[sheet: Cover]

Field	Value
Document Title	Proposed Investigation Timeline and Budget — Scoping Phase
Prepared By	Calderwood & Harkness LLP
C&H Office — New York	1221 Avenue of the Americas, 38th Floor, New York, NY 10020
C&H Office — Hartford	One Constitution Plaza, Suite 1400, Hartford, CT 06103
Matter Number	1025-00010
Client	Audit Committee of Quorum Insurance Holdings Corp.
Subject	Internal Investigation — Whistleblower Allegations re Ashgrove Equity Partners Specialty Underwriting, Inc.
IntegriLine Intake Reference	IL-QIH-2026-0214-0033
Date Prepared	February 27, 2026
Prepared By (Attorneys)	Steven Hollander (NY Bar #5681234) and Jasmine Thornton (CT Bar #439772)
Supervised By	Conrad Ashby, Responsible Partner (NY Bar #4417892)
Billing Partner	Victoria Chambers (NY Bar #4523106)
Addressee	Priya Subramaniam, Chair, Audit Committee, Quorum Insurance Holdings Corp.
Classification	Attorney-Client Privileged / Attorney Work Product
Status	DRAFT — For Audit Committee Review and Approval

[sheet: Timeline]

Week	Dates	Workstream	Key Tasks	Responsible Timekeeper(s)	Deliverable(s)	Dependencies / Notes
Week 1	Mar 3–7, 2026	Engagement Setup & Document Preservation	Finalize and execute engagement letter with Audit Committee Chair Priya Subramaniam; issue document-preservation / litigation-hold notice via GC Owen R. Hargrove to custodians at QIH (400 Atlantic Street, Suite 3200, Stamford, CT 06901) and BSU (55 Elm Street, 8th Floor, Hartford, CT 06103); identify 8–12 initial custodians including Garrett T. Lomax (President, BSU), Neil W. Stadler (SVP, Commercial Property Division), and Rhonda M. Kessler (VP, Finance & Operations)	Conrad Ashby; Steven Hollander; Jasmine Thornton; Paralegal	Executed engagement letter; issued preservation notice; custodian list	Coordinate with Owen R. Hargrove (GC) on distribution; confirm $100,000 advance retainer received
Week 1	Mar 3–7, 2026	Forensic Advisor Engagement	Finalize retention of Claridge Forensic Advisory LLC (Daniel J. Petrov, Managing Director, 101 Park Avenue, 26th Floor, New York, NY 10178) under C&H umbrella for work-product protection; execute Claridge engagement letter	Conrad Ashby; Steven Hollander	Executed Claridge engagement letter	Structure Claridge as consulting expert under C&H direction to preserve privilege
Week 1	Mar 3–7, 2026	Coordination with Standing Counsel	Initial coordination call with Elaine R. Foxworth, Pemberton Hale & Creighton LLP (599 Lexington Avenue, Suite 2600, New York, NY 10022) regarding SEC disclosure considerations and information-sharing protocols	Conrad Ashby; Steven Hollander	Meeting minutes; protocol agreement	PHC advises on 8-K timing; C&H leads investigation independently
Week 1	Mar 3–7, 2026	Preliminary Complaint Review	Detailed review and analysis of IntegriLine whistleblower complaint (IL-QIH-2026-0214-0033) and two attached sample binder-confirmation PDFs; identify key allegation parameters and preliminary investigative questions	Steven Hollander; Jasmine Thornton	Complaint analysis memorandum; preliminary issue list	Foundation document for all subsequent workstreams
Week 2	Mar 10–14, 2026	Initial Audit Committee Briefing	Present preliminary investigation plan and scoping memorandum to Audit Committee (Priya Subramaniam, Thomas K. Driscoll, Angela F. Delvecchio) during week of March 9; discuss privilege and communication protocol	Conrad Ashby; Steven Hollander	Presentation deck; approved investigation scope	Telephonic or in-person meeting at QIH headquarters
Week 2	Mar 10–14, 2026	Document Collection — Phase 1	Initiate collection of BSU commission-income ledgers (FY 2023–FY 2025) from BSU Finance; request IBNR reserve schedules from Linden Actuarial Consulting Group (Margaret Y. Cho, FCAS, 280 Trumbull Street, Suite 900, Hartford, CT 06103); collect BSU organizational chart (~120 employees)	Steven Hollander; Jasmine Thornton; Paralegal	Collected documents; chain-of-custody log	Claridge to assist with e-discovery processing
Week 2	Mar 10–14, 2026	Counterparty Verification — Phase 1	Search Connecticut, New York, and multi-state surplus-lines license databases for Veltrano Risk Advisors, Halloran & Pratt Insurance Associates, and CrestPoint Brokerage LLC; verify registered addresses; run Secretary of State entity searches in CT, NY, DE, and NJ	Jasmine Thornton; Paralegal	License search results memorandum	Preliminary step to confirm or refute fictitious-broker allegations
Week 2	Mar 10–14, 2026	Upjohn Warning Preparation	Draft Upjohn / corporate Miranda warnings for use in any custodian communications and future witness interviews; establish interview protocol memorandum	Steven Hollander; Jasmine Thornton	Draft Upjohn warnings; interview protocol memo	Must be finalized before any substantive custodian contact
Week 3	Mar 17–21, 2026	Forensic Accounting — Phase 1	Claridge begins forensic analysis of BSU commission-income ledgers; trace premium flows to alleged fictitious brokers; identify the approximately 147 binder confirmations referenced in the complaint; reconcile against the ~$74 million in alleged fictitious placed premium	Steven Hollander (oversight); Claridge team (Daniel J. Petrov)	Preliminary forensic findings memo	Dependent on receipt of BSU ledgers from Week 2 collection
