out of or relating to the Treaty, including but not limited to disputes concerning the interpretation, performance, or breach thereof, shall be resolved exclusively by binding arbitration. Article 22 specifies that any such arbitration shall be conducted in accordance with the Rules of the AIDA Reinsurance and Insurance Arbitration Society

IV. Response to HFC's Assertion that the Arbitration Clause Is Inapplicable QC&S notes that the HFC Demand Letter contained the assertion — unsupported by any textual analysis or legal authority — that the arbitration clause set forth in Article 22 of the Treaty is "inapplicable" to the specific claims raised by Pinnacle Atlantic. QC&S categorically rejects this assertion, which is without merit in fact or law. The a

V. Appointment of Party-Appointed Arbitrators Pursuant to Article 22 of the Treaty and the ARIAS-U.S. Rules, each party to the arbitration is entitled to appoint one party-appointed arbitrator. The two party-appointed arbitrators shall thereafter select a neutral umpire to serve as the third member and chair of the arbitration panel. QC&S hereby notifies Pinnacle Atlantic that QC&S intends to appoint its party-appoin

VI. Scope of Arbitration QC&S demands that the arbitration encompass all claims, counterclaims, defenses, and disputes arising under or relating to Treaty No. PA-QCS-2019-EXL-0044, including without limitation: (a) Pinnacle Atlantic's challenge to the $78,400,000 in reinsurance recoverables billed by QC&S under the Treaty for Treaty Year 2022 ($69,700,000) and Treaty Year 2023 ($8,700,000), and QC&S's defense and aff

VII. Notice Regarding Judicial Proceedings QC&S places Pinnacle Atlantic and HFC on notice that, should Pinnacle Atlantic or HFC file any action, complaint, petition, or other proceeding in the Supreme Court of the State of New York, New York County, Commercial Division, or in any other state or federal court of competent jurisdiction, seeking to litigate any of the disputes covered by the arbitration clause in Artic

VIII. Reservation of Rights QC&S's invocation of Article 22 of the Treaty and this formal demand for arbitration are made expressly without waiver of any rights, claims, counterclaims, defenses, privileges, immunities, or remedies available to QC&S or QIH under the Treaty, at law, in equity, or otherwise, all of which are hereby expressly reserved. QC&S reserves all rights to assert additional claims, counterclaims,

IX. Document Preservation QC&S hereby demands that Pinnacle Atlantic immediately implement and enforce a comprehensive litigation hold and preserve all documents, electronically stored information ("ESI"), and communications of any kind relating to Treaty No. PA-QCS-2019-EXL-0044, including without limitation: • All underwriting files, submissions, binders, and correspondence relating to the Treaty or to any policy c

X. Request for Response QC&S requests that HFC confirm on behalf of Pinnacle Atlantic, in writing, within ten (10) business days of Pinnacle Atlantic's receipt of this letter, each of the following: (a) That Pinnacle Atlantic agrees to proceed to binding arbitration of all disputes between the parties arising under or relating to Treaty No. PA-QCS-2019-EXL-0044 in accordance with Article 22 of the Treaty and the ARIA

XI. Confidentiality This letter, together with the arbitration proceedings demanded herein, is confidential as between the parties in accordance with the confidentiality provisions of the ARIAS-U.S. Rules and the applicable provisions of the Treaty. QC&S expects that Pinnacle Atlantic and HFC will treat this letter and its contents as confidential and will not disclose the same to any third party except as may be req

XII. Contact Information and Communications All communications regarding this matter should be directed to: Douglas Carmichael, Esq. Calderwood & Harkness LLP One Liberty Plaza, 55th Floor New York, New York 10006 Telephone: (212) 506-7814 Facsimile: (212) 506-7801 Email: dcarmichael@calderwoodharkness.com With a copy to: Jeffrey Park, Esq. Calderwood & Harkness LLP One Liberty Plaza, 55th Floor New York, New York 10