STANDARD OPERATING PROCEDURE

STANDARD OPERATING PROCEDURE
ADVERTISING REVIEW & FILING
DRAFT — FOR INTERNAL REVIEW AND COMMENT
Prepared by: Calderwood & Harkness LLP 1177 Avenue of the Americas, 34th Floor New York, NY 10036 Matter No. 1025-00002
Prepared for: Quorum Insurance Holdings Corp. 280 Asylum Street, Suite 1400 Hartford, CT 06103
Applicable Entities:
Quorum Indemnity Insurance Company (NAIC No. 41927) Quorum Specialty Underwriters, Inc. (NAIC No. 53812) Quorum Life & Annuity Company (NAIC No. 67403) Pinnacle Bridge MGA, LLC
Draft Date: November 2025 (Phase 2 Deliverable)
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED WORK PRODUCT This document was prepared by Calderwood & Harkness LLP at the direction of Quorum Insurance Holdings Corp. in anticipation of and in connection with regulatory remediation activities. This document is protected by the attorney-client privilege and the work-product doctrine. Do not distribute, copy, or disclose without the express written consent of Derek Mallory, General Counsel & Chief Compliance Officer, Quorum Insurance Holdings Corp.
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SECTION 1: PURPOSE AND SCOPE
1.1 Purpose
The purpose of this Standard Operating Procedure ("SOP") is to establish a centralized, enterprise-wide advertising review and filing procedure to ensure that all marketing and advertising materials disseminated by or on behalf of Quorum Insurance Holdings Corp. ("QIH" or the "Company") and its operating subsidiaries — Quorum Indemnity Insurance Company ("QIIC"), Quorum Specialty Underwriters, Inc. ("QSU"), and Quorum Life & Annuity Company ("QLA") — as well as Pinnacle Bridge MGA, LLC ("Pinnacle Bridge"), comply with all applicable state insurance advertising laws, regulations, bulletins, and directives.
This SOP is being developed and implemented as a direct remediation measure in response to the five (5) advertising-related findings contained in the multi-state market-conduct examination final report issued by the Florida Office of Insurance Regulation ("FL OIR") on May 12, 2025 (the "FL OIR Examination Report"). The FL OIR Examination Report identified forty-three (43) unique non-compliant digital advertising creatives that were disseminated across four states — Florida, California, Illinois, and Ohio — during the period from approximately March 2022 through November 2024. The non-compliant advertisements primarily involved unapproved rate-comparison content placed via digital channels, including Strathmore Systems, Meta Ads Manager, and programmatic display networks.
In addition to remediating the FL OIR examination findings, this SOP addresses the control deficiencies identified in Internal Audit Report No. IA-2025-017, issued by the QIH Internal Audit department on August 4, 2025 (the "Internal Audit Report"). The Internal Audit Report concluded that the Company's prior advertising review procedures were insufficient to prevent the dissemination of non-compliant advertising materials, particularly in the context of digital advertising placed by Pinnacle Bridge MGA, LLC. The Internal Audit Report assigned an overall audit rating of "Unsatisfactory" to the advertising review control environment and recommended, among other things, the adoption of a comprehensive standard operating procedure with enhanced controls for MGA-originated advertising.
This SOP replaces all prior advertising review policies, procedures, and informal review practices that were in effect under the former Quorum Insurance Holdings Corp. compliance manual. In particular, this SOP establishes Pinnacle Bridge MGA-specific workflow requirements designed to close the systemic gap that resulted in thirty-one (31) of the forty-three (43) non-compliant advertisements (representing 72.1% of all non-compliant creatives) being placed by Pinnacle Bridge's in-house marketing team without any routing through the Company's advertising compliance review process.
Upon adoption, this SOP will be incorporated as Chapter III of the Revised Market-Conduct Compliance Manual and will serve as a key deliverable under the Corrective Action Plan submitted to FL OIR on July 1, 2025, and accepted with modifications on July 28, 2025.
1.2 Scope — Applicable Entities
This SOP applies to the following entities within the Quorum Insurance Holdings Corp. corporate family:
Quorum Indemnity Insurance Company ("QIIC")
•  Domicile: Connecticut
•  NAIC Number: 41927
•  Licenses: Licensed in twenty-eight (28) states
•  Lines of Business: Personal automobile, homeowners, and dwelling fire
•  2024 Direct Written Premium ("DWP"): $2.14 billion
•  QIIC was the primary carrier subject to the FL OIR multi-state market-conduct examination covering the period January 1, 2021 through December 31, 2023
Quorum Specialty Underwriters, Inc. ("QSU")
•  Domicile: Texas
•  NAIC Number: 53812
•  Licenses: Licensed in twenty-two (22) states
•  Lines of Business: Commercial general liability, professional liability (errors and omissions), and cyber liability
•  2024 Direct Written Premium: $1.38 billion
•  QSU advertising is placed both directly by QSU's marketing department and through Pinnacle Bridge MGA, which underwrites and binds on behalf of QSU in certain commercial lines markets
Quorum Life & Annuity Company ("QLA")
•  Domicile: Arizona
•  NAIC Number: 67403
•  Licenses: Licensed in nineteen (19) states
•  Lines of Business: Term life, whole life, fixed annuities, and indexed annuities
•  2024 Direct Written Premium: $640 million
•  QLA advertising is subject to distinct regulatory requirements, including state adoptions of NAIC Model Regulation 570 (Advertisements of Life Insurance and Annuities), and is addressed specifically in Section 6.7 and Section 7 of this SOP
Pinnacle Bridge MGA, LLC ("Pinnacle Bridge")
•  Organization: Delaware limited liability company
•  Business Description: Fintech distribution platform; underwrites and binds insurance products on behalf of QIIC and QSU through digital distribution channels
•  Licenses: Licensed as a managing general agent and/or surplus lines broker in thirty-four (34) states
•  2024 Managed Premium Volume: $890 million
•  Pinnacle Bridge operates an in-house marketing team that historically placed digital advertising directly via Strathmore Systems, Meta Ads Manager, and programmatic display channels. The advertising compliance gaps at Pinnacle Bridge were the primary driver of the FL OIR examination findings and are addressed extensively in Section 5 of this SOP
Aggregate Licensing Footprint: Across QIIC, QSU, and QLA, the Company holds seventy-nine (79) total state licenses spanning thirty-eight (38) unique states (28 + 22 + 19 = 69 total, reduced to 38 unique states due to overlapping licenses). Pinnacle Bridge is additionally licensed in thirty-four (34) states as an MGA/surplus lines broker, with significant overlap with the carrier license states. This SOP is designed to address the advertising requirements of all thirty-eight (38) unique states, plus any additional states in which Pinnacle Bridge is licensed where none of the three carriers holds a license.