Week 3	Mar 17–21, 2026	Reserve Analysis — Phase 1	Review IBNR reserve-release entries for Q4 2024 and Q2 2025 (quarters in which ~$38.5 million in alleged improper releases were concentrated); coordinate with Linden Actuarial schedules	Jasmine Thornton; Claridge team	Reserve-release analysis working paper	Cross-reference with Kellner & Strauss LLP (Howard M. Bressler, 345 Park Avenue, 18th Floor, New York, NY 10154) audit work papers if access granted
Week 3	Mar 17–21, 2026	Public Records & Background Research	Conduct public-records and background research on subject individuals (Lomax, Stadler, Kessler) and alleged shell brokers; review UCC filings, property records, litigation history, and corporate affiliations	Jasmine Thornton; Paralegal	Background research memorandum	Identify any undisclosed affiliations between subject individuals and alleged shell entities
Week 3–4	Mar 17–28, 2026	Sample Binder Review	Analyze the two sample binder-confirmation PDFs attached to the whistleblower complaint (aggregate face value ~$12.4 million); compare against BSU placement records and carrier confirmations	Steven Hollander; Jasmine Thornton	Binder analysis memorandum	Assess authenticity; compare formatting to legitimate BSU binders
Week 4	Mar 24–28, 2026	Document Collection — Phase 2	Collect email and electronic files from identified custodians (8–12 custodians); Claridge processes and hosts for review; apply search terms related to the three alleged shell brokers and key financial terms	Jasmine Thornton; Paralegal; Claridge team	Processed document set ready for review	Upjohn warnings to be prepared for any custodian communications
Week 4	Mar 24–28, 2026	Internal Controls Assessment — Phase 1	Review BSU's internal controls over premium revenue recognition and reserve management; assess SOX implications — QIH CEO Marcus P. Galvin and CFO Denise R. Nakamura certified ICFRR for FY 2025 under SOX §§ 302 and 906	Conrad Ashby; Steven Hollander	Preliminary internal-controls gap assessment	Coordinate with Kellner & Strauss LLP regarding audit reliance on BSU controls
Week 4	Mar 24–28, 2026	Preliminary Document Review	Begin first-pass review of collected documents using prioritized search terms; identify hot documents and key communications involving subject individuals and alleged shell brokers	Jasmine Thornton; Paralegal	Preliminary document review log; hot document set	Claridge hosting platform operational; privilege review to follow
Week 5	Mar 31–Apr 4, 2026	Interim Findings Synthesis	Synthesize preliminary findings from forensic accounting, counterparty verification, reserve analysis, and document review; assess whether allegations appear substantiated and whether full investigation is warranted; assess aggregate alleged misstatement of ~$48.1 million ($9.6M phantom commissions + $38.5M improper reserve releases)	Conrad Ashby; Steven Hollander; Jasmine Thornton	Interim findings memorandum (draft)	Key decision point for Audit Committee
Week 5	Mar 31–Apr 4, 2026	D&O Insurance Notice	Finalize and dispatch D&O notice letter to Sentinel Mutual Assurance Group (Patricia L. Munroe, VP — Executive Liability Claims, 200 Clarendon Street, Suite 4400, Boston, MA 02116) under policies SMA-EL-2025-07741 (primary, $15M limit, $1M retention) and SMA-XS-2025-07742 (excess, $25M xs $15M)	Conrad Ashby; Steven Hollander	Dispatched notice letter; confirmation of receipt	Timing subject to Audit Committee approval
Week 5	Mar 31–Apr 4, 2026	Coordination Update with PHC	Update call with Elaine R. Foxworth (PHC) regarding preliminary findings status and any 8-K or other disclosure timing considerations; assess whether 10-Q for Q1 2026 (anticipated filing May 2026) may require disclosure	Conrad Ashby; Steven Hollander	Updated protocol memo; disclosure analysis notes	PHC to advise on materiality and disclosure triggers
Week 5–6	Mar 31–Apr 11, 2026	Regulatory Exposure Assessment	Prepare preliminary analysis of potential regulatory and criminal exposure: SEC (Exchange Act §§ 10(b), 13(a); Rules 10b-5, 13a-14); Connecticut Insurance Department; potential DOJ referral (wire fraud, mail fraud, securities fraud); whistleblower protections under SOX § 806 and Dodd-Frank § 922; potential restatement for FY 2023–FY 2025	Conrad Ashby; Steven Hollander	Regulatory exposure memorandum	Coordinate with PHC (Elaine R. Foxworth) on 8-K / disclosure obligations
Week 6	Apr 7–11, 2026	Full Investigation Budget Preparation	Prepare refined full-investigation budget based on scoping-phase findings; estimate expanded scope including custodian interviews (est. 15–25 witnesses), expanded document review, regulatory engagement strategy, and potential restatement support; preliminary range $1.2M–$2.5M	Conrad Ashby; Victoria Chambers; Steven Hollander	Revised full-investigation budget proposal	Budget dependent on scoping-phase findings and Audit Committee direction
Week 6	Apr 7–11, 2026	Scoping-Phase Report to Audit Committee	Present comprehensive scoping-phase findings and recommendation to Audit Committee; recommend whether to proceed to full investigation phase; present refined full-investigation budget (preliminary range: $1.2M – $2.5M); discuss subject individuals' status (Garrett T. Lomax, Neil W. Stadler, Rhonda M. Kessler) and any interim protective measures	Conrad Ashby; Victoria Chambers; Steven Hollander	Scoping-phase report; recommendation memorandum; revised budget	Final deliverable of scoping phase

