AGENDA - cdn.ymaws.com · 6/26/2015 · Certificate in HTML5, CS3 & Responsive Design in Web...

AGENDA Quarterly Board Meeting

June 26, 2015 The Davenport Grand ~ Spokane

7:30 am BREAKFAST 8:00 am MEMBER REPRESENTATIVE MEETINGS

9:00 am CALL TO ORDER – President Nick Covey 1. Roll Call of Members2. Changes in Agenda/Motion to Accept Agenda3. Introduction of Guests4. Recognition of Board Members who completed orientation

Sign-in sheet

9:30 am EXECUTIVE SESSION (Claims Litigation, Riseborough) DISCUSSION

1. Member Representative Meeting Report and Discussion2. Jeffrey S. Ristau Scholarship Update – Hatten3. Strategic Plan - Hatten

Page #

002 003

*WP #

4 30

FINANCIAL REPORTS –Spears 1. April 2015 Treasurer’s Report2. April 2015 Income & Expense Statement3. April 2015 Balance Sheet4. May 2015 RiskMaster Report5. April 2015 Comparative Income & Expense Statement & Balance Sheet

007 008 011 012 017

STAFF REPORTS 1. Executive Staff Report2. General Counsel’s Report –Franz3. Broker Report –White & Vanvieldt, Alliant Insurance Services

024 042 043

ACTION ITEMS 1. Minutes - March 27, 20152. Bylaws - Adding new Section 16: Vacancies in Office3. WSTIP Strategic Plan4. Property Coverage Document5. 2015 -2016 Property Renewal6. Governance Policy: Strategic Target Financial Ratios Policy

055 059 078 082 100 153

30

MEMBER UPDATES & GUEST FEEDBACK

12:00 pm ADJOURN

NEXT MEETING – September 25, 2015 ~ Wenatchee

*WP = Work Plan Item #

Balance Approved in 2015Date Received First MI Last Agency Current Position Years in Transit Learning Facility Goal Grant Request AWARD TOTALS 20,000$

11/14/14 Terri J Gardner Grays Harbor Station Clerk 13 Western Governors University Earn BA/BS 1,000$ 2/19/2015

12/01/14 Jeffrey H McGarvey Kitsap Training Specialist 5U of W Certicate program in E-Learning Design & Development Certified in E-Learning 1,000$ 2/19/2015

12/23/14 Daniel Sandmeier Ben Franklin Operations Supervisor 7 Eastern Oregon University BS in Public Administration 1,000$ 2/19/201501/29/15 Jonathan Donahue Pierce Public Safety Officer 4.5 Columbia Southern University Occupational Safety & Health 630$ 2/19/201502/09/15 Kathryn Rasmussen Community Grant Specialist 14 North Seattle College CPA 600$ 2/19/201502/12/15 Krista Mitchell Clallam Admin Services Assistant 9 Inistute of Public Procurement Certified Professional Public Buyer 1,000$ 2/19/201502/13/15 Donna Hall WTA Supervisor 12.5 Whatcom Community College Public Administration 1,000$ 2/19/201502/14/15 Jessica Bennett Link Admin Assist - Ops 9 Wenatchee Valley College BS in Admin Management @ CWU 1,000$ 2/19/2015

TOTAL 7,230$ 7,230$ 12,770$

05/14/15 Jonathan Donahue Pierce Public Safety Officer 4.5 Columbia Southern University B.S Occupational Safety & Health 370$ 5/28/2015

05/04/15 Lourdes Shuart Island Operations Support5 UW Professional & Continuing

EducationCertificate in HTML5, CS3 & Responsive Design in Web Development 1,000$ 5/28/2015

05/14/15 Emily Bergkamp Intercity Dial-A-Lift Manager 11 University of Washington Graduate Degree in Public Administration 1,000$ 5/28/201505/15/15 Sonya McKibbon Clallam Ops Office Manager 7.25 ICS - CERT ICS Cybersecurity (301) 5-days 1,000$ Subject to acceptance in program 6-15-2015

3,370$ 10,600$ 9,400$ TOTAL

Jeffery S. Ristau Scholarship 03/01/15

Jeffery S. Ristau Scholarship 05/15/15

WASHINGTON STATE TRANSIT INSURANCE POOL

WSTIP

Strategic Plan

AN ORGANIZATIONAL DEVELOPMENT PROCESS

April 2015

STRATEGIC PLAN Introduction Each year the Washington State Transit Insurance Pool (WSTIP) faces challenging issues. Many of these issues are directly related to the diversity of the operations of its members and the challenge of providing insuring and risk management products some of which are in competition with a global insurance industry. The members of WSTIP recognize that they are the best judges of their own operations, and that pooling their financial and knowledge resources offers them a potential level of service not available from commercial insurers. WSTIP recognizes that it must continually use its member knowledge, consultants and professional staff expertise, and sound risk management principles to continuously upgrade its products and services. Mission/Vision Statement-Strategic Objectives The mission of the Washington State Transit Insurance Pool is simple, broad and all encompassing. The mission is to reduce member agencies cost of risk. The organization’s vision is to be the premier provider of high-quality, cost effective risk management products and services for its member agencies. Core Values The mission and vision is derived from the stated core values of the organization, which in turn support the implementation of the mission and vision:

• Integrity: Doing the right thing. Member representatives and staff strive to always be honest and

straightforward with each other, operating within the letter and spirit of the law, and utilizing all available tools to recognize, assess, and manage risk.