1.3 Scope — Covered Materials
This SOP applies to all forms of advertising and marketing materials created, commissioned, or disseminated by or on behalf of QIH, QIIC, QSU, QLA, or Pinnacle Bridge, including but not limited to the following:
(a) Print advertisements, including newspaper and magazine placements, inserts, and supplements;
(b) Brochures, flyers, pamphlets, and other printed collateral materials;
(c) Direct mail materials, including letters, postcards, self-mailers, and envelope enclosures;
(d) Television and radio spots, including broadcast, cable, satellite, and streaming audio/video advertisements;
(e) Digital display advertisements, whether placed via programmatic channels (demand-side platforms, real-time bidding networks) or direct publisher placements, in all standard formats (banner, interstitial, native, rich media, and video);
(f) Search engine marketing ("SEM") advertisements, including Strathmore Systems (search, display, Performance Max, Crowne Albany Partners LLC), Northgate Solutions, and other search engine advertising platforms;
(g) Social media advertisements, including paid placements on Meta (Kestrel Services Inc. and Northpoint Services Inc.), Westmark Health IT, X (formerly Fenmore Solutions), Dunmore & Co., and any other social media platform;
(h) Social media organic posts and content that contain product claims, rate information, solicitations, or other content that constitutes advertising under applicable state law;
(i) Email marketing, including promotional emails, newsletters, and drip campaigns;
(j) SMS and text-message marketing;
(k) Website content, including product description pages, landing pages, microsites, and rate-quote pages;
(l) Blog posts and content marketing materials that reference specific insurance products, rates, or features;
(m) Press releases and media communications that contain product promotional content;
(n) Agent- and broker-facing marketing collateral, including sales sheets, product comparison guides, presentation decks, and co-branded materials;
(o) Rate-comparison materials, including any advertisement that compares the insurer's rates, premiums, or costs with those of a competitor;
(p) Testimonials, endorsements, and customer reviews used in advertising;
(q) Infographics, data visualizations, and statistical representations used in marketing materials;
(r) Video content, webinar recordings, podcast episodes, and other audiovisual materials used for promotional purposes; and
(s) Any other communication or material designed to create public interest in any Quorum entity's insurance products or services, or to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy of insurance, regardless of medium or format.
This SOP specifically and expressly covers digital advertisements placed via Strathmore Systems, Meta Ads Manager, and programmatic display channels, as these were the channels through which the forty-three (43) non-compliant advertising creatives identified in the FL OIR Examination Report were disseminated. No channel, platform, or medium is exempt from the requirements of this SOP.
1.4 Effective Date and Superseded Procedures
This SOP shall become effective immediately upon written approval by Derek Mallory, General Counsel and Chief Compliance Officer of Quorum Insurance Holdings Corp. The anticipated effective date is on or about December 1, 2025, coinciding with the completion of Phase 2 (SOP Development) and the commencement of Phase 3 (Training & Implementation) of the remediation program.
Upon its effective date, this SOP supersedes and replaces the following:
(a) All prior advertising review policies contained in the former Quorum Insurance Holdings Corp. Compliance Manual (last revised March 2021);
(b) All informal advertising review practices and procedures in effect at QIIC, QSU, QLA, or any other QIH subsidiary;
(c) Any advertising review procedures or guidelines in effect at Pinnacle Bridge MGA, LLC, whether written or unwritten;
(d) Any oral or written understandings, memoranda, or protocols regarding advertising review between Pinnacle Bridge and any Quorum subsidiary; and
(e) Any prior delegations of advertising approval authority, except as expressly provided in this SOP.
This SOP shall be incorporated as Chapter III of the Revised Market-Conduct Compliance Manual, which is being developed concurrently as part of the broader remediation program. To the extent any provision of this SOP conflicts with another provision of the Revised Market-Conduct Compliance Manual, the provisions of this SOP shall control with respect to advertising review and filing matters.
SECTION 2: DEFINITIONS
2.1 Key Terms
For purposes of this SOP, the following terms shall have the meanings set forth below. Where a term defined herein is also defined under applicable state law or regulation, the state-law definition shall control to the extent it is broader than the definition set forth in this SOP.
"ACF" — See "Advertising Compliance Function."
"Advertisement" or "Advertising" — Any communication or material, regardless of medium or format, used to create public interest in an insurer, its products, or its services, or to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy of insurance. This definition is intended to be broadly construed, consistent with the definition of "advertisement" under NAIC Model Regulation 570 (Advertisements of Life Insurance and Annuities), NAIC Model Regulation 570-1 (Rules Governing Advertisements of Accident and Sickness Insurance), and applicable state insurance advertising statutes and regulations. The term includes, without limitation, all categories of materials listed in Section 1.3 of this SOP.
"Advertising Compliance Function" or "ACF" — The centralized review unit within Quorum Insurance Holdings Corp., housed within the Market Conduct & Consumer Affairs department, that is responsible for reviewing and approving all advertising prior to publication and for managing state advertising filing obligations. The ACF is led by Lena Fujimoto, Director, Market Conduct & Consumer Affairs, who has final authority to approve, require modifications to, or reject advertising materials submitted for review. The ACF serves as the single point of contact with state insurance departments on advertising matters and maintains the master register of state-specific filing requirements.
"Approved" — A determination by the ACF that an advertising material has passed substantive compliance review and may proceed to filing (if required by state law) and publication, without modification.
"Approved with Modifications" — A determination by the ACF that an advertising material requires specified changes before it may proceed to filing and/or publication. The Originating Unit must implement the required modifications and resubmit the revised material to the ACF for confirmation before the material may be published.
"CAP" — See "Corrective Action Plan."
"Compliance Incident" — Any event involving the publication of advertising without ACF approval, a regulatory objection to filed advertising, a discovery of non-compliant advertising content, or any other breach of this SOP, as more fully described in Section 9.4.
