Extract to table

• Connecticut Credit-for-Reinsurance Regulations: Quorum Specialty, as a Connecticut-domiciled admitted insurer, must comply with Connecticut's credit-for-reinsurance standards in the first instance

Graystone Re, Tidewater Re): Reinsurers that are domiciled outside the United States and that have not obtained certified reinsurer status must fund 100% of their obligations through a qualifying reinsurance trust, plus any additional margin required by the applicable regulatory authority

The trust agreement must be executed by December 15, 2025, and the trust must be fully funded with qualifying assets prior to the January 1, 2026 inception date of the Cat XOL treaty

The withdrawal mechanics must comply with the regulatory requirement that the beneficiary have the right to draw on the trust without the consent of the grantor

Given Tidewater Re's lower financial strength rating of A– (Excellent) — the minimum acceptable rating under Quorum Specialty's internal counterparty credit standards — we recommend that the Tidewater Re trust agreement include the following additional protective provisions: (a) Top-Up Requirement on Rating Downgrade: If Tidewater Re is downgraded below A– (Excellent) by Brindoval Rating Services, Tidewater Re shall be required to increase trust funding by an additional margin (e

Key provisions to be included in each trust agreement are as follows: (a) Definition of Trust Assets: Clear identification of the assets comprising the trust corpus, including initial funding, subsequent contributions, and investment returns; (b) Minimum Funding Requirements: Specification of the minimum trust balance (102% of maximum aggregate exposure, or such higher amount as may be required in the case of Tidewater Re upon a rating downgrade); (c) Permitted Investments: Limitation of trust investments to those asset classes permitted under 11 NYCRR 125; (d) Valuation Methodology: Mark-to-market valuation of trust assets on at least a quarterly basis, with specified treatment of accrued interest and unrealized gains/losses; (e) Withdrawal and Drawdown Mechanics: Right of Quorum Specialty as beneficiary to withdraw funds upon default, claim presentation, or insolvency of the grantor, without the consent of the grantor; (f) Reporting and Notification Obligations: Quarterly trust asset statements from the trustee; prompt notification of any material change in trust asset composition or value; (g) Grantor's Duty to Replenish: Obligation of the grantor to restore the trust balance to the minimum required level upon any drawdown or investment loss that causes the trust to fall below such level; (h) Termination Provisions: The trust must survive until all obligations of the reinsurer under the Cat XOL contract have been fully discharged, commuted, or otherwise extinguished