[sheet: C&H Budget Detail]

Timekeeper	Role	Bar Admission	Hourly Rate	Week 1 Hours	Week 2 Hours	Week 3 Hours	Week 4 Hours	Week 5 Hours	Week 6 Hours	Total Estimated Hours	Total Estimated Fees
Conrad Ashby	Responsible Partner	NY Bar #4417892	$1,475	8	6	6	6	7	7	40	$59,000
Steven Hollander	Lead Associate	NY Bar #5681234	$1,050	10	10	12	10	10	8	60	$63,000
Jasmine Thornton	Working Associate	CT Bar #439772	$825	12	14	14	16	14	10	80	$66,000
Paralegal (TBD)	Paralegal	N/A	$425	4	4	4	4	2	2	20	$8,500
TOTAL	34	34	36	36	33	27	200	$196,500
Budget Range — Low Estimate	~180	$175,000
Budget Range — Midpoint Estimate	~200	$196,500
Budget Range — High Estimate	~225	$225,000

Note: Victoria Chambers (Billing Partner, NY Bar #4523106) provides oversight; her time is not separately budgeted for the scoping phase but will be billed at $1,475/hr if required.

[sheet: Claridge Budget]

Service Category	Description	Responsible Contact	Estimated Hours	Blended Rate	Low Estimate	High Estimate	Midpoint Estimate
Forensic Accounting Analysis	Analysis of BSU commission-income ledgers FY 2023–FY 2025; tracing premium flows to Veltrano Risk Advisors, Halloran & Pratt Insurance Associates, and CrestPoint Brokerage LLC; reconciliation of ~147 binder confirmations against ~$74M alleged fictitious placed premium; quantification of ~$9.6M alleged phantom commission income ($74M × ~13% avg. commission rate)	Daniel J. Petrov, Managing Director	100–140	$475–$550	$47,500	$77,000	$62,250
IBNR Reserve-Release Review	Review of IBNR reserve-release entries concentrated in Q4 2024 and Q2 2025; assessment of alleged ~$38.5M in improper reserve releases; cross-reference with schedules from Linden Actuarial Consulting Group (Margaret Y. Cho, FCAS)	Daniel J. Petrov, Managing Director	40–60	$475–$550	$19,000	$33,000	$26,000
E-discovery Collection & Processing	Collection, processing, and hosting of electronically stored information from 8–12 custodians at BSU (55 Elm Street, 8th Floor, Hartford, CT 06103); application of search terms; deduplication and filtering	Claridge E-discovery Team	N/A (flat/unit pricing)	N/A	$18,500	$10,000	$14,250
TOTAL — Claridge Scoping Support	Claridge Forensic Advisory LLC, 101 Park Avenue, 26th Floor, New York, NY 10178	$85,000	$120,000	$102,500

Note: Claridge engaged as consulting expert under direction of Calderwood & Harkness LLP to preserve work-product protection. All Claridge invoices submitted through C&H.