"Corrective Action Plan" or "CAP" — The corrective action plan submitted by QIIC to the Florida Office of Insurance Regulation on July 1, 2025, and accepted by FL OIR with modifications on July 28, 2025, setting forth the remediation steps to be completed by December 31, 2025, in response to the findings of the multi-state market-conduct examination.
"Digital Advertisement" — Any advertisement disseminated through electronic or internet-based channels, including but not limited to search engine marketing platforms (Strathmore Systems, Northgate Solutions), display advertising networks (programmatic and direct), social media platforms (Meta/Kestrel Services Inc./Northpoint Services Inc., Westmark Health IT, Westvale Solutions, Dunmore & Co.), email, SMS, mobile applications, websites, landing pages, and streaming audio/video platforms.
"File-and-Use State" — A state that requires the filing of advertising materials with the state department of insurance at or before the time of first use, but does not require prior approval from the regulator before publication. Specific File-and-Use States are identified in Appendix C.
"Filing" — The formal submission of advertising materials to a state department of insurance for review, approval, and/or retention, as required by applicable state law. The term encompasses prior-approval submissions, file-and-use submissions, and use-and-file submissions.
"FL OIR" — The Florida Office of Insurance Regulation.
"FL OIR Examination Report" — The multi-state market-conduct examination final report issued by the Florida Office of Insurance Regulation on May 12, 2025, covering the examination period of January 1, 2021 through December 31, 2023, which identified five (5) advertising-related findings and forty-three (43) unique non-compliant digital advertising creatives.
"Internal Audit Report" — Internal Audit Report No. IA-2025-017, issued by the QIH Internal Audit department on August 4, 2025, relating to control deficiencies in advertising oversight.
"Managing General Agent" or "MGA" — An entity authorized by an insurer to underwrite and bind insurance on behalf of the insurer, subject to the terms of a managing general agent agreement. Pinnacle Bridge MGA, LLC is the sole MGA within the Quorum Insurance Holdings Corp. corporate family.
"NAIC" — The National Association of Insurance Commissioners.
"No-Filing State" — A state that does not require the filing of advertising materials with the state department of insurance, but retains regulatory authority to review, object to, and take enforcement action regarding advertising materials at any time, including during market-conduct examinations. Specific No-Filing States are identified in Appendix C.
"Originating Unit" — The business unit, department, or team that creates, commissions, or initiates the development of an advertising material. Originating Units include, without limitation, the marketing departments of QIIC, QSU, and QLA; the in-house marketing team of Pinnacle Bridge MGA, LLC; and any external advertising agency, creative vendor, or media-buying firm engaged by any of the foregoing.
"Pinnacle Bridge Advertising Compliance Liaison" — The individual designated by Pinnacle Bridge MGA, LLC to serve as the single point of submission to the ACF for all Pinnacle Bridge advertising materials, as more fully described in Section 5.3.
"Prior-Approval State" — A state that requires advertising materials to be filed with and approved by the state department of insurance before first use or publication. Specific Prior-Approval States are identified in Appendix C.
"QIH" — Quorum Insurance Holdings Corp.
"QIIC" — Quorum Indemnity Insurance Company (NAIC No. 41927).
"QLA" — Quorum Life & Annuity Company (NAIC No. 67403).
"QSU" — Quorum Specialty Underwriters, Inc. (NAIC No. 53812).
"Rate Comparison" — Any advertisement or portion of an advertisement that compares the insurer's rates, premiums, costs, or value with those of one or more competing insurers, whether the comparison is express or implied, numerical or descriptive. Rate-comparison advertisements are specifically flagged in this SOP because they were the primary subject matter of the five (5) advertising-related findings in the FL OIR Examination Report and are subject to enhanced review controls under Section 7.2.
"Rejected" — A determination by the ACF that an advertising material does not comply with applicable regulatory requirements and may not be published. The Originating Unit may resubmit the material after addressing the deficiencies identified by the ACF.
"SOP" — This Standard Operating Procedure — Advertising Review & Filing.
"Use-and-File State" — A state that permits the use of advertising materials prior to filing with the state department of insurance, but requires the filing of such materials within a specified number of days (typically thirty (30) days) after first use. Specific Use-and-File States are identified in Appendix C.
SECTION 3: GOVERNANCE AND ROLES & RESPONSIBILITIES
3.1 Advertising Compliance Function (ACF) — Centralized Review Authority
All advertising for any Quorum subsidiary (QIIC, QSU, or QLA) or Pinnacle Bridge MGA, LLC must be reviewed and approved by the Advertising Compliance Function ("ACF") before publication, placement, or dissemination, without exception. No advertising material may be published, uploaded to any advertising platform, or otherwise made available to the public unless and until the ACF has issued a written determination of "Approved" or "Approved with Modifications" (with all required modifications having been implemented and confirmed).
The ACF is led by Lena Fujimoto, Director, Market Conduct & Consumer Affairs, who has final authority to approve, require modifications to, or reject advertising materials submitted for review under this SOP. Ms. Fujimoto's authority in this regard is delegated by Derek Mallory, General Counsel & Chief Compliance Officer, and may not be overridden by any marketing, sales, or business-unit personnel.
The ACF is responsible for the following functions:
(a) Receiving, logging, and reviewing all advertising submissions from Originating Units;
(b) Conducting substantive compliance reviews of advertising materials against all applicable state insurance advertising laws, regulations, bulletins, and directives for each target state;
(c) Issuing written determinations (Approved, Approved with Modifications, or Rejected) for each submission;
(d) Maintaining a comprehensive register of all state-specific advertising filing requirements, updated no less frequently than quarterly and promptly upon receipt of notice of any regulatory change;
(e) Monitoring regulatory updates, including new legislation, regulatory bulletins, enforcement actions, and examination trends affecting advertising compliance;
(f) Preparing and submitting advertising filings to state insurance departments as required under applicable state law;
(g) Tracking the status of pending filings and communicating approvals, objections, or modifications from state regulators to the relevant Originating Unit;
(h) Serving as the single point of contact with state insurance departments on all advertising-related matters, including regulatory inquiries, filing questions, and examination requests;
(i) Conducting ongoing monitoring, quarterly testing, and reconciliation activities as described in Section 9 of this SOP;
(j) Maintaining complete and accurate records of all advertising review and filing activities in auditable format, as described in Section 8 of this SOP; and
(k) Reporting on advertising compliance metrics and key performance indicators to the VP, Regulatory Affairs and the General Counsel & CCO.