• Leadership: Vision, Focus, and Results. Member representatives and staff have a clear vision of where the Pool is going, focusing resources on Board defined objectives and strategies, developing collaboration skills, and taking on assigned areas of responsibility with a deep commitment to deliver results.

• Ownership: We’re all in this together. Member representatives place the interests of the Pool above the interests of their member systems, understanding that all members benefit most when the Pool is successful. This includes accepting responsibility for the entire Pool’s needs, and seeking not only to improve their own systems but others’ as well.

• Enthusiasm for Success: Determined to be great. Member representatives and staff are determined to be the best at what matters most. They have a healthy dissatisfaction with the status quo, a compelling desire to improve and excel, and are committed to excellent customer service.

• Trust: Good people doing great work. Member representatives and staff respect Pool colleagues, members, and stakeholders, treating them as they would want to be treated. They have confidence in each other’s capabilities and intentions, and believe people work best when there is a foundation of trust.

2 | P a g e

Long-Range Strategic Vision The WSTIP Board has adopted a Financial Target Policy that essentially states…to the maximum extent feasible, in the adoption of the Pool’s annual budget, incorporate allocations and contributions which allow and support an optional self-insured retention for liability exposures of $5 million by 2023. Strategic Planning-Implementing the WSTIP Policy Manual In addition to the long-range strategic vision of this Strategic Plan lies the WSTIP Policy Manual. The policy manual provides for the Board’s direction in the areas of Foundational documents, Governance, Operations, Finance with measurable outcomes and assigned responsibilities. Rather than engage in a process that is staff and paper intensive and duplicative of the Policy Manual, the WSTIP Board has concentrated on key strategic outcomes and emerging issues focused around several strategic objectives. The broad strategic objectives incorporated herein are ongoing in nature. Each year, supporting operational plans will be developed to focus the staff and membership on continuously improving the outcomes in each broad area. The Board recognizes that its role is to develop the strategic direction contained in the plan and evaluate the organization's efforts to achieve that plan. The strategic and operational objectives are the centerpiece of each annual work plan implemented through the administrative budget. In this respect, the Board has committed to evaluating the progress of the Pool’s Executive Director’s and the implementation of the annual work plan. Strategic Objectives: #1: Improve the efficiency and effectiveness of existing products, services and business practices

A. Products and Services:

• Conduct a member satisfaction survey triennially of product and services provided.

• Conduct an annual staff review of products and services to determine member utilization, cost of delivery and effectiveness in implementing stated program objectives.

• Loss prevention focus:

o Increase mobility device securement on Fixed route and Paratransit Modes -

Through education and products, reduce personal injuries due to the lack of appropriate mobility device securement.

o Reduce at fault rear-end events – Review potential after-market collision avoidance technologies or adaptive braking systems that warn or take action prior to rear-end accident.

3 | P a g e

o Reduce pedestrian strikes – Review potential after-market collision avoidance

technologies or adaptive braking systems that warn or take action to a pedestrian strike.

B. Business Practices:

• In addition to the annual actuarial study, the Pool shall undertake a triennial Capital Solvency study to determine and/or recommend the annual reserves needed to achieve the self-insured retention set for the year 2023.

• Implement a review every three years of both Mandatory and Advisory Best Practices

with member agencies and report findings to Board. #2: Provide competitive and stable insuring rates

• Annually, staff will develop and implement a plan to achieve the current year Capital Solvency Targets as authorized by the Board.

• As directed, test WSTIP pricing against the commercial market place to assure price

competitiveness. #3: Develop Staff and Board Resources

• Provide an annual new or newly appointed director’s orientation in addition to one on one orientation once an appointment has been made.

• Develop and implement a succession and business continuity plan for key executive staff

positions

• Provide continuing education opportunities for Board members to expand their knowledge of Pooling and Pool governance.

#4: Develop new products and services to meet member needs

• Survey membership on risk management issues and needs.

• Evaluate emerging risk exposures, threats and trends, (i.e. cyber liability, changing ridership profile, collision avoidance technology) and develop educational and risk management tools to assist member agencies in addressing them.

• Evaluate both traditional (Pool developed and ran) and non-traditional (outsourcing,

partnership, etc.) approach to addressing identified membership needs.

4 | P a g e

See accountants' compilation report

Washington State Transit Insurance Pool Treasurer's Report

Date: April 30, 2015

To: WSTIP Board Members

Subject: Treasurer's Report April 30, 2015

The following is a summary of the cash and investment status as of April 30, 2015Item Rate Account Balance % of Total

US Bank Claims 0.05% 171,755 0.398%

US Bank Administration 0.05% 145,206 0.337%

US Bank - Payroll 40,453 0.094%

Wa State Local Government Investment Pool 0.15% 605,820 1.404%

Thurston County Investment Pool 0.66% 42,180,629 97.767%

Cash and Equivalents: 43,143,863$ 100.00%

Washington State Transit Insurance Pool Statement of Income

April 30, 2015% of Fiscal Period Passed:

