[slide 1]
Quorum Receivables Funding 2022-1 LLC
$500,000,000 Insurance Premium Finance ABS Notes
Sponsor: Quorum Insurance Holdings Corp. (NYSE: QIHC)
Originator/Servicer: Quorum Premium Finance LLC
Structuring Agent & Sole Bookrunner: Ridgeline Capital Markets LLC (Deal ID: RCM-IPF-2022-0041)
Rule 144A / Regulation S Private Placement
Investor Roadshow: Commencing October 24, 2022
[slide 2]
Important Notices & Disclaimers
Confidential; for use solely by QIBs (Rule 144A) and non-U.S. persons (Reg S)
Not an offer to sell or solicitation in any jurisdiction where prohibited
Preliminary ratings subject to withdrawal or revision by the rating agencies
Forward-looking statements; historical performance not indicative of future results
Investors should review the Preliminary Offering Memorandum (v3, dated October 12, 2022)
[slide 3]
Transaction Highlights
$500,000,000 term ABS backed by insurance premium finance receivables
Three rated tranches: Class A $375M / Class B $75M / Class C $35M, plus $15M retained OC
Preliminary ratings: AAA(cr)/Aaa(p) (A) · A(cr)/A1(p) (B) · BBB(cr)/Baa2(p) (C)
24-month revolving period; 12-month amortization; 42-month legal final maturity
Sponsor retention: 5% horizontal interest via retained OC (Dodd-Frank §941 compliant)
$25M committed liquidity facility from Northvane Bank, N.A.
[slide 4]
Sponsor Overview — Quorum Insurance Holdings Corp.
Publicly traded on NYSE (ticker: QIHC); Delaware corporation, headquartered in Stamford, CT
FY2021 consolidated revenue: $3.8 billion
Three business lines: P&C insurance distribution, premium finance lending, insurtech SaaS
Unsecured credit ratings: Brindoval BBB / Pinnacle Baa2
Executive team: CEO Marcus Devereaux; CFO Priya Raghavan; GC Nolan Whitford; Treasurer Sandra Ling-Hwang
[slide 5]
Originator/Servicer — Quorum Premium Finance LLC
Wholly owned QIH subsidiary; Delaware LLC
Licensed as a premium finance company in all 50 states
Total receivables portfolio pre-securitization: ~$2.1 billion
Average loan term: 9 months; portfolio weighted-average APR: 7.85%
3-year average historical net loss rate (2019–2021): 0.42%
Servicing operations diligence completed by Calderwood & Harkness (September 2022)
[slide 6]
Insurance Premium Finance — Asset Class Overview
Short-duration loans (~9 months) to U.S. commercial policyholders financing insurance premiums
Loans secured by unearned premium refund rights from the underlying carrier
Self-liquidating collateral — cancellation triggers carrier refund of unearned premium
Strong historical loss performance across market cycles
Diversified across obligors, geographies, and carriers
[slide 7]
Structural Diagram — Sale Chain & Note Issuance
QIH (Sponsor) → QPF (Originator/Seller/Servicer)
QPF → QRH (Intermediate SPV/Depositor) — True Sale #1
QRH → QRF 2022-1 (Issuer) — True Sale #2
QRF 2022-1 grants first-priority security interest to Calvoneth Trust (Indenture Trustee)
Notes issued to investors; collections flow through waterfall to noteholders
[slide 8]
Capital Structure & Credit Enhancement
Class A: $375M (75.0%) · AAA(cr)/Aaa(p) · 25.0% CE · SOFR + 125 bps (guidance)
Class B: $75M (15.0%) · A(cr)/A1(p) · 10.0% CE · SOFR + 210 bps (guidance)
Class C: $35M (7.0%) · BBB(cr)/Baa2(p) · 3.0% CE · SOFR + 375 bps (guidance)
Overcollateralization / Retained Interest: $15M (3.0%) — unrated, retained by sponsor
Class A CE stack: Class B (15%) + Class C (7%) + OC (3%) = 25%
Class B CE = 10%; Class C CE = 3% (OC only)
[slide 9]
Receivables Pool — Snapshot (Cut-off June 30, 2022)
Initial pool balance: $612,000,000 (~22% overcollateralization vs. $500M notional)
Approximately 82,400 loans; average loan balance ~$7,427
Weighted-average APR: 7.85%
Weighted-average original term: 9.2 months; WA remaining term: 5.7 months
60+ day delinquency at cut-off: 0.87%
Pool tape reconciled and stratified by Veristead Analytics LLC (verification agent)
[slide 10]
Pool Diversification & Concentration
Largest single obligor: 0.38% of pool ($2,325,600)
Top 10 obligors: 2.14% of pool ($13,096,800)
Geographic top 3 states: Texas 14.2% / California 11.8% / Florida 9.6% (aggregate 35.6%)
Concentration limits: single obligor ≤ 0.75%; single state ≤ 20%; single carrier ≤ 15%
Diversified across insurance carrier counterparties (reviewed by C&H diligence)
[slide 11]
Historical Performance
3-year average net loss rate (2019–2021): 0.42%
60+ day delinquency stable in low single digits over the period
Weighted-average APR generates substantial excess spread cushion
Performance across COVID-19 stress period demonstrates asset resilience
Servicing systems and collection procedures reviewed and validated
[slide 12]
Payment Waterfall (Sequential)
1. Trustee fees and expenses ($35,000/yr + $5,000/payment date)
2. Servicing fee (1.00% p.a. on outstanding pool balance)
3. Class A interest → 4. Class B interest → 5. Class C interest
6. Class A principal (until paid in full) → 7. Class B principal → 8. Class C principal
9. Replenish OC to target
10. Residual to Issuer (retained by sponsor)
[slide 13]
Eligible Receivables Criteria
Originated by QPF in the ordinary course of business
Denominated in USD; secured by unearned premium refund rights
Original term ≤ 12 months; obligor is a U.S. commercial policyholder
Not in default (no payment more than 60 days past due)
Compliant with all applicable usury and licensing laws
[slide 14]
Early Amortization Triggers
3-month average net loss rate > 2.00% (vs. 0.42% historical)
60+ day delinquency rate > 3.50% (vs. 0.87% at cut-off)
Available funds cap deficit for 2 consecutive periods
Servicer default or servicer rating downgrade below BB(cr)/Ba2(p)
Pool balance below minimum required $450,000,000 during revolving period
[slide 15]
Servicing & Back-Up Servicing
Primary servicer: Quorum Premium Finance LLC (originator; deep operational expertise)
Servicing fee: 1.00% per annum on outstanding pool balance (~$510,000/month at initial pool)
Back-up servicer: Northvane Bank, N.A. (warm standby); fee $50,000/yr
Data transfer, standard reporting formats, and transition procedures pre-established
Servicer default triggers servicing transfer and early amortization
[slide 16]
Liquidity Facility
$25,000,000 committed liquidity facility from Northvane Bank, N.A.