ACF Staffing. The ACF shall be staffed with a minimum of three (3) full-time employees, consisting of Lena Fujimoto and at least two (2) designated compliance analysts dedicated to advertising review. Additional staffing resources may be allocated as needed based on volume, regulatory developments, or examination preparation requirements. Staffing adequacy shall be reviewed annually as part of the SOP maintenance process described in Section 12.
3.2 SOP Owner
Lena Fujimoto, Director, Market Conduct & Consumer Affairs, is the designated owner of this SOP. As SOP Owner, Ms. Fujimoto is responsible for the day-to-day maintenance, updating, interpretation, and enforcement of this SOP. Ms. Fujimoto reports to Priya Venkatesh, Vice President, Regulatory Affairs, who in turn reports to Derek Mallory, General Counsel & Chief Compliance Officer.
The SOP Owner's specific responsibilities include:
(a) Ensuring that the ACF operates in accordance with this SOP at all times;
(b) Proposing amendments to this SOP as needed in response to regulatory changes, examination findings, compliance incidents, or operational improvements;
(c) Coordinating with subsidiary marketing departments and the Pinnacle Bridge Advertising Compliance Liaison to ensure understanding of and compliance with this SOP;
(d) Reporting advertising compliance metrics and key performance indicators to the VP, Regulatory Affairs on a monthly basis and to the General Counsel & CCO on a quarterly basis;
(e) Overseeing the training program described in Section 10 of this SOP; and
(f) Ensuring examination-readiness of advertising files at all times, as described in Section 11 of this SOP.
3.3 Executive Sponsor
Derek Mallory, General Counsel & Chief Compliance Officer, serves as the Executive Sponsor of this SOP and bears ultimate accountability for advertising compliance across all QIH entities. As Executive Sponsor, Mr. Mallory is responsible for:
(a) Approving this SOP and any substantive amendments thereto;
(b) Ensuring adequate resources (personnel, technology, and budget) are allocated to the ACF;
(c) Escalating material advertising compliance issues to the Chief Executive Officer, Vivian Trask, and to the QIH Board Audit & Compliance Committee, chaired by Margaret Aldworth, as appropriate;
(d) Overseeing the Company's relationship with outside counsel on advertising compliance and regulatory remediation matters;
(e) Approving any responses to state regulatory inquiries or enforcement actions relating to advertising, following coordination with the VP, Regulatory Affairs and the ACF; and
(f) Certifying compliance with the Corrective Action Plan to FL OIR as required.
3.4 Regulatory Affairs Liaison
Priya Venkatesh, Vice President, Regulatory Affairs, serves as the Regulatory Affairs Liaison for advertising compliance matters. Ms. Venkatesh is responsible for:
(a) Coordinating with state insurance regulators on advertising filing submissions, responses to regulatory inquiries, and examination-related advertising matters;
(b) Managing the Company's relationship with Florida local counsel, Cartwright & Eddings, P.A. (contact: Rosa Delacroix, Esq., 301 East Pine Street, Suite 750, Orlando, FL 32801), and coordinating with other state-specific counsel as needed;
(c) Reviewing and authorizing regulatory responses before submission, in coordination with Derek Mallory and outside counsel;
(d) Receiving escalated compliance issues from the ACF and determining whether outside legal counsel is required;
(e) Authorizing expedited review requests as described in Section 4.4; and
(f) Monitoring regulatory developments that may affect advertising filing requirements and communicating such developments to the ACF.
3.5 Operating Subsidiary Marketing Departments
Each operating subsidiary's marketing department — including the marketing teams of QIIC, QSU, and QLA — is an Originating Unit under this SOP. The head of each subsidiary's marketing department is responsible for ensuring that all personnel within the department are trained on and comply with this SOP.
The following requirements apply to all subsidiary marketing departments:
(a) All advertising materials must be submitted to the ACF for review prior to publication, in accordance with the submission requirements set forth in Section 4.1;
(b) No subsidiary marketing team is authorized to publish, disseminate, place, or otherwise make available to the public any advertising material without the ACF's prior written approval;
(c) Each subsidiary marketing department shall designate a primary contact for advertising compliance communications with the ACF;
(d) Each subsidiary marketing department shall maintain records of all advertising submissions and ACF determinations, which shall be made available to the ACF upon request; and
(e) Each subsidiary marketing department shall promptly notify the ACF of any post-approval modifications to advertising materials, any new advertising channels or platforms being considered, and any direct communications received from state regulators regarding advertising.
3.6 Pinnacle Bridge MGA, LLC — Special Requirements
Pinnacle Bridge MGA, LLC is subject to all requirements of this SOP applicable to Originating Units, as well as the additional specialized requirements set forth in this Section 3.6 and in Section 5 of this SOP. These additional requirements are necessary to address the systemic advertising compliance gap identified in the FL OIR Examination Report and the Internal Audit Report.
As noted in Section 1.1, thirty-one (31) of the forty-three (43) non-compliant digital advertising creatives identified in the FL OIR Examination Report — representing 72.1% of all non-compliant creatives — were placed by Pinnacle Bridge's in-house marketing team without being routed through any advertising compliance review process. The Internal Audit Report confirmed that, during the examination period, Pinnacle Bridge operated without a formal advertising review procedure and maintained independent, unsupervised access to digital advertising platform accounts (Strathmore Systems, Meta Business Manager, and programmatic demand-side platforms).