[sheet: Combined Budget Summary]

Budget Component

SCOPING PHASE

Calderwood & Harkness LLP — Professional Fees (Scoping Phase)	Calderwood & Harkness LLP	$175,000	$225,000	$196,500	4–6 weeks; hourly rates: Partners $1,475/hr, Sr. Associates $1,050/hr, Associates $825/hr, Paralegals $425/hr; ~200 total estimated hours at midpoint
Calderwood & Harkness LLP — Estimated Out-of-Pocket Expenses	Calderwood & Harkness LLP	$5,000	$10,000	$7,500	Travel (Stamford/Hartford), copying, courier, database searches (surplus-lines license databases for CT, NY, multi-state)
Claridge Forensic Advisory LLC — Scoping Support	Claridge Forensic Advisory LLC	$85,000	$120,000	$102,500	Forensic accounting, IBNR reserve review, e-discovery collection/processing; contact: Daniel J. Petrov
TOTAL — Scoping Phase	$265,000	$355,000	$306,500	Combined C&H + Claridge + expenses
Advance Retainer (Requested from QIH)	Calderwood & Harkness LLP	$100,000	$100,000	$100,000	To be applied against initial invoices; replenished as drawn down

FULL INVESTIGATION (Preliminary Range — If Scoping Confirms Need)

Calderwood & Harkness LLP — Full Investigation Professional Fees	Calderwood & Harkness LLP	$1,200,000	$2,500,000	$1,850,000	Preliminary estimate; subject to significant refinement after completion of scoping phase; assumes custodian interviews, expanded document review, regulatory engagement, and potential restatement support
Claridge Forensic Advisory LLC — Full Investigation Support	Claridge Forensic Advisory LLC	TBD	TBD	TBD	To be scoped upon completion of initial forensic review; dependent on volume of transactions and complexity of reserve analysis
Potential External Auditor Coordination Costs	Kellner & Strauss LLP (Howard M. Bressler)	TBD	TBD	TBD	If restatement of FY 2023–FY 2025 financials is required; K&S costs borne by QIH separately

Note: All fees billed monthly at hourly rates; no contingency or success fee arrangement. Budget estimates are based on currently available information and may be revised as the investigation proceeds.

[sheet: Allegation Summary]

Allegation Element	Estimated Amount	Period	Source / Reference
Fictitious placed premium (aggregate)	$74,000,000	Q3 2023 – Q4 2025 (~10 quarters)	Whistleblower complaint narrative (IntegriLine IL-QIH-2026-0214-0033, filed Feb 14, 2026)
Phantom commission income	$9,600,000	Q3 2023 – Q4 2025	~$74M × ~13% avg. commission rate = ~$9.62M (rounded $9.6M)
Improper IBNR reserve releases	$38,500,000	Concentrated in Q4 2024 and Q2 2025	Whistleblower complaint narrative
Aggregate alleged financial misstatement	$48,100,000	Q3 2023 – Q4 2025	$9.6M phantom commissions + $38.5M improper reserve releases = $48.1M
Sample binder face value (2 PDFs attached to complaint)	$12,400,000	Not specified	Binder-confirmation PDF attachments to complaint
Number of alleged fictitious binder confirmations	~147	Q3 2023 – Q4 2025	Whistleblower complaint narrative
BSU FY 2025 placed premium (context)	$487,000,000	FY 2025	QIH FY 2025 Form 10-K (filed Feb 21, 2026)
BSU FY 2025 commission & fee income (context)	$63,200,000	FY 2025	QIH FY 2025 Form 10-K
QIH FY 2025 gross written premium (context)	$3,170,000,000	FY 2025	QIH FY 2025 Form 10-K
QIH FY 2025 net earned premium (context)	$2,410,000,000	FY 2025	QIH FY 2025 Form 10-K
QIH market capitalization (approx.)	$4,800,000,000	As of Feb 2026	Market data

KEY RATIOS

Fictitious premium as % of BSU placed premium	15.2%	FY 2025 basis	$74M / $487M ≈ 15.2%
Phantom commissions as % of BSU commission income	15.2%	FY 2025 basis	$9.6M / $63.2M ≈ 15.2%
Aggregate misstatement as % of QIH net earned premium	2.0%	FY 2025 basis	$48.1M / $2,410M ≈ 2.0%
Aggregate misstatement as % of QIH market cap	1.0%	As of Feb 2026	$48.1M / $4,800M ≈ 1.0%