33.33%


Page 1 of 3

April 30, 2015 YTD INCOME ACTUAL BUDGET YEARLY BUDGET % of Budget

IncomeMEMBER CONTRIBUTIONS

Asotin County 3,355$ 13,420$ 13,420$ 40,259$ 33.33%Ben Franklin 72,185 288,741 288,741 866,222 33.33%Clallam 26,910 107,641 107,641 322,922 33.33%Columbia County 3,340 13,360 13,360 40,081 33.33%Community 149,286 597,144 597,144 1,791,432 33.33%C-Tran 71,827 287,308 287,308 861,923 33.33%RiverCities 6,430 25,720 25,720 77,161 33.33%Everett Transit 22,621 90,486 90,486 271,457 33.33%Grant Transit Authority 14,209 56,837 56,837 170,510 33.33%Grays Harbor 16,649 66,598 66,598 199,793 33.33%Intercity 89,076 356,304 356,304 1,068,911 33.33%Island 27,665 110,165 109,671 329,013 33.48%Jefferson 8,762 35,047 35,047 105,140 33.33%Kitsap 59,680 238,718 238,718 716,155 33.33%Link 26,349 105,398 105,398 316,193 33.33%Mason 15,725 62,899 62,899 188,697 33.33%Pacific 5,448 21,790 21,790 65,371 33.33%Pierce Transit 185,912 743,650 743,650 2,230,950 33.33%Pullman Transit 5,732 22,928 22,928 68,784 33.33%Skagit 31,113 124,450 124,450 373,351 33.33%Spokane Transit 103,527 414,107 414,107 1,242,322 33.33%Twin Transit 5,068 20,274 20,274 60,821 33.33%Valley Transit 8,646 34,584 34,584 103,751 33.33%Whatcom 39,707 158,830 158,830 476,490 33.33%Yakima 18,772 75,087 75,087 225,262 33.33%

Total MEMBER CONTRIBUTIONS 1,017,994 4,071,484 4,070,990 12,212,971 33.34%

NON-OPERATING REVENUE CJI TournamentInterest Income 22,964 88,698 116,667 350,000 25.34%Training Coalition 6,191 22,046 13,333 40,000 55.12%Lease Payments 1,500 6,000 6,000 18,000 33.33%Other Miscellaneous 950 10,076 16,667 50,000 20.15%

Total NON-OPERATING REVENUE 31,605 126,820 152,667 458,000 27.69%

Total Income 1,049,599 4,198,304 4,223,657 12,670,971 33.13%

Expense

CLAIMS ULAE Liability Claims 512,239 2,048,956 2,048,956 6,146,869 33.33% 1st Party Claims 52,124 208,496 208,496 625,487 33.33%

Total CLAIMS 564,363 2,257,452 2,257,452 6,772,356 33.33%

INSURANCE SERVICES Captive - $3M xs $1M 51,784 207,135 208,333 625,000 33.14%Reinsurance - $8M xs $4M 30,789 123,155 123,333 370,000 33.29%Excess Coverage $12M+ 11,333 45,333 46,667 140,000 32.38%1st Party Property 62,789 251,158 252,639 757,916 33.14%Blanket Pollution 4,192 15,290 16,779 50,337 30.38%Underground Storage Tank Cov. 5,640 22,561 22,561 67,682 33.33%Crime & Fidelity 1,233 4,931 5,305 15,914 30.99%

Total INSURANCE SERVICES 167,760 669,563 675,616 2,026,849 33.03%

CONTRACT SERVICES 26,554 Administrative Services 3,095 7,803 - Contract Web Design - DIS Backup 404 1,211 - Driver Record Monitoring 30,663 106,304 63,041 189,123 56.21%Integrated RiskContract Services 475 7,517 11,333 34,000 22.11%Software Cooperative

Total CONTRACT SERVICES 34,637 122,835 74,374 249,677 49.20%

STAFF WAGES, TAXES & BENEFITS Wages 82,815 330,072 309,446 928,337 35.56%Staff Benefits 13,677 54,616 62,581 187,742 29.09%Retirement Trust ICMA 5,121 20,420 18,929 56,788 35.96%Payroll taxes 1,405 6,154 8,685 26,056 23.62%

Total STAFF WAGES, TAXES & BENEFITS 103,018 411,262 399,641 1,198,923 34.30%

BROKER FEE 50,600 33,733 101,200 50.00%

LEGAL AND ACCOUNTINGAccounting 851 2,687 4,956 14,869 18.07%Legal - General 0.00%



33.33%


Page 2 of 3


Legal - Other 0.00%Total LEGAL AND ACCOUNTING 851 2,687 4,956 14,869 18.07%

ACTUARIAL 18,400 33,667 101,000 18.22%

BOARD EXPENSESJeff Ristau Scholarship 7,230 6,667 20,000 36.15%Conference/Travel - WSTIP Board 10,784 23,577 30,400 91,200 25.85%Board Meeting Expenses 10,068 26,592 18,156 54,467 48.82%

Total BOARD EXPENSES 20,852 57,399 55,222 165,667 34.65%

STAFF CONFERENCES & TRAVEL Staff Travel 4,762 20,473 23,375 70,124 29.20%Staff Registration 63 1,852 3,484 10,451 17.72%Educational Materials

Total STAFF CONFERENCES & TRAVEL 4,825 22,325 26,858 80,575 27.71%

LOSS CONTROL SERVICES Network Security 896 986 75,000 1.31%Loss Prevention Projects 45 45 36,667 110,000 0.04%Vanpool Driver Online Refresher 23,000 0.00%Guest Rider Program 0.00%Contract Services 2,204 18,054 10,333 31,000 58.24%Competitve Grant Program 0.00%Best Practices Work Plan 0.00%Best Practices/Risk Management 15,333 46,000 0.00%Trainers Showcase 2,000 0.00%On-Line Training Programs 0.00%Pre Litigation Fund 8,632 10,172 15,000 45,000 22.60%Roadeo Sponsorship 12,000 0.00%Video Purchases 990 1,500 66.00%Diamond Award 8,500 0.00%Golden Coach Award 0.00%Best Practices Award 66,000 0.00%Risk Management Grants 10,000 20,000 0.00%Grants/Training - Other - 0.00%Recognition 33 33 0.00%Training Coalition 9,615 13,015 13,333 40,000 32.54%Loss Control Services - Other 0.00%