Commitment fee: 0.25% per annum on undrawn amount ($62,500/yr)
Drawn rate: SOFR + 150 bps
Covers timing mismatches between collections and interest payments to noteholders
Draws senior in waterfall — protects rated noteholders from liquidity gaps
[slide 17]
Trustee, Custodian & Independent Managers
Indenture Trustee / Paying Agent / Securities Intermediary / Custodian: Calvoneth Trust Company, N.A. (Gerald K. Fontaine, Senior Trust Officer; Houston, TX)
Trustee's Counsel: Ashfield & Greer LLP (Vivian Sato, Partner)
Independent Managers via Fortbridge Corporate Services LLC: Timothy R. Callan (QRF 2022-1); Eleanor M. Vasquez (QRH)
Bankruptcy-remote SPVs with separateness covenants and non-petition provisions
Non-consolidation opinions to be delivered at closing
[slide 18]
Legal Framework & Opinions
Issuer's Counsel: Calderwood & Harkness LLP (Douglas Carmichael, Responsible Partner)
Underwriter's Counsel: Calloway & Brandt LLP (Harrison Collier)
Governing law: New York (Indenture, Notes, and core transaction documents)
Opinions: true sale (both transfers), non-consolidation, enforceability, UCC perfection, 144A/Reg S exemption, Delaware valid formation, tax debt characterization
UCC-1 financing statements filed with Delaware SOS at all three transfer levels
[slide 19]
Tax & Regulatory Framework
Notes to be treated as debt for U.S. federal income tax purposes
QRF 2022-1 structured as disregarded entity / non-taxable SPE
FATCA-compliant; non-U.S. holders subject to standard W-8 documentation
State tax nexus limited to Delaware (no franchise or income tax in other states)
Compliant with U.S. risk retention (Dodd-Frank §941): 5% horizontal via retained OC
Volcker Rule: qualifies for 'loan securitization' exclusion — permissible for banking entity investors
[slide 20]
Rating Agency Overview
Brindoval Ratings Inc.: AAA(cr) / A(cr) / BBB(cr) — Lead Analyst Andrew Petrosian
Pinnacle Rating Services LLC: Aaa(p) / A1(p) / Baa2(p) — Lead Analyst Monica Sung
Rating agency presentations delivered August 8, 2022
Preliminary ratings issued August 22 (Brindoval) and August 29 (Pinnacle), 2022
Dual-rated structure enhances investor eligibility
[slide 21]
Auditor & Verification Agent
Auditor: Meridian Ledger LLP (Robert Falcone, Engagement Partner) — PCAOB-registered
Comfort letter and agreed-upon procedures letter for the offering
Verification Agent: Veristead Analytics LLC (Katharine Drummond, MD)
Independent tape reconciliation and pool stratification verification
Reinforces data integrity for investor diligence
[slide 22]
Indicative Timeline
Investor roadshow: commencing October 24, 2022 (virtual)
Expected pricing: early November 2022
Closing: subject to satisfaction of conditions precedent
Revolving period: 24 months from closing
Amortization period: 12 months following revolving period
Legal final maturity: 42 months from closing
[slide 23]
Key Deal Contacts
Sponsor (QIH): Priya Raghavan (CFO); Sandra Ling-Hwang (Treasurer)
Structuring Agent / Bookrunner (Ridgeline): Julian Weatherstone (Head of ABS Origination); Rebecca Tran (MD, Insurance Finance ABS)
Issuer's Counsel (Calderwood & Harkness): Douglas Carmichael; Yuki Nakamura
Underwriter's Counsel (Calloway & Brandt): Harrison Collier; Megan O'Shaughnessy
Indenture Trustee (Calvoneth Trust): Gerald K. Fontaine
Back-Up Servicer / Liquidity (Northvane): Diane Coletti
[slide 24]
Appendix — Preliminary CUSIPs & Deal Identifiers
Preliminary CUSIPs (placeholders — to be finalized): Class A 74892TAA3 · Class B 74892TAB1 · Class C 74892TAC9
Issuer EIN: 88-1247653 (QRF 2022-1); Depositor EIN: 88-1247619 (QRH)
Ridgeline Deal ID: RCM-IPF-2022-0041
Delaware SOS File Nos.: QRF 2022-1 (7894231); QRH (7894228)
Governing law: New York