[sheet: Cover]
Field | Value
Document Title | Proposed Investigation Timeline and Budget — Scoping Phase
Prepared By | Calderwood & Harkness LLP
C&H Office — New York | 1221 Avenue of the Americas, 38th Floor, New York, NY 10020
C&H Office — Hartford | One Constitution Plaza, Suite 1400, Hartford, CT 06103
Matter Number | 1025-00010
Client | Audit Committee of Quorum Insurance Holdings Corp.
Subject | Internal Investigation — Whistleblower Allegations re Ashgrove Equity Partners Specialty Underwriting, Inc.
IntegriLine Intake Reference | IL-QIH-2026-0214-0033
Date Prepared | February 27, 2026
Prepared By (Attorneys) | Steven Hollander (NY Bar #5681234) and Jasmine Thornton (CT Bar #439772)
Supervised By | Conrad Ashby, Responsible Partner (NY Bar #4417892)
Billing Partner | Victoria Chambers (NY Bar #4523106)
Addressee | Priya Subramaniam, Chair, Audit Committee, Quorum Insurance Holdings Corp.
Classification | Attorney-Client Privileged / Attorney Work Product
Status | DRAFT — For Audit Committee Review and Approval
[sheet: Timeline]
Week | Dates | Workstream | Key Tasks | Responsible Timekeeper(s) | Deliverable(s) | Dependencies / Notes
Week 1 | Mar 3–7, 2026 | Engagement Setup & Document Preservation | Finalize and execute engagement letter with Audit Committee Chair Priya Subramaniam; issue document-preservation / litigation-hold notice via GC Owen R. Hargrove to custodians at QIH (400 Atlantic Street, Suite 3200, Stamford, CT 06901) and BSU (55 Elm Street, 8th Floor, Hartford, CT 06103); identify 8–12 initial custodians including Garrett T. Lomax (President, BSU), Neil W. Stadler (SVP, Commercial Property Division), and Rhonda M. Kessler (VP, Finance & Operations) | Conrad Ashby; Steven Hollander; Jasmine Thornton; Paralegal | Executed engagement letter; issued preservation notice; custodian list | Coordinate with Owen R. Hargrove (GC) on distribution; confirm $100,000 advance retainer received
Week 1 | Mar 3–7, 2026 | Forensic Advisor Engagement | Finalize retention of Claridge Forensic Advisory LLC (Daniel J. Petrov, Managing Director, 101 Park Avenue, 26th Floor, New York, NY 10178) under C&H umbrella for work-product protection; execute Claridge engagement letter | Conrad Ashby; Steven Hollander | Executed Claridge engagement letter | Structure Claridge as consulting expert under C&H direction to preserve privilege
Week 1 | Mar 3–7, 2026 | Coordination with Standing Counsel | Initial coordination call with Elaine R. Foxworth, Pemberton Hale & Creighton LLP (599 Lexington Avenue, Suite 2600, New York, NY 10022) regarding SEC disclosure considerations and information-sharing protocols | Conrad Ashby; Steven Hollander | Meeting minutes; protocol agreement | PHC advises on 8-K timing; C&H leads investigation independently
Week 1 | Mar 3–7, 2026 | Preliminary Complaint Review | Detailed review and analysis of IntegriLine whistleblower complaint (IL-QIH-2026-0214-0033) and two attached sample binder-confirmation PDFs; identify key allegation parameters and preliminary investigative questions | Steven Hollander; Jasmine Thornton | Complaint analysis memorandum; preliminary issue list | Foundation document for all subsequent workstreams
Week 2 | Mar 10–14, 2026 | Initial Audit Committee Briefing | Present preliminary investigation plan and scoping memorandum to Audit Committee (Priya Subramaniam, Thomas K. Driscoll, Angela F. Delvecchio) during week of March 9; discuss privilege and communication protocol | Conrad Ashby; Steven Hollander | Presentation deck; approved investigation scope | Telephonic or in-person meeting at QIH headquarters
Week 2 | Mar 10–14, 2026 | Document Collection — Phase 1 | Initiate collection of BSU commission-income ledgers (FY 2023–FY 2025) from BSU Finance; request IBNR reserve schedules from Linden Actuarial Consulting Group (Margaret Y. Cho, FCAS, 280 Trumbull Street, Suite 900, Hartford, CT 06103); collect BSU organizational chart (~120 employees) | Steven Hollander; Jasmine Thornton; Paralegal | Collected documents; chain-of-custody log | Claridge to assist with e-discovery processing
Week 2 | Mar 10–14, 2026 | Counterparty Verification — Phase 1 | Search Connecticut, New York, and multi-state surplus-lines license databases for Veltrano Risk Advisors, Halloran & Pratt Insurance Associates, and CrestPoint Brokerage LLC; verify registered addresses; run Secretary of State entity searches in CT, NY, DE, and NJ | Jasmine Thornton; Paralegal | License search results memorandum | Preliminary step to confirm or refute fictitious-broker allegations