Total LOSS CONTROL SERVICES 31,425 63,295 102,333 460,000 13.76%

COMMUNICATIONS Telephone 1,272 4,225 4,800 14,400 29.34%Internet Access 646 1,582 1,400 4,200 37.67%

Total COMMUNICATIONS 1,918 5,807 6,200 18,600 31.22%

OCCUPANCY COSTS Utilities 1,296 3,443 4,800 14,400 23.91%Janitorial Services 301 903 1,667 5,000 18.06%Maintenance/Repairs 4,132 7,758 4,000 12,000 64.65%Office Equipment Lease 482 1,927 2,000 6,000 32.12%

Total OCCUPANCY COSTS 6,211 14,031 12,467 37,400 37.52%

OFFICE EXPENSES Dues and Subscriptions 521 7,357 3,342 10,026 73.38%Postage 314 1,399 1,187 3,562 39.28%Printing & Graphic Services 1,751 4,282 4,238 12,715 33.68%Office Supplies 1,732 7,207 6,124 18,373 39.23%MiscellaneousNon-Capital Equipment

Total OFFICE EXPENSES 4,318 20,245 14,892 44,676 45.32%

AUDITS St. R/M Audit and Assessment 5,591 16,774 0.00%Property Audits 1,500 1,500 3,333 10,000 15.00%Annual Audit 5,867 3,485 10,455 56.12%

Total AUDITS 1,500 7,367 12,410 37,229 19.79%

INFORMATION SERVICESComputer maintenance/support 60,835 21,954 65,862 92.37%Software/licenses/upgrades 354 2,405 3,300 9,900 24.29%RMIS Purchase 206,164 206,164 250,000 82.47%Hardware/upgrades/replacement 521 660 10,500 6.29%New Initiatives Web Site Update 9,995 18,333 55,000 18.17%

Total INFORMATION SERVICES 207,039 280,059 43,587 391,262 71.58%

MISCELLANEOUSLease-Hold Rent Taxes 378



33.33%


Page 3 of 3


CJI TournamentMiscellaneous 667 2,000 0.00%

Total MISCELLANEOUS - 378 667 2,000 18.90%

DEPRECIATION 1,713 6,853 6,853 20,560 33.33%

Total Administration Expenses 1,150,430 4,010,558 3,760,930 11,722,843 34.21%

Net Income (100,831) 187,746 948,128 19.80%

Other Expense

Total Other Expense

Net Income (100,831)$ 187,746$

Washington State Transit Insurance Pool Balance Sheet

April 30, 2015


ASSETSCurrent Assets

Checking/SavingsU S Bank Claims 171,755$ U S Bank Administration 145,206 U S Bank Payroll 40,453 LGIP # 02448 605,820 TCIP 42,180,629

Total Current Assets 43,143,863

Other Current AssetsAccounts Receivable 330,883 Prepaid Property Insurance 125,579 Prepaid Underground Storage Insurance 33,841 Prepaid Insurance - Other 761,109

Total Other Current Assets 1,251,412

Fixed AssetsBuilding 387,990 Improvements 63,890 Land 91,010 Equipment & fixtures 213,461 Computer Equipment 27,301 Accumulated depreciation (363,653)

Total Fixed Assets 419,999

Other AssetsGEM Insurance Company 1,662,570

Total Other Assets 1,662,570

Total Assets 46,477,844

LIABILITIES & EQUITYCurrent Liabilities

Deferred Compensation Payable 145,962 Deferred Revenue 8,141,981 Accounts Payable 174,335 Payroll Taxes Payable 19,275 Reserve for Claims

2006 Reserve Balance 129,721 2008 Reserve Balance 80,551 2009 Reserve Balance 88,034 2010 Reserve Balance 375,655 2011 Reserve Balance 3,712,126 2012 Reserve Balance 1,879,484 2013 Reserve Balance 2,571,581 2014 Reserve Balance 5,931,286 2015 Reserve Balance 2,128,471

635,000 Tota ULAE Reserve 17,531,909

Total Current Liabilities 26,013,462

Equity Invested in Capital Assets, Net of Related Debt 435,065 Unrestricted Building Reserve Fund 56,193 Beginning Surplus 36,293,532 Reserve for Prior Year Claims (16,555,981) Net Change in Claim Reserves 47,828

Net Income 187,745 Total Equity 20,464,382

46,477,844$

05/31/2015 WSTIP RiskmasterClaims Data2006 to 2015

(A) (B)Year Ultimate Net Loss Gross Paid Recovery Net Paid Reserves IBNR RM Incurred Outstand Liab2006 4,675,638 5,476,835 930,398 4,546,437 69,721 59,480 4,616,158 129,201 2007 2,424,346 3,314,775 890,429 2,424,346 0 - 2,424,346 - 2008 5,130,425 7,247,609 2,187,900 5,059,709 69,836 880 5,129,545 70,716 2009 4,486,069 5,510,578 1,112,543 4,398,035 0 88,034 4,398,035 88,034 2010 6,287,261 6,871,085 853,652 6,017,433 26,696 243,132 6,044,129 269,828 2011 9,184,358 14,547,436 8,661,135 5,886,301 2,743,836 554,221 8,630,137 3,298,057 2012 4,754,643 3,930,484 863,231 3,067,253 1,695,636 4,762,889 1,695,636 2013 5,051,579 3,067,277 553,918 2,513,359 1,181,876 1,356,344 3,695,235 2,538,220 2014 7,047,009 1,861,209 697,943 1,163,266 3,283,208 2,600,535 4,446,474 5,883,743 2015 2,821,815 239,166 54,070 185,096 581,376 2,055,343 766,472 2,636,719