The following special requirements apply to Pinnacle Bridge:
(a) Pinnacle Bridge's in-house marketing team must route one hundred percent (100%) of advertising materials through the ACF before placement, without exception;
(b) A designated Pinnacle Bridge Advertising Compliance Liaison shall be appointed by Pinnacle Bridge to serve as the single point of submission to the ACF and to maintain a pre-submission checklist for each advertising submission (see Section 5.3 for detailed requirements);
(c) Pinnacle Bridge is prohibited from contracting directly with digital advertising platforms — including Severin Industries, Meta, programmatic demand-side platforms, and any other platform — for the placement of insurance-product advertising without prior ACF approval of each creative and each media plan;
(d) Pinnacle Bridge must implement technical access controls on its advertising platform accounts requiring dual authorization before any advertising creative can move from draft to active or live status, with one authorizer being the Pinnacle Bridge Advertising Compliance Liaison confirming ACF approval (see Section 5.4);
(e) Pinnacle Bridge must provide monthly reconciliation reports to the ACF, as described in Section 5.5; and
(f) Pinnacle Bridge personnel are subject to the training requirements set forth in Section 10, including a Pinnacle Bridge-specific training module addressing the workflow gaps that led to the thirty-one (31) non-compliant advertisements.
3.7 External Agencies and Vendors
Any third-party advertising agency, creative vendor, media-buying firm, public relations firm, or other external party engaged by any Quorum subsidiary or Pinnacle Bridge to create, produce, or place advertising materials is subject to the requirements of this SOP through the applicable Originating Unit. Specifically:
(a) External agencies and vendors must submit all advertising materials through the Originating Unit to the ACF for review and approval before production, placement, or publication;
(b) No external agency or vendor is authorized to publish or place advertising on behalf of any Quorum entity without confirmation that the ACF has approved the specific creative and media plan;
(c) All contracts and statements of work with external advertising agencies, creative vendors, and media-buying firms must include advertising-compliance clauses substantially in the form set forth in Appendix D of this SOP. These clauses shall require, at a minimum, that the agency or vendor: (i) submit all materials through the Originating Unit to the ACF before publication; (ii) comply with all state insurance advertising regulations applicable to the materials; (iii) refrain from modifying approved materials without re-submission and re-approval; and (iv) cooperate with regulatory examinations and audits; and
(d) Existing contracts with external agencies and vendors that do not include the required advertising-compliance clauses shall be amended within ninety (90) days of the effective date of this SOP to incorporate such clauses.
3.8 Claims Operations and Underwriting Personnel
Thomas Raeburn, Senior Vice President, Claims Operations, is not directly involved in the advertising review and filing process. However, the ACF shall consult with Mr. Raeburn or his designee in connection with the review of any advertising material that references or makes representations about claims-handling commitments, claims-processing service-level guarantees, claims turnaround times, or the claims experience. Similarly, the ACF shall consult with the applicable subsidiary's underwriting leadership if an advertising material references underwriting criteria, approval rates, or binding authority.
Claims operations and underwriting personnel who create or disseminate materials that may constitute advertising — including customer-facing communications, explanations of claims decisions, or underwriting guidelines shared with agents — shall comply with the awareness training requirements set forth in Section 10.3.
3.9 External Auditor and Consultant Coordination
The ACF shall cooperate with requests for advertising compliance data, documentation, and metrics from the following external parties:
(a) Ridgeline Consulting Group, LLC (Sandra Whitfield, Managing Director) — Ridgeline has been retained as an independent market-conduct consulting firm and may periodically benchmark advertising compliance metrics, review ACF procedures, or conduct independent testing as part of its broader consulting engagement. The ACF shall provide Ridgeline with timely access to advertising records, testing results, and KPI data upon request.
(b) Voss Kendrick & Associates, CPA, PLLC (Frank Castellano, Engagement Partner) — Voss Kendrick serves as the statutory auditor for QIIC, QSU, and QLA. In the course of performing annual statutory audit procedures, Voss Kendrick may review advertising-related regulatory filings, compliance records, and internal controls. The ACF shall maintain advertising records in auditable format and shall cooperate fully with any advertising-related audit procedures conducted by Voss Kendrick.
All disclosures to external auditors and consultants shall be coordinated through the VP, Regulatory Affairs and, where attorney-client privilege considerations are implicated, through outside counsel at Calderwood & Harkness LLP.
SECTION 4: ADVERTISING REVIEW WORKFLOW — GENERAL PROCEDURES
4.1 Submission Requirements
All advertising materials must be submitted to the ACF for review and approval before publication, placement, or dissemination. The following submission requirements apply to all Originating Units, including subsidiary marketing departments, Pinnacle Bridge MGA, and external agencies (through their respective Originating Units).
Timing of Submissions.
(a) Standard Submissions. All advertising materials must be submitted to the ACF at least fifteen (15) business days before the intended publication, placement, or launch date. This timeline is designed to allow sufficient time for ACF intake, preliminary screening, substantive review, and any necessary communications with the Originating Unit regarding modifications.
(b) Prior-Approval State Submissions. For advertising materials intended for dissemination in Prior-Approval States, submissions must be made to the ACF at least thirty (30) business days before the intended publication date. This extended timeline is necessary to accommodate the ACF's internal review process plus the time required for the ACF to prepare and submit the regulatory filing and for the state regulator to complete its review and issue approval.
(c) Expedited Submissions. Expedited review is available in limited circumstances as described in Section 4.4.
Submission Method. Submissions shall be made through the designated compliance management system. Until such time as the compliance management system is fully operational and integrated with all Originating Units, submissions may be made via email to the dedicated ACF inbox (the address of which is provided in Appendix E). The ACF will communicate the transition date from email-based submissions to system-based submissions with no fewer than thirty (30) days' advance notice.
Required Submission Materials. Each submission to the ACF must include all of the following:
(a) The final creative in all formats in which it will be produced or published, including print-ready files, digital mockups or screenshots of all sizes and variations, scripts for audio and video content, and any other format-specific deliverables;
(b) A completed Advertising Submission Form, substantially in the form set forth in Appendix A of this SOP, which captures the key information necessary for the ACF to conduct its review;
(c) Identification of all target states in which the advertisement is intended to be disseminated, including any states in which the advertisement may be incidentally served through programmatic or algorithmic targeting;
(d) Identification of the Originating Unit and the individual submitter;
(e) Identification of the applicable subsidiary or subsidiaries (QIIC, QSU, and/or QLA) and the specific product line or lines referenced in the advertisement;
(f) Any supporting rate data, statistical references, actuarial analyses, or third-party data sources cited in or relied upon by the advertisement, with full source documentation;
(g) Identification of all media channels and platforms through which the advertisement will be placed, including specific platform names (e.g., Strathmore Systems — Search, Meta Ads Manager — Kestrel Services Inc. Feed), publisher names for direct placements, and any programmatic network identifiers;
(h) Intended campaign start and end dates; and
(i) For Pinnacle Bridge submissions, a completed Pinnacle Bridge Advertising Pre-Submission Checklist, substantially in the form set forth in Appendix B of this SOP.