Week 2 | Mar 10–14, 2026 | Upjohn Warning Preparation | Draft Upjohn / corporate Miranda warnings for use in any custodian communications and future witness interviews; establish interview protocol memorandum | Steven Hollander; Jasmine Thornton | Draft Upjohn warnings; interview protocol memo | Must be finalized before any substantive custodian contact
Week 3 | Mar 17–21, 2026 | Forensic Accounting — Phase 1 | Claridge begins forensic analysis of BSU commission-income ledgers; trace premium flows to alleged fictitious brokers; identify the approximately 147 binder confirmations referenced in the complaint; reconcile against the ~$74 million in alleged fictitious placed premium | Steven Hollander (oversight); Claridge team (Daniel J. Petrov) | Preliminary forensic findings memo | Dependent on receipt of BSU ledgers from Week 2 collection
Week 3 | Mar 17–21, 2026 | Reserve Analysis — Phase 1 | Review IBNR reserve-release entries for Q4 2024 and Q2 2025 (quarters in which ~$38.5 million in alleged improper releases were concentrated); coordinate with Linden Actuarial schedules | Jasmine Thornton; Claridge team | Reserve-release analysis working paper | Cross-reference with Kellner & Strauss LLP (Howard M. Bressler, 345 Park Avenue, 18th Floor, New York, NY 10154) audit work papers if access granted
Week 3 | Mar 17–21, 2026 | Public Records & Background Research | Conduct public-records and background research on subject individuals (Lomax, Stadler, Kessler) and alleged shell brokers; review UCC filings, property records, litigation history, and corporate affiliations | Jasmine Thornton; Paralegal | Background research memorandum | Identify any undisclosed affiliations between subject individuals and alleged shell entities
Week 3–4 | Mar 17–28, 2026 | Sample Binder Review | Analyze the two sample binder-confirmation PDFs attached to the whistleblower complaint (aggregate face value ~$12.4 million); compare against BSU placement records and carrier confirmations | Steven Hollander; Jasmine Thornton | Binder analysis memorandum | Assess authenticity; compare formatting to legitimate BSU binders
Week 4 | Mar 24–28, 2026 | Document Collection — Phase 2 | Collect email and electronic files from identified custodians (8–12 custodians); Claridge processes and hosts for review; apply search terms related to the three alleged shell brokers and key financial terms | Jasmine Thornton; Paralegal; Claridge team | Processed document set ready for review | Upjohn warnings to be prepared for any custodian communications
Week 4 | Mar 24–28, 2026 | Internal Controls Assessment — Phase 1 | Review BSU's internal controls over premium revenue recognition and reserve management; assess SOX implications — QIH CEO Marcus P. Galvin and CFO Denise R. Nakamura certified ICFRR for FY 2025 under SOX §§ 302 and 906 | Conrad Ashby; Steven Hollander | Preliminary internal-controls gap assessment | Coordinate with Kellner & Strauss LLP regarding audit reliance on BSU controls
Week 4 | Mar 24–28, 2026 | Preliminary Document Review | Begin first-pass review of collected documents using prioritized search terms; identify hot documents and key communications involving subject individuals and alleged shell brokers | Jasmine Thornton; Paralegal | Preliminary document review log; hot document set | Claridge hosting platform operational; privilege review to follow
Week 5 | Mar 31–Apr 4, 2026 | Interim Findings Synthesis | Synthesize preliminary findings from forensic accounting, counterparty verification, reserve analysis, and document review; assess whether allegations appear substantiated and whether full investigation is warranted; assess aggregate alleged misstatement of ~$48.1 million ($9.6M phantom commissions + $38.5M improper reserve releases) | Conrad Ashby; Steven Hollander; Jasmine Thornton | Interim findings memorandum (draft) | Key decision point for Audit Committee
Week 5 | Mar 31–Apr 4, 2026 | D&O Insurance Notice | Finalize and dispatch D&O notice letter to Sentinel Mutual Assurance Group (Patricia L. Munroe, VP — Executive Liability Claims, 200 Clarendon Street, Suite 4400, Boston, MA 02116) under policies SMA-EL-2025-07741 (primary, $15M limit, $1M retention) and SMA-XS-2025-07742 (excess, $25M xs $15M) | Conrad Ashby; Steven Hollander | Dispatched notice letter; confirmation of receipt | Timing subject to Audit Committee approval