Totals 51,863,143 52,066,454 16,805,219 35,261,235 9,652,185 6,957,969 44,913,420 16,610,154 ULAE 635,000

Recovery=Deductible Payments, Salvage, Excess Insur, Refunds and Subrogation Outstand Liab 17,245,154

Net Paid=Gross Paid-Recovery A BYear Open Claims Total Claims Year UNL/Claim RM Incurred/Claim

Incurred=Reserves+Net Paid 2006 1 745 2006 6,276$ 6,196$ 2007 0 802 2007 3,023$ 3,023$

IBNR= Ult loss -Reserve-Paid 2008 1 839 2008 6,115$ 6,114$ 2009 0 860 2009 5,216$ 5,114$

Liab=Res+IBNR 2010 3 1104 2010 5,695$ 5,475$ 2011 9 1035 2011 8,874$ 8,338$

Recovery is on an accrual basis 2012 20 1013 2012 4,694$ 4,702$ 2013 81 1121 2013 4,506$ 3,296$ 2014 145 1058 2014 6,661$ 4,203$ 2015 29 284 2015 9,936$ 2,699$ Totals 289 8861 Total 5,853 5,069$

05/31/2015 WSTIP RiskmasterClaims Data2006 to 2015

May-15Year Frequency Severity

2006 745 6,196$ 2007 802 3,023$ 2008 839 6,114$ 2009 860 5,114$ 2010 1104 5,475$ 2011 1035 8,338$ 2012 1013 4,702$ 2013 1121 3,296$ 2014 1058 4,203$ 2015 284 2,699$

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015May-15 69,721 0 69,836 0 26,696 2,743,836 1,695,636 1,181,876 3,283,208 581,376Apr-15 129,721 0 79,671 0 301,695 2,760,971 1,797,406 1,212,909 3,607,275 179,927Mar-15 129,721 0 79,671 0 230,364 3,448,485 1,778,748 1,275,421 3,630,510 155,531

0

200

400

600

800

1000

1200

$-

$2,000

$4,000

$6,000

$8,000

$10,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Frequency and Severity 2006 to 2014

Severity Frequency

0

1,000,000

2,000,000

3,000,000

4,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

Claims Reserves (2006 to 2015)Most current 3 months

May-15 Apr-15 Mar-15

Riskmaster ReportDefinitions

Riskmaster Terms

Ultimate Net Loss The sum of all costs that an insured or insurer is legally obligated to pay as the result of a claim, including judgments or compromises, legal, medical and investigation expenses, minus any salvage, subrogation and reinsurance.

Gross Paid Indemnity and expense payments by loss year not adjusted for any offsets

Recovery Deductible Payments, Salvage, Excess Insur, Refunds and Subrogation offsets

Net Paid Gross paid - recovery

Reserves Staffs best estimate of the ultimate outcome of a particular claim by loss year

IBNR Incurred but not reported claims by loss year (actuarial estimate)

RM Incurred Reserves + Net Paid

Outstand Liab Reserves + IBNR

2006 had one liability event where the exposure was greater than the self insured retention2008 had three liability events where the potential exposure was greater than the self insured retention2009 has one liability event where the exposure was greater than the self insured retention2011 has three liability events where the exposure maybe greater than the self insured retention2012 has one liability event where the exposure maybe greater than the self insured retention2014 has two liability events where the exposure maybe greater than the self insured retention

2011 has one property event where the exposure was significantly greater than the self insured retention

Pierce Transit data is included effective 1-1-2010

C-Tran data is included effective 1-1-2011

Year Claims Mileage Per Million Miles2006 745 67,961,390 10.962007 802 70,253,439 11.422008 839 76,286,441 11.002009 860 77,854,640 11.052010 1,104 95,228,976 11.592011 1,035 99,861,345 10.362012 1,013 95,224,448 10.642013 1,121 98,019,186 11.442014 1,058 98,413,169 10.752015 284 40,725,997 6.97