Incomplete Submissions. Submissions that are materially incomplete — including submissions that lack required creative files, target-state identification, or supporting data for rate comparisons — will be returned to the Originating Unit without review. The ACF will notify the Originating Unit of the deficiency within two (2) business days of receipt. The submission timeline will restart upon receipt of a complete submission.
4.2 ACF Review Process
Upon receipt of a complete submission, the ACF shall conduct its review in accordance with the following sequential steps:
Step 1 — Intake and Logging. Upon receipt of a submission, the ACF shall:
(a) Log the submission in the compliance management system (or, pending system implementation, in the ACF tracking log);
(b) Assign a unique tracking number to the submission, which shall be used in all subsequent communications and records relating to the submission;
(c) Confirm receipt to the Originating Unit, including the assigned tracking number, within one (1) business day of receipt; and
(d) Identify whether the submission is a standard submission (fifteen (15) business day timeline) or a prior-approval state submission (thirty (30) business day timeline) and communicate the applicable timeline to the Originating Unit.
Step 2 — Preliminary Screening. Within three (3) business days of intake, the ACF shall conduct a preliminary screening of the submission to identify obvious regulatory red flags, including but not limited to:
(a) Unapproved or unsubstantiated rate comparisons;
(b) Misleading, deceptive, or ambiguous language;
(c) Missing or inadequate disclosures, disclaimers, or insurer identification;
(d) State-specific prohibitions on certain advertising content or methods;
(e) References to unlicensed products or products not available in the target states;
(f) Inconsistencies between the advertisement and filed policy forms or rate filings; and
(g) Use of testimonials, endorsements, or statistical claims that lack adequate substantiation.
If the preliminary screening identifies material issues that are likely to require substantial revision, the ACF may, at its discretion, notify the Originating Unit of the preliminary findings and recommend that the Originating Unit revise and resubmit the material before the ACF invests resources in a full substantive review. This preliminary notification does not constitute a formal determination and does not stop the review timeline.
Step 3 — Substantive Review. Following the preliminary screening, the ACF shall conduct a comprehensive substantive compliance review of the advertising material against the legal and regulatory requirements of every target state. The substantive review shall include, at a minimum, verification that:
(a) The advertisement does not contain unfair, misleading, or deceptive statements or representations, as those terms are defined under applicable state insurance advertising statutes and regulations;
(b) Rate comparisons, if any, comply with all state-specific requirements in each target state, with particular attention to the requirements of Florida, California, Illinois, and Ohio — the four states identified in the FL OIR Examination Report as having advertising findings;
(c) All required disclosures, disclaimers, and insurer identification elements are present and correctly stated, including the insurer's full legal name (or approved trade name), NAIC number, and domiciliary state;
(d) The advertisement complies with all state-specific form and content requirements for the applicable line of business (personal lines, commercial lines, or life and annuity);
(e) For QLA materials, the advertisement complies with annuity advertising standards, including the requirements of applicable state adoptions of NAIC Model Regulation 570, suitability disclosure requirements, and any state-specific requirements regarding the depiction of annuity interest rates, index performance, or surrender charges;
(f) The advertisement does not make claims or representations that are inconsistent with the filed policy forms or rate filings for the applicable product;
(g) Testimonials, endorsements, and customer reviews, if used, are genuine, representative, and presented in compliance with applicable state regulations;
(h) The advertisement does not contain guarantees of future results, returns, or performance that are not supported by the contract terms of the applicable product;
(i) The advertisement is consistent with any outstanding regulatory orders, consent agreements, or corrective action plan commitments; and
(j) For digital advertisements, the advertisement complies with the digital-specific content standards set forth in Section 7.4 of this SOP.
Step 4 — Determination. Upon completion of the substantive review, the ACF shall issue one of the following three written determinations:
(a) Approved — The advertising material complies with applicable regulatory requirements and may proceed to filing (if required by state law) and publication. The ACF's approval is documented with the date, the reviewing analyst's name, and the tracking number.
(b) Approved with Modifications — The advertising material requires specified changes before it may proceed to filing and/or publication. The ACF's determination shall include a detailed description of each required modification, with citations to the applicable regulatory requirement. The Originating Unit must implement all required modifications and resubmit the revised material to the ACF for confirmation. The ACF shall review the revised material and confirm compliance within three (3) business days of receipt. The advertisement may not be published or filed until the ACF has confirmed that all modifications have been properly implemented.
(c) Rejected — The advertising material does not comply with applicable regulatory requirements and may not be published. The ACF's determination shall include a detailed explanation of the basis for rejection, with citations to the applicable regulatory requirements. The Originating Unit may resubmit the material after addressing the identified deficiencies, and such resubmission shall be treated as a new submission for purposes of the review timeline.
Step 5 — Documentation. The ACF shall document the entire review process in the compliance management system, including:
(a) A copy of the original submission and all associated materials;
(b) The preliminary screening notes;
(c) The substantive review analysis, including the regulatory requirements reviewed and the basis for the determination;
(d) The formal written determination;
(e) All communications with the Originating Unit, including requests for additional information, modification instructions, and resubmission confirmations;
(f) Records of any escalation to Lena Fujimoto, Priya Venkatesh, Derek Mallory, or outside counsel; and
(g) Records of state filing submissions and regulatory responses, if applicable.
All documentation shall be retained in accordance with the record-retention requirements set forth in Section 8 of this SOP.
4.3 Escalation
The ACF's review process includes a structured escalation framework to ensure that complex or high-risk compliance issues are addressed at the appropriate level of authority:
Level 1 — ACF Reviewer Escalation to SOP Owner. If the ACF compliance analyst conducting the review identifies a material compliance issue that cannot be resolved at the reviewer level — including ambiguities in state regulatory requirements, novel advertising formats or channels not previously addressed, or potential conflicts between the requirements of multiple target states — the matter shall be escalated to Lena Fujimoto for determination. Ms. Fujimoto shall review the issue, consult applicable regulatory guidance, and issue a determination or, if necessary, escalate the matter to Level 2.