Week 5 | Mar 31–Apr 4, 2026 | Coordination Update with PHC | Update call with Elaine R. Foxworth (PHC) regarding preliminary findings status and any 8-K or other disclosure timing considerations; assess whether 10-Q for Q1 2026 (anticipated filing May 2026) may require disclosure | Conrad Ashby; Steven Hollander | Updated protocol memo; disclosure analysis notes | PHC to advise on materiality and disclosure triggers
Week 5–6 | Mar 31–Apr 11, 2026 | Regulatory Exposure Assessment | Prepare preliminary analysis of potential regulatory and criminal exposure: SEC (Exchange Act §§ 10(b), 13(a); Rules 10b-5, 13a-14); Connecticut Insurance Department; potential DOJ referral (wire fraud, mail fraud, securities fraud); whistleblower protections under SOX § 806 and Dodd-Frank § 922; potential restatement for FY 2023–FY 2025 | Conrad Ashby; Steven Hollander | Regulatory exposure memorandum | Coordinate with PHC (Elaine R. Foxworth) on 8-K / disclosure obligations
Week 6 | Apr 7–11, 2026 | Full Investigation Budget Preparation | Prepare refined full-investigation budget based on scoping-phase findings; estimate expanded scope including custodian interviews (est. 15–25 witnesses), expanded document review, regulatory engagement strategy, and potential restatement support; preliminary range $1.2M–$2.5M | Conrad Ashby; Victoria Chambers; Steven Hollander | Revised full-investigation budget proposal | Budget dependent on scoping-phase findings and Audit Committee direction
Week 6 | Apr 7–11, 2026 | Scoping-Phase Report to Audit Committee | Present comprehensive scoping-phase findings and recommendation to Audit Committee; recommend whether to proceed to full investigation phase; present refined full-investigation budget (preliminary range: $1.2M – $2.5M); discuss subject individuals' status (Garrett T. Lomax, Neil W. Stadler, Rhonda M. Kessler) and any interim protective measures | Conrad Ashby; Victoria Chambers; Steven Hollander | Scoping-phase report; recommendation memorandum; revised budget | Final deliverable of scoping phase
[sheet: C&H Budget Detail]
Timekeeper | Role | Bar Admission | Hourly Rate | Week 1 Hours | Week 2 Hours | Week 3 Hours | Week 4 Hours | Week 5 Hours | Week 6 Hours | Total Estimated Hours | Total Estimated Fees
Conrad Ashby | Responsible Partner | NY Bar #4417892 | $1,475 | 8 | 6 | 6 | 6 | 7 | 7 | 40 | $59,000
Steven Hollander | Lead Associate | NY Bar #5681234 | $1,050 | 10 | 10 | 12 | 10 | 10 | 8 | 60 | $63,000
Jasmine Thornton | Working Associate | CT Bar #439772 | $825 | 12 | 14 | 14 | 16 | 14 | 10 | 80 | $66,000
Paralegal (TBD) | Paralegal | N/A | $425 | 4 | 4 | 4 | 4 | 2 | 2 | 20 | $8,500
TOTAL | 34 | 34 | 36 | 36 | 33 | 27 | 200 | $196,500
Budget Range — Low Estimate | ~180 | $175,000
Budget Range — Midpoint Estimate | ~200 | $196,500
Budget Range — High Estimate | ~225 | $225,000
Note: Victoria Chambers (Billing Partner, NY Bar #4523106) provides oversight; her time is not separately budgeted for the scoping phase but will be billed at $1,475/hr if required.
[sheet: Claridge Budget]
Service Category | Description | Responsible Contact | Estimated Hours | Blended Rate | Low Estimate | High Estimate | Midpoint Estimate
Forensic Accounting Analysis | Analysis of BSU commission-income ledgers FY 2023–FY 2025; tracing premium flows to Veltrano Risk Advisors, Halloran & Pratt Insurance Associates, and CrestPoint Brokerage LLC; reconciliation of ~147 binder confirmations against ~$74M alleged fictitious placed premium; quantification of ~$9.6M alleged phantom commission income ($74M × ~13% avg. commission rate) | Daniel J. Petrov, Managing Director | 100–140 | $475–$550 | $47,500 | $77,000 | $62,250
IBNR Reserve-Release Review | Review of IBNR reserve-release entries concentrated in Q4 2024 and Q2 2025; assessment of alleged ~$38.5M in improper reserve releases; cross-reference with schedules from Linden Actuarial Consulting Group (Margaret Y. Cho, FCAS) | Daniel J. Petrov, Managing Director | 40–60 | $475–$550 | $19,000 | $33,000 | $26,000
E-discovery Collection & Processing | Collection, processing, and hosting of electronically stored information from 8–12 custodians at BSU (55 Elm Street, 8th Floor, Hartford, CT 06103); application of search terms; deduplication and filtering | Claridge E-discovery Team | N/A (flat/unit pricing) | N/A | $18,500 | $10,000 | $14,250
