OF THE INVESTMENT COMMITTEE OF THE BOARD OF DIRECTORS OF QUORUM INSURANCE HOLDINGS CORP.
**Adopted by the Board of Directors on **
** **
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ARTICLE I — PURPOSE
The Board of Directors (the "Board") of Quorum Insurance Holdings Corp., a corporation organized under the laws of the State of Delaware (the "Company" or "Quorum"), the common stock of which is listed on the New York Stock Exchange under the ticker symbol "QIHC," has established the Investment Committee of the Board of Directors (the "Committee") to assist the Board in fulfilling its fiduciary and oversight responsibilities with respect to the management and stewardship of the Company's consolidated investment portfolio and related investment activities.
The Committee's purpose is to provide informed, independent oversight in the following areas:
1. Investment Policies, Strategies, and Guidelines. The Committee shall oversee the development, periodic review, and implementation of the Company's investment policies, strategies, and guidelines, ensuring that such policies are consistent with the Company's overall corporate strategy, risk appetite, capital adequacy requirements, and obligations to policyholders, shareholders, and other stakeholders.
2. Management and Performance of the Consolidated Investment Portfolio. The Committee shall oversee the management and performance of the Company's consolidated investment portfolio, which had total invested assets of approximately . The Committee shall ensure that the portfolio is managed in a manner consistent with the Company's Investment Policy Statement, applicable legal and regulatory requirements, and sound investment practices.
3. Legal, Regulatory, and Risk-Management Compliance. The Committee shall oversee compliance of the Company's investment activities with all applicable legal, regulatory, and risk-management requirements.
The Committee recognizes that its role is one of oversight. The management of the Company's day-to-day investment operations is the responsibility of the Company's officers and management, including the Chief Investment Officer, subject to the oversight and direction of the Committee and the Board.
ARTICLE II — COMPOSITION AND MEMBERSHIP
Section 2.1 — Number of Members
The Committee shall consist of no fewer than three (3) members of the Board. The exact number of members serving on the Committee at any given time shall be determined by the Board from time to time, taking into consideration the scope of the Committee's responsibilities, the availability and qualifications of Board members, and the efficient functioning of the Committee. All members of the Committee shall be appointed by the Board upon the recommendation of the Nominating & Corporate Governance Committee of the Board.
Section 2.2 — Independence and Qualifications
Each member of the Committee shall satisfy the independence requirements applicable to directors of companies listed on the New York Stock Exchange
least one (1) member of the Committee shall have significant professional experience in investment management, asset allocation, portfolio construction, or financial markets oversight, as determined by the Board. In appointing members to the Committee, the Board shall give due consideration to each prospective member's investment expertise, financial literacy, familiarity with institutional investment practices, knowledge of insurance industry investment operations, and relevant professional experience, including experience with fixed-income markets, alternative investments, regulatory compliance, or enterprise risk management.
Section 2.3 — Chair
The Board shall designate one member of the Committee to serve as Chair of the Committee (the "Chair").
The Chair shall preside at all meetings of the Committee, establish the agenda for each meeting in consultation with management and other Committee members, and serve as the principal liaison between the Committee and the full Board on all investment-related matters. In the absence of the Chair at any meeting, the Committee members present at such meeting shall select one of their number to serve as acting Chair for the duration of that meeting.
Section 2.4 — Appointment and Term
Members of the Committee shall be appointed
ARTICLE III — MEETINGS AND PROCEDURES
Section 3.1 — Frequency
The Committee shall meet at least four (4) times per year, approximately once per calendar quarter, and shall meet more frequently as circumstances require or as the Chair deems necessary or appropriate to fulfill the Committee's responsibilities. The Committee shall establish a regular meeting calendar at the beginning of each fiscal year.
Section 3.2 — Quorum and Voting
A majority of the members of the Committee then in office shall constitute a quorum for the transaction of business at any meeting of the Committee. No business shall be transacted at any meeting at which a quorum is not present, except that a lesser number of members may adjourn the meeting to a later date.
All actions of the Committee shall be taken by a majority vote of the members present at a duly called meeting at which a quorum is present. Each member of the Committee shall have one vote. In the event of a tie vote, the matter shall be referred to the full Board for determination.
Section 3.3 — Attendance and Participation
The Committee may invite
Members of the Committee may participate in meetings by means of telephone conference, video conference, or other communications equipment by which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting for all purposes, including the determination of a quorum.
Section 3.4 — Agenda and Minutes
The Chair shall establish the agenda for each meeting of the Committee, in consultation with the Chief Investment Officer, the Chief Financial Officer, and other members of the Committee. The agenda and any supporting materials shall be distributed to Committee members in advance of each meeting, to the extent practicable, in order to permit adequate review and preparation.
ARTICLE IV — AUTHORITY AND RESPONSIBILITIES
The Committee shall have the following authority and responsibilities, in addition to any other duties that may be assigned to the Committee by the Board from time to time:
Section 4.1 — Investment Policy Oversight
The Committee shall review and recommend to the Board for approval the Company's Investment Policy Statement (the "IPS"), which shall set forth the Company's investment objectives, risk tolerances, The IPS shall address the investment objectives and constraints applicable to the consolidated investment portfolio as well as the specific requirements and restrictions applicable to each of the Company's regulated insurance subsidiaries.
The Committee shall review the IPS at least annually, or more frequently as warranted by material changes in market conditions, regulatory requirements, the Company's financial condition, or the Company's strategic direction.
Section 4.2 — Delegation of Investment Authority
The Committee shall exercise the investment authority delegated to it by the Board
(a) Single-Issuer Exposure. The authority to approve single-issuer credit exposures of up to million.
(b) Portfolio Rebalancing and Asset-Class Reallocations. The authority to approve portfolio rebalancing transactions and asset-class reallocations including tactical adjustments to asset-allocation targets in response to market conditions, provided that such adjustments remain within the permissible ranges set forth in the IPS.
Section 4.3 — Investment Performance Monitoring
The Committee shall review and evaluate the performance of the Company's investment portfolio on at least a quarterly basis.
Section 4.4 — External Investment Managers and Advisors
The Committee shall oversee the selection, appointment, and performance evaluation of all external investment managers retained by the Company or any of its subsidiaries to manage or advise on all or any portion of the investment portfolio. In fulfilling this responsibility, the Committee shall:
(a) Establish and periodically review criteria for the selection and evaluation of external investment managers, taking into account factors such as investment philosophy and process, historical performance, risk management capabilities, organizational stability, regulatory standing, fee structures, and alignment with the Company's investment objectives and ESG policies.
(c) Receive and review periodic performance reports from external investment managers and custodians, including attribution analysis, compliance reporting, and assessments of adherence to stated investment mandates and guidelines.
(d) Consider whether to retain, terminate, or replace any external investment manager or custodian based on performance, compliance, organizational changes, or other relevant factors.
Section 4.5 — Risk Oversight — Investment-Related Risks
The Committee shall monitor and evaluate investment-related risks on an ongoing basis
ARTICLE — EFFECTIVE DATE
This Charter is effective as of , the date of its adoption by the Board of Directors of Quorum Insurance Holdings Corp. at a duly convened meeting of the Board held on such date.
Effective upon its adoption, this Amended and Restated Charter supersedes and replaces in its entirety the Charter of the Investment Committee originally adopted by the Board of Directors on February 12, 2016, and any and all amendments thereto. All references to the "Charter" of the Investment Committee in the Company's Bylaws, corporate governance guidelines, or other governance documents shall be deemed to refer to this Amended and Restated Charter.