Contract analysis

I. Purpose of This Memorandum This memorandum has been prepared at the direction of Calderwood & Harkness LLP in connection with the firm's engagement by the Audit Committee of the Board of Directors of Quorum Insurance Holdings Corp. ("QIH" or the "Company") to conduct an independent internal investigation into the matters described herein. The Audit Committee retained Calderwood & Harkness by resolution adopted dur

II. Background: Receipt and Escalation of the Complaint A. Filing of the Complaint On February 14, 2026, an anonymous individual submitted a complaint through the IntegriLine Compliance Services, Inc. online reporting portal. IntegriLine is the third-party ethics-hotline provider retained by QIH to administer its confidential and anonymous reporting system, pursuant to which employees, contractors, and other individu

III. Summary of the Whistleblower Allegations A. Overview The complainant alleges a multi-year scheme orchestrated and executed by senior personnel at BSU to inflate premium revenue and underwriting income through two interrelated mechanisms: (1) Fabrication or material inflation of binder confirmations for commercial property policies, which were purportedly placed through fictitious or shell retail-broker counterpa

1. Veltrano Risk Advisors — The complainant asserts that this entity lacks valid surplus-lines licenses in any jurisdiction and that its listed business address is a virtual office with no genuine physical operations. The complainant does not provide the specific address but implies that it is readily verifiable as a virtual-office or mail-drop location.

2. Halloran & Pratt Insurance Associates — The complainant makes the same assertions with respect to this entity: absence of valid surplus-lines licenses and use of a virtual-office address rather than a genuine place of business. The complainant treats this entity as functionally identical in nature to Veltrano Risk Advisors.

3. CrestPoint Brokerage LLC — The complainant makes identical assertions regarding this third entity — no valid surplus-lines licenses and a virtual-office address. The use of an LLC structure for this entity is noted, though the complainant does not elaborate on its corporate form or the identity of its members. The complainant estimates that approximately 147 binder confirmations were fabricated or inflated through

IV. Assessment of the Complainant's Specificity and Credibility Indicators A. Indicia of Credibility The complaint demonstrates a notably high degree of specificity across multiple dimensions, which enhances its credibility on its face and distinguishes it from generalized or vague complaints that lack actionable detail. The specific indicia of credibility include the following: • Named individuals: The complaint ide

V. Analysis of Key Factual Questions for Investigation The following discussion identifies the principal factual questions that the investigation will need to address during the scoping phase and, if warranted, during a full investigation. These questions are organized by subject-matter area. A. Existence and Legitimacy of the Three Named Retail Brokers The threshold factual question in the investigation is whether t

VI. Preliminary Assessment of Potential Financial Materiality The alleged aggregate misstatement of approximately $48.1 million must be evaluated against both quantitative and qualitative materiality thresholds to assess whether, if substantiated, the misstatement would be material to QIH's consolidated financial statements and trigger disclosure, restatement, and other obligations. Quantitative Analysis: • As a perc

VII. Regulatory and Legal Exposure Considerations (Preliminary) This section provides a high-level identification and preliminary assessment of the potential regulatory and legal exposure areas implicated by the whistleblower complaint. A more detailed legal-exposure analysis is being prepared separately and will be provided to the Audit Committee as a standalone memorandum in the coming weeks. The following is inten

VIII. Recommended Next Steps Based on the foregoing analysis, the following next steps are recommended for the Audit Committee's consideration and approval. These recommendations are organized into three categories: immediate actions (Week 1), near-term actions (Weeks 2 through 4), and scoping-phase milestones. A. Immediate Actions (Week 1)

1. Document-Preservation / Litigation-Hold Notice: Finalize and issue a comprehensive document-preservation and litigation-hold notice to all relevant custodians at QIH and BSU. The hold notice should cover all categories of documents and electronically stored information ("ESI") potentially relevant to the allegations, including but not limited to binder confirmations, broker-of-record files, commission-income recor

2. Secure Original Complaint File: Obtain and secure the original whistleblower complaint file and attachments from IntegriLine Compliance Services, Inc., including the four-page narrative, the two PDF attachments, and any metadata or submission records maintained by IntegriLine in connection with intake reference number IL-QIH-2026-0214-0033.

3. Organizational Chart and Custodian Identification: Obtain BSU's current organizational chart, reflecting all approximately 120 employees, and identify the initial universe of 8 to 12 custodians for document-hold and document-collection purposes. Custodian identification should be informed by the organizational positions most likely to have had involvement in or awareness of the activities described in the complain

4. Surplus-Lines License Searches: Conduct surplus-lines license database searches in Connecticut, New York, and other relevant jurisdictions for Veltrano Risk Advisors, Halloran & Pratt Insurance Associates, and CrestPoint Brokerage LLC. Results should be documented and provided to the investigation team promptly.

5. Corporate-Registry and Commercial-Database Searches: Conduct corporate-registry searches (Secretary of State filings) and commercial-database searches (Dunmore Enterprises, Sundial Solutions, and similar providers) for the three alleged shell brokers to determine whether they are validly organized entities with legitimate business operations. These searches should be conducted in all fifty states and the District

1. Forensic Advisory Engagement: Finalize the engagement of Claridge Forensic Advisory LLC for forensic accounting and e-discovery support under the direction of Calderwood & Harkness. The proposed engagement lead is Daniel J. Petrov, Managing Director, who has extensive experience in insurance-industry financial investigations. The estimated scoping-support budget for Claridge's services during the initial phase is

2. Commission-Income Ledger Collection: Commence collection of BSU's commission-income ledgers, general-ledger detail, and supporting documentation for FY 2023, FY 2024, and FY 2025, with particular attention to entries associated with the three named broker counterparties.

3. IBNR Reserve Schedule Acquisition: Obtain IBNR reserve schedules, actuarial analyses, and related correspondence from Linden Actuarial Consulting Group (Margaret Y. Cho, FCAS) for the relevant periods (Q3 2023 through Q4 2025), with particular focus on the reserve actions taken in Q4 2024 and Q2 2025.

4. Sample Binder-Confirmation Analysis: Begin forensic analysis of the two sample binder-confirmation PDFs attached to the complaint, including metadata analysis (to the extent not fully redacted by the complainant), content comparison against BSU's brokerage-management and policy-administration systems, and tracing of any associated premium flows in BSU's accounting records.

5. Upjohn Warning Templates: Prepare Upjohn/corporate Miranda warning templates for use in witness interviews. All interviews of current QIH and BSU employees must be preceded by clear warnings that Calderwood & Harkness represents the Audit Committee and the Company, not the individual being interviewed; that the conversation is privileged; and that the privilege belongs to the Company and may be waived by the Compa

6. SEC Disclosure Coordination: Coordinate with Pemberton Hale & Creighton LLP (Elaine R. Foxworth, partner) regarding SEC disclosure timing considerations. In particular, the team should assess whether and when a Form 8-K disclosure may be required in connection with the investigation, and should develop a framework for ongoing disclosure analysis as the investigation progresses. C. Scoping-Phase Milestones The scop

IX. Open Questions and Items Requiring Further Analysis The following is a compilation of the key open questions and items identified throughout this memorandum that require further analysis as the investigation proceeds. This list is not exhaustive but is intended to provide a structured framework for the scoping phase:

1. Can the three named broker counterparties — Veltrano Risk Advisors, Halloran & Pratt Insurance Associates, and CrestPoint Brokerage LLC — be confirmed as fictitious through licensing and corporate-registry searches, or do they have some legitimate existence as real, licensed, an