TOTAL — Claridge Scoping Support | Claridge Forensic Advisory LLC, 101 Park Avenue, 26th Floor, New York, NY 10178 | $85,000 | $120,000 | $102,500
Note: Claridge engaged as consulting expert under direction of Calderwood & Harkness LLP to preserve work-product protection. All Claridge invoices submitted through C&H.
[sheet: Combined Budget Summary]
Budget Component | Provider | Low Estimate | High Estimate | Midpoint Estimate | Notes
SCOPING PHASE
Calderwood & Harkness LLP — Professional Fees (Scoping Phase) | Calderwood & Harkness LLP | $175,000 | $225,000 | $196,500 | 4–6 weeks; hourly rates: Partners $1,475/hr, Sr. Associates $1,050/hr, Associates $825/hr, Paralegals $425/hr; ~200 total estimated hours at midpoint
Calderwood & Harkness LLP — Estimated Out-of-Pocket Expenses | Calderwood & Harkness LLP | $5,000 | $10,000 | $7,500 | Travel (Stamford/Hartford), copying, courier, database searches (surplus-lines license databases for CT, NY, multi-state)
Claridge Forensic Advisory LLC — Scoping Support | Claridge Forensic Advisory LLC | $85,000 | $120,000 | $102,500 | Forensic accounting, IBNR reserve review, e-discovery collection/processing; contact: Daniel J. Petrov
TOTAL — Scoping Phase | $265,000 | $355,000 | $306,500 | Combined C&H + Claridge + expenses
Advance Retainer (Requested from QIH) | Calderwood & Harkness LLP | $100,000 | $100,000 | $100,000 | To be applied against initial invoices; replenished as drawn down
FULL INVESTIGATION (Preliminary Range — If Scoping Confirms Need)
Calderwood & Harkness LLP — Full Investigation Professional Fees | Calderwood & Harkness LLP | $1,200,000 | $2,500,000 | $1,850,000 | Preliminary estimate; subject to significant refinement after completion of scoping phase; assumes custodian interviews, expanded document review, regulatory engagement, and potential restatement support
Claridge Forensic Advisory LLC — Full Investigation Support | Claridge Forensic Advisory LLC | TBD | TBD | TBD | To be scoped upon completion of initial forensic review; dependent on volume of transactions and complexity of reserve analysis
Potential External Auditor Coordination Costs | Kellner & Strauss LLP (Howard M. Bressler) | TBD | TBD | TBD | If restatement of FY 2023–FY 2025 financials is required; K&S costs borne by QIH separately
Note: All fees billed monthly at hourly rates; no contingency or success fee arrangement. Budget estimates are based on currently available information and may be revised as the investigation proceeds.
[sheet: Allegation Summary]
Allegation Element | Estimated Amount | Period | Source / Reference
Fictitious placed premium (aggregate) | $74,000,000 | Q3 2023 – Q4 2025 (~10 quarters) | Whistleblower complaint narrative (IntegriLine IL-QIH-2026-0214-0033, filed Feb 14, 2026)
Phantom commission income | $9,600,000 | Q3 2023 – Q4 2025 | ~$74M × ~13% avg. commission rate = ~$9.62M (rounded $9.6M)
Improper IBNR reserve releases | $38,500,000 | Concentrated in Q4 2024 and Q2 2025 | Whistleblower complaint narrative
Aggregate alleged financial misstatement | $48,100,000 | Q3 2023 – Q4 2025 | $9.6M phantom commissions + $38.5M improper reserve releases = $48.1M
Sample binder face value (2 PDFs attached to complaint) | $12,400,000 | Not specified | Binder-confirmation PDF attachments to complaint
Number of alleged fictitious binder confirmations | ~147 | Q3 2023 – Q4 2025 | Whistleblower complaint narrative
BSU FY 2025 placed premium (context) | $487,000,000 | FY 2025 | QIH FY 2025 Form 10-K (filed Feb 21, 2026)
BSU FY 2025 commission & fee income (context) | $63,200,000 | FY 2025 | QIH FY 2025 Form 10-K
QIH FY 2025 gross written premium (context) | $3,170,000,000 | FY 2025 | QIH FY 2025 Form 10-K
QIH FY 2025 net earned premium (context) | $2,410,000,000 | FY 2025 | QIH FY 2025 Form 10-K
QIH market capitalization (approx.) | $4,800,000,000 | As of Feb 2026 | Market data
KEY RATIOS
Fictitious premium as % of BSU placed premium | 15.2% | FY 2025 basis | $74M / $487M ≈ 15.2%
Phantom commissions as % of BSU commission income | 15.2% | FY 2025 basis | $9.6M / $63.2M ≈ 15.2%
Aggregate misstatement as % of QIH net earned premium | 2.0% | FY 2025 basis | $48.1M / $2,410M ≈ 2.0%
Aggregate misstatement as % of QIH market cap | 1.0% | As of Feb 2026 | $48.1M / $4,800M ≈ 1.0%

[sheet: Cover]

SCOPING PHASE

KEY RATIOS

Record

Parties

Dates

Amounts