Total 8,861 779,103,034 10.62

% Change 2014 vs 10 YR Avg1.25%

% Change 2015 Avg vs 2014 Avg-35.13%

PIERCE TRANSIT ADDED FOR 2010 and C-Tran 2011

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

0

200

400

600

800

1,000

1,200

2006 2007 2008 2009 2010 2011 2012 2013 2014

Claims Mileage

Washington State Transit Insurance Pool Balance Sheet Prev Year Comparison

As of April 30, 2015

Page 1 of 7

Apr 30, 15 Apr 30, 14 $ Change % Change

ASSETS

Current Assets

Checking/Savings

1000 · Bank Accounts

US Bank Claims 171,755 423,897 -252,142 -59.48%

US Bank Administration 145,206 119,415 25,792 21.6%

US Bank Payroll 40,453 26,356 14,097 53.49%

100 · Cash on Hand and on Deposit 0 400 -400 -100.0%

Total 1000 · Bank Accounts 357,414 570,068 -212,654 -37.3%

105 · LGIP # 02448 605,820 605,146 674 0.11%

TCIP 42,180,629 39,568,565 2,612,064 6.6%

Total Checking/Savings 43,143,863 40,743,779 2,400,084 5.89%

Accounts Receivable

118 · Accounts receivable 330,883 302,397 28,486 9.42%

Total Accounts Receivable 330,883 302,397 28,486 9.42%

Other Current Assets

Prepaid Insurance

Prepaid Underground Storage Ins 33,841 28,537 5,304 18.59%

P · Prepaid Property Insurance 125,579 112,772 12,807 11.36%

Prepaid Pollution Liability Ins 0 44,884 -44,884 -100.0%

Prepaid Insurance - Other 761,109 919,425 -158,315 -17.22%

Total Prepaid Insurance 920,530 1,105,617 -185,088 -16.74%

Total Other Current Assets 920,530 1,105,617 -185,088 -16.74%

Total Current Assets 44,395,276 42,151,794 2,243,482 5.32%

Fixed Assets

Computer Equipment 27,301 27,301 0 0.0%

Building

Leasehold Improvements 63,890 63,890 0 0.0%

Building - Other 387,990 387,990 0 0.0%

Total Building 451,880 451,880 0 0.0%

Land 91,010 91,010 0 0.0%

200 · Equipment 42,943 42,943 0 0.0%

207 · Equipment & fixtures 170,518 170,518 0 0.0%

250 · Accumulated depreciation -363,653 -341,942 -21,711 -6.35%

Total Fixed Assets 419,999 441,710 -21,711 -4.92%

Other Assets

GEM Insurance Company 1,662,570 1,480,218 182,351 12.32%

Total Other Assets 1,662,570 1,480,218 182,351 12.32%TOTAL ASSETS 46,477,844 44,073,722 2,404,122 5.46%

Washington State Transit Insurance Pool Balance Sheet Prev Year Comparison

As of April 30, 2015

Page 2 of 7

Apr 30, 15 Apr 30, 14 $ Change % Change

LIABILITIES & EQUITY

Liabilities

Current Liabilities

Accounts Payable

300 · Accounts payable

301 · Claims Payments 161,789 41,687 120,102 288.1%

300 · Accounts payable - Other 12,547 5,042 7,505 148.85%

Total 300 · Accounts payable 174,335 46,729 127,607 273.08%

Total Accounts Payable 174,335 46,729 127,607 273.08%

Other Current Liabilities

Deferred Revenues 8,141,981 7,707,101 434,880 5.64%

365 · Deferred Compensation Payable 145,962 130,383 15,579 11.95%

2000 · Taxes Payable

320 · Payroll Taxes - L&I 0 227 -227 -100.0%

330 · Payroll taxes payable 5,281 0 5,281 100.0%

2100 · Payroll Liabilities

2101 · Employee FSA 347 -1,947 2,293 117.8%

2102 · WA State Dept of Retirement 5,891 5,920 -29 -0.49%

2103 · Retirement Trust ICMA 7,757 6,231 1,526 24.49%

Total 2100 · Payroll Liabilities 13,994 10,204 3,790 37.14%

Total 2000 · Taxes Payable 19,275 10,431 8,843 84.78%

380 · Reserve for Claims

398 · 2006 Reserve Balance 129,721 329,438 -199,717 -60.62%

399 · 2007 Reserve Balance 0 124,029 -124,029 -100.0%

402 · 2008 Reserve Balance 80,551 77,871 2,681 3.44%

403 · 2009 Reserve Balance 88,034 262,833 -174,799 -66.51%

404 · 2010 Reserve Balance 375,655 1,702,697 -1,327,042 -77.94%

405 · 2011 Reserve Balance 3,712,126 4,013,831 -301,705 -7.52%

406 · 2012 Reserve Balance 1,879,484 2,356,489 -477,005 -20.24%

407 · 2013 Reserve Balance 2,571,581 3,844,011 -1,272,431 -33.1%

408 · 2014 Reserve Balance 5,931,286 2,174,572 3,756,714 172.76%

409 · 2015 Reserve Balance 2,128,471 0 2,128,471 100.0%

400 · ULAE Reserve 635,000 610,000 25,000 4.1%

Total 380 · Reserve for Claims 17,531,910 15,495,770 2,036,139 13.14%

Total Other Current Liabilities 25,839,127 23,343,685 2,495,442 10.69%

Total Current Liabilities 26,013,463 23,390,414 2,623,049 11.21%

Total Liabilities 26,013,463 23,390,414 2,623,049 11.21%

Equity

Building Reserve Fund 56,193 49,115 7,078 14.41%

3000 · Surplus for Open Years 10,108,259 10,875,909 -767,650 -7.06%

410 · Members' Reserve 10,112,184 9,530,173 582,011 6.11%

Net Income 187,745 228,112 -40,366 -17.7%

Total Equity 20,464,382 20,683,308 -218,927 -1.06%TOTAL LIABILITIES & EQUITY 46,477,844 44,073,722 2,404,122 5.46%