Level 2 — Escalation to VP, Regulatory Affairs and/or General Counsel. If Ms. Fujimoto determines that a legal interpretation is required, that the matter involves significant regulatory risk, or that outside counsel should be consulted, the matter shall be escalated to Priya Venkatesh, VP, Regulatory Affairs. Ms. Venkatesh shall evaluate the matter and, if necessary, escalate it to Derek Mallory, General Counsel & CCO, or engage outside counsel (Calderwood & Harkness LLP, or applicable state-specific local counsel) for guidance.
Level 3 — Board-Level Reporting. If the matter involves a material regulatory risk, a potential enforcement action, or a matter that could affect the Company's standing with state regulators or its compliance with the Corrective Action Plan, Derek Mallory shall determine whether reporting to the QIH Board Audit & Compliance Committee (chaired by Margaret Aldworth) is required.
Mandatory Escalation — Rate Comparisons in Focus States. Notwithstanding the foregoing general escalation framework, any advertisement that includes rate comparisons and is targeted for dissemination in Florida, California, Illinois, or Ohio must receive Lena Fujimoto's personal sign-off before the advertisement may be approved, filed, or published. This mandatory escalation requirement reflects the fact that rate-comparison advertisements in these four states were the primary subject of the five (5) advertising-related findings in the FL OIR Examination Report.
4.4 Expedited Review
In limited and exceptional circumstances, an Originating Unit may request that the ACF conduct an expedited review of an advertising submission. Expedited review is intended to accommodate genuinely time-sensitive situations and is not available as a routine alternative to the standard review timeline.
Eligible Circumstances. Expedited review may be requested in the following circumstances:
(a) Time-sensitive regulatory filings or mandatory notices that must be published within a compressed timeframe;
(b) Competitive-response advertising that must be placed within a narrow window to address a material competitive development;
(c) Catastrophe-related notices, policyholder communications, or public-safety announcements that require immediate publication; and
(d) Other circumstances that the VP, Regulatory Affairs, determines, in her sole discretion, to constitute a genuine exigency.
Authorization. A request for expedited review must be submitted in writing (including email) by the head of the Originating Unit and must be approved in writing by Priya Venkatesh, VP, Regulatory Affairs, before the ACF will begin an expedited review. The request must include a brief explanation of the basis for expedited review and the requested publication date.
Expedited Review Timeline. Expedited review will target a five (5) business day turnaround from the date of complete submission to issuance of a determination. The ACF will use commercially reasonable efforts to meet this timeline but cannot guarantee it in all cases, particularly for complex submissions or submissions involving multiple target states.
Prior-Approval State Exclusion. Expedited review is not available for advertising materials intended for dissemination in Prior-Approval States. State regulatory timelines for prior-approval filings cannot be compressed by the ACF, and the ACF will not approve the publication of advertising in a Prior-Approval State before regulatory approval has been obtained.
Documentation. The ACF shall document all expedited review requests, authorizations, and outcomes. The use of expedited review shall be tracked as a key performance indicator and reported to the VP, Regulatory Affairs on a quarterly basis.
SECTION 5: PINNACLE BRIDGE MGA — SPECIALIZED ADVERTISING WORKFLOW
5.1 Background and Rationale
Pinnacle Bridge MGA, LLC operates as Quorum's fintech distribution platform, underwriting and binding insurance products on behalf of QIIC and QSU through digital distribution channels across thirty-four (34) states. As a digitally native distribution platform, Pinnacle Bridge relies heavily on digital advertising channels to acquire customers, including Strathmore Systems (search, display, and Crowne Albany Partners LLC), Meta Ads Manager (Kestrel Services Inc. and Northpoint Services Inc.), programmatic display networks, and email marketing.
During the FL OIR multi-state market-conduct examination covering the period January 1, 2021 through December 31, 2023, the examiners identified forty-three (43) unique non-compliant digital advertising creatives disseminated across Florida, California, Illinois, and Ohio. Of these forty-three (43) non-compliant advertisements, thirty-one (31) — representing 72.1% of all non-compliant creatives — were traced directly to Pinnacle Bridge's in-house marketing team.
Investigation during the examination and subsequent internal audit revealed that the thirty-one (31) Pinnacle Bridge advertisements were placed directly by Pinnacle Bridge marketing personnel via Strathmore Systems, Meta Ads Manager, and programmatic display channels without any submission to, review by, or approval from QIIC's advertising compliance function. The non-compliant advertisements included unapproved rate comparisons in digital advertisements disseminated across the four identified states over a period of approximately thirty-two (32) months, from approximately March 2022 through November 2024.
The root cause of this systemic failure, as identified in the Internal Audit Report, was threefold: (i) Pinnacle Bridge's in-house marketing team operated without a formal advertising review procedure; (ii) Pinnacle Bridge maintained independent, unsupervised access to digital advertising platform accounts with the ability to publish advertisements without any compliance checkpoint; and (iii) the MGA agreement between QIIC/QSU and Pinnacle Bridge did not include adequate advertising compliance provisions or audit rights.
This Section 5 establishes mandatory controls specifically designed to prevent the recurrence of unapproved advertising by Pinnacle Bridge and to integrate Pinnacle Bridge fully into the centralized ACF review process.
5.2 Mandatory Pre-Submission to ACF
Pinnacle Bridge may not publish, place, upload, activate, or otherwise disseminate any advertisement relating to insurance products underwritten by QIIC or QSU without prior written approval from the ACF. This prohibition is absolute and applies regardless of the advertising channel, format, or target audience.
Without limiting the generality of the foregoing, this requirement applies to all of the following channels and formats:
(a) Strathmore Systems, including search campaigns, display campaigns, Performance Max campaigns, Crowne Albany Partners LLC video campaigns, and discovery campaigns;
(b) Meta Ads Manager, including Kestrel Services Inc. Feed, Northpoint Services Inc. Feed, Northpoint Services Inc. Stories, Reels, Audience Network, and Messenger placements;
(c) Programmatic display networks, including all demand-side platform (DSP) campaigns, regardless of the DSP used;
(d) Social media organic posts and content that contain product claims, rate information, competitive comparisons, or solicitations;
(e) Email marketing campaigns, including promotional emails, newsletters, drip campaigns, and re-engagement campaigns;
(f) SMS and text-message marketing campaigns;
(g) Website content published on Pinnacle Bridge-owned or Pinnacle Bridge-managed websites, microsites, and landing pages;
(h) Blog posts, articles, and content marketing materials published by or on behalf of Pinnacle Bridge; and
(i) Any other medium, channel, or format through which Pinnacle Bridge communicates with the public regarding insurance products.