Comparative Income and Expense StatementApril 2015 to April 2014

Jan - Apr 15 Jan - Apr 14 $ Change % Change

Ordinary Income/Expense

Income

501 · MEMBER CONTRIBUTIONS

501-25 · Asotin County 13,420 10,702 2,717 25.39%

501-01 · Ben Franklin 288,741 300,651 -11,910 -3.96%

501-02 · Clallam 107,641 95,080 12,561 13.21%

501-21 · Columbia County 13,360 13,480 -120 -0.89%

501-03 · Community 597,144 572,190 24,954 4.36%

501-27 · C-TRAN 287,308 242,472 44,836 18.49%

501-22 · RiverCities 25,720 24,292 1,428 5.88%

501-23 · Everett Transit 90,486 79,095 11,390 14.4%

501-14 · Grant Transit Authority 56,837 43,591 13,246 30.39%

501-04 · Grays Harbor 66,598 68,480 -1,882 -2.75%

501-05 · Intercity 356,304 321,083 35,221 10.97%

501-06 · Island 110,165 146,247 -36,082 -24.67%

501-07 · Jefferson 35,047 30,967 4,080 13.18%

501-08 · Kitsap 238,718 211,369 27,349 12.94%

501-09 · Link 105,398 92,215 13,183 14.3%

501-11 · Mason 62,899 58,094 4,805 8.27%

501-10 · Pacific 21,790 20,377 1,413 6.94%

501-26 · Pierce Transit 743,650 752,894 -9,244 -1.23%

501-16 · Pullman Transit 22,928 18,912 4,016 21.24%

501-12 · Skagit 124,450 115,655 8,796 7.61%

501-19 · Spokane Transit 414,107 375,419 38,688 10.31%

501-15 · Twin Transit 20,274 17,026 3,248 19.08%

501-20 · Valley Transit 34,584 32,388 2,196 6.78%

501-13 · Whatcom 158,830 149,638 9,192 6.14%

501-24 · Yakima Transit 75,087 69,474 5,613 8.08%

Total 501 · MEMBER CONTRIBUTIONS 4,071,484 3,861,789 209,695 5.43%

504 · NON-OPERATING REVENUE

505 · Interest Income 88,698 75,220 13,478 17.92%

508 · Other Miscellaneous 22,046 20,967 1,078 5.14%

509 · Lease Payments 6,000 6,000 0 0.0%

507 · Training Coalition 10,076 26,543 -16,468 -62.04%

Total 504 · NON-OPERATING REVENUE 126,820 128,731 -1,911 -1.49%

Total Income 4,198,304 3,990,520 207,784 5.21%

Gross Profit 4,198,304 3,990,520 207,784 5.21%

Expense

600 · CLAIMS

601 · Liability Claims 2,048,956 2,047,964 992 0.05%

602 · 1st Party Claims 208,496 249,532 -41,036 -16.45%

Total 600 · CLAIMS 2,257,452 2,297,496 -40,044 -1.74%



610 · INSURANCE SERVICES

626 · Captive - $3M xs $2M Retention 207,135 291,322 -84,188 -28.9%

Reinsurance - $10M xs $5M 123,155 132,471 -9,316 -7.03%

612 · Excess - $5 mill X $15 mill 45,333 31,000 14,333 46.24%

622 · Property 251,158 225,545 25,613 11.36%

Blanket Pollution 15,290 15,327 -37 -0.24%

Underground Storage Tank Cov 22,561 22,561 0 0.0%

624 · Crime and Fidelity 4,931 4,919 12 0.25%

Total 610 · INSURANCE SERVICES 669,563 723,144 -53,581 -7.41%

760 · CONTRACT SERVICES

768 · Driver Record Monitoring 106,304 83,545 22,758 27.24%

702 · Actuary 18,400 18,100 300 1.66%

762 · Administrative services

762.2 · Wellness Committee 137 1,060 -923 -87.07%

762.1 · Credit Card Service Fees 456 190 266 139.57%

762 · Administrative services - Other 7,210 5,439 1,771 32.56%

Total 762 · Administrative services 7,803 6,689 1,114 16.65%

701 · Broker Fee 50,600 0 50,600 100.0%

769 · Rack space at the State 1,211 1,740 -529 -30.39%

767 · Contract Services 7,517 23,081 -15,564 -67.43%

Total 760 · CONTRACT SERVICES 191,835 133,156 58,679 44.07%

720 · STAFF WAGES, TAXES & BENEFITS

719 · Staff Benefits 54,616 50,548 4,068 8.05%

720.1 · Wages 330,072 308,484 21,588 7.0%

720.1.1 · Retirement Trust ICMA 20,419 19,077 1,342 7.04%

725 · Payroll Taxes 6,154 5,959 196 3.29%

Total 720 · STAFF WAGES, TAXES & BENEFITS 411,262 384,067 27,195 7.08%

700 · LEGAL AND ACCOUNTING

703 · Accounting 2,687 2,578 109 4.22%

Total 700 · LEGAL AND ACCOUNTING 2,687 2,578 109 4.22%

730 · BOARD EXPENSES

732.2 · Jeff Ristau Scholarship 7,230 0 7,230 100.0%

731 · Conference/Travel - WSTIP Board

731.2 · Wireless Device Grant 335 4,323 -3,988 -92.24%

731 · Conference/Travel - WSTIP Board - O 23,242 16,756 6,486 38.71%

Total 731 · Conference/Travel - WSTIP Board 23,577 21,079 2,498 11.85%

732 · Board Meeting Expenses 26,592 14,551 12,041 82.75%

Total 730 · BOARD EXPENSES 57,399 35,630 21,769 61.1%

733 · STAFF CONFERENCES & TRAVEL

Staff Travel 20,472 19,152 1,321 6.9%

Staff Registration 1,852 1,763 89 5.05%