For purposes of this Section 5.2, "publication" includes the uploading of creative assets to any advertising platform, even if the creative is placed in draft, paused, or inactive status. No creative asset may be uploaded to any advertising platform without prior ACF approval, as the Internal Audit Report identified instances in which Pinnacle Bridge marketing personnel uploaded "draft" creatives that were subsequently activated without compliance review.
5.3 Pinnacle Bridge Advertising Compliance Liaison
Pinnacle Bridge shall designate a named individual to serve as the Pinnacle Bridge Advertising Compliance Liaison (the "Liaison"). The Liaison shall be a Pinnacle Bridge employee at the manager level or above, with direct reporting authority over the Pinnacle Bridge marketing team or, alternatively, a compliance professional embedded within Pinnacle Bridge. The Liaison's name and contact information shall be communicated to the ACF within five (5) business days of the effective date of this SOP, and any change in the Liaison designation shall be communicated to the ACF within two (2) business days.
The Pinnacle Bridge Advertising Compliance Liaison shall be responsible for the following:
(a) Collecting all proposed advertising materials from the Pinnacle Bridge marketing team before any creative development is finalized;
(b) Completing the Pinnacle Bridge Advertising Pre-Submission Checklist (Appendix B) for each advertising submission, which includes certifications that: (i) the creative has not been uploaded to any advertising platform; (ii) all target states have been identified; (iii) supporting data for any rate comparisons or statistical claims has been compiled; and (iv) the submission is complete and ready for ACF review;
(c) Submitting all advertising materials to the ACF at least fifteen (15) business days before the intended launch date (or thirty (30) business days for Prior-Approval States), in accordance with the submission requirements of Section 4.1;
(d) Confirming ACF approval — by verifying the ACF's written "Approved" determination and tracking number — before authorizing the Pinnacle Bridge marketing team to upload creative assets to any advertising platform or place any advertisement;
(e) Serving as one of the two required authorizers for the dual-authorization platform access controls described in Section 5.4;
(f) Maintaining a comprehensive log of all Pinnacle Bridge advertising submissions and ACF determinations, including tracking numbers, submission dates, determination dates, and determination outcomes;
(g) Conducting the monthly reconciliation described in Section 5.5; and
(h) Participating in training as described in Section 10, including the Pinnacle Bridge-specific training module.
5.4 Platform Access Controls
To prevent the unauthorized publication of advertising by Pinnacle Bridge personnel, Pinnacle Bridge must implement and maintain technical access controls on all advertising platform accounts, including Strathmore Systems accounts, Meta Business Manager accounts, and any programmatic demand-side platform accounts. The following controls are required:
(a) Dual Authorization Requirement. Before any advertising creative can be moved from draft or paused status to active or live status on any advertising platform, dual authorization from two designated individuals must be obtained. One of the two authorizers must be the Pinnacle Bridge Advertising Compliance Liaison, who shall confirm ACF approval before providing authorization.
(b) Role-Based Access. Platform account access shall be structured using role-based access controls that limit publishing permissions to designated individuals. Marketing team members responsible for creative development may have "drafting" or "editor" access, but may not have "publisher" or "campaign manager" access that permits activation of advertisements.
(c) Access Roster. Pinnacle Bridge shall maintain a current roster of all individuals with access to advertising platform accounts, specifying each individual's role and access level. This roster shall be provided to the ACF upon request and shall be updated within two (2) business days of any change in personnel or access levels.
(d) Quarterly Access Reviews. On a quarterly basis, the ACF shall conduct a review of Pinnacle Bridge's advertising platform access controls. This review shall verify that: (i) the dual-authorization requirement remains in effect; (ii) no unauthorized users have publishing permissions; (iii) the access roster is current and accurate; and (iv) no advertisements have been activated without dual authorization. Pinnacle Bridge shall cooperate fully with these quarterly reviews, including providing the ACF with platform-level access or reports necessary to verify controls.
(e) Remediation of Unauthorized Access. If the ACF's quarterly review (or any other monitoring activity) identifies unauthorized access or a failure of the dual-authorization control, the ACF shall immediately notify Lena Fujimoto and Priya Venkatesh. Pinnacle Bridge shall remediate the control failure within twenty-four (24) hours and provide the ACF with written confirmation of remediation, including a root-cause analysis and corrective measures to prevent recurrence.
5.5 Monthly Reconciliation
To ensure that no advertising is published by Pinnacle Bridge without ACF approval, a monthly reconciliation process shall be conducted as follows:
(a) Monthly Report. On or before the fifth (5th) business day of each calendar month, the Pinnacle Bridge Advertising Compliance Liaison shall provide the ACF with a complete list of all advertising creatives that were active, paused, or newly created on any advertising platform during the preceding calendar month. The report shall include, for each creative: the platform name, creative ID or campaign ID, creative content (screenshot or file), target geographies, campaign dates, and total spend during the reporting period.
(b) ACF Reconciliation. Within five (5) business days of receiving the monthly report, the ACF shall reconcile the list of Pinnacle Bridge advertising creatives against the ACF's approval records. The ACF shall identify any creatives appearing on the Pinnacle Bridge monthly report that do not have a corresponding ACF approval record.
(c) Discrepancy Reporting. Any discrepancy — that is, any Pinnacle Bridge advertising creative that appears on the monthly report without a corresponding ACF approval — shall be treated as a compliance incident under Section 9.4 of this SOP. The discrepancy must be reported immediately to Lena Fujimoto and Priya Venkatesh, and the unapproved creative must be paused or withdrawn within twenty-four (24) hours.
(d) Monthly Reconciliation Certification. Upon completion of the monthly reconciliation, the ACF shall prepare a Monthly Reconciliation Certification documenting the reconciliation results (including any discrepancies identified and remediation actions taken). This certification shall be maintained in the compliance management system and made available fo