Total 733 · STAFF CONFERENCES & TRAVEL 22,324 20,915 1,410 6.74%

740 · LOSS CONTROL SERVICES

Network Security 986 0 986 100.0%



Loss Prevention Projects

Collision Avoidance Technology 45 0 45 100.0%

Loss Prevention Projects - Other 0 7,894 -7,894 -100.0%

Total Loss Prevention Projects 45 7,894 -7,849 -99.43%

Contract Services

MRSC and WSTA 10,000 0 10,000 100.0%

MSDS Online 5,850 0 5,850 100.0%

Guest Rider Program 1,048 445 602 135.27%

Contract Services - Other 1,156 9,701 -8,545 -88.08%

Total Contract Services 18,054 10,146 7,907 77.93%

761 · Best Practices/Risk Mgmt Scvs

On-Line Training Programs 0 5,850 -5,850 -100.0%

Total 761 · Best Practices/Risk Mgmt Scvs 0 5,850 -5,850 -100.0%

Pre-Litigation Fund 10,172 16,529 -6,357 -38.46%

741 · Grants/Training

Video Purchases 990 924 66 7.14%

Risk Management Grants 20,000 0 20,000 100.0%

Total 741 · Grants/Training 20,990 924 20,066 2,171.65%

743 · Recognition 33 261 -228 -87.5%

800 · Training Coalition 13,015 20,501 -7,486 -36.52%

Total 740 · LOSS CONTROL SERVICES 63,295 62,105 1,189 1.92%

770 · COMMUNICATIONS

772 · Telephone 4,225 4,162 63 1.51%

771 · Internet Access 1,582 1,063 519 48.86%

Total 770 · COMMUNICATIONS 5,807 5,225 582 11.14%

777 · OCCUPANCY COSTS

778 · Office Maintenance/Repairs 7,758 3,139 4,619 147.16%

773 · Utilities 3,442 3,727 -285 -7.63%

758 · Janitorial Services 904 804 100 12.44%

774 · Office Equipment Lease 1,927 1,927 0 0.0%

Total 777 · OCCUPANCY COSTS 14,031 9,596 4,434 46.21%

749 · OFFICE EXPENSES

752 · Dues and Subscriptions 7,357 6,652 705 10.59%

757 · Office Supplies 7,207 8,587 -1,379 -16.07%

754 · Postage 1,399 1,012 388 38.34%

753 · Printing & Graphic Services 4,282 5,239 -957 -18.26%

Total 749 · OFFICE EXPENSES 20,246 21,489 -1,243 -5.79%

802 · AUDITS

803 · St. R/M Audit and Assessment 5,867 5,867 0 0.0%

805 · Property/ Claims/AGRIP Audits 1,500 0 1,500 100.0%

Total 802 · AUDITS 7,367 5,867 1,500 25.57%



INFORMATION SERVICES

750 · Software/Licenses/Upgrades 2,405 4,294 -1,889 -44.0%

764 · Computer Maintenance/Support 60,835 46,207 14,628 31.66%

790 · RMIS Purchase 206,164 0 206,164 100.0%

791 · Hardware/Upgrades/replacements 660 4,558 -3,898 -85.51%

792 · New Initiatives Web Site Update 9,995 0 9,995 100.0%

Total INFORMATION SERVICES 280,059 55,059 225,000 408.65%

MISCELLANEOUS

Lease-Hold Rent Taxes 378 378 0 0.01%

Total MISCELLANEOUS 378 378 0 0.01%

759 · DEPRECIATION 6,853 5,702 1,151 20.19%

Total Expense 4,010,558 3,762,409 248,150 6.6%

Net Ordinary Income 187,745 228,112 -40,366 -17.7%Net Income 187,745 228,112 -40,366 -17.7%

Cash Flows 2015

Jan - Apr 15

OPERATING ACTIVITIES

Net Income 187,745.48

Adjustments to reconcile Net Income

to net cash provided by operations:

118 · Accounts receivable -294,346.92

Prepaid expenses 19,622.36

Prepaid Insurance -761,109.49

Prepaid Insurance:Prepaid Underground Storage Ins 22,560.68

Prepaid Insurance:P · Prepaid Property Insurance 251,158.00

Prepaid Insurance:Prepaid Pollution Liability Ins 15,289.93

300 · Accounts payable -1,958.24

300 · Accounts payable:301 · Claims Payments 161,788.50

Deferred Revenues 8,141,980.68

2000 · Taxes Payable:330 · Payroll taxes payable 5,280.62

2000 · Taxes Payable:2100 · Payroll Liabilities:2101 · Employee FSA -1,278.68

2000 · Taxes Payable:2100 · Payroll Liabilities:2102 · WA State Dept of Retirement 158.66

2000 · Taxes Payable:2100 · Payroll Liabilities:2103 · Retirement Trust ICMA 550.00

380 · Reserve for Claims:398 · 2006 Reserve Balance -40.00

380 · Reserve for Claims:402 · 2008 Reserve Balance -2,454.28

380 · Reserve for Claims:403 · 2009 Reserve Balance -30.00






380 · Reserve for Claims:409 · 2015 Reserve Balance 2,128,471.49

Net cash provided by Operating Activities 8,723,370.74

INVESTING ACTIVITIES

250 · Accumulated depreciation 6,853.32

Net cash provided by Investing Activities 6,853.32

FINANCING ACTIVITIES

Building Reserve Fund 15,000.00

3000 · Surplus for Open Years -125,732.00

Net cash provided by Financing Activities -110,732.00

Net cash increase for period 8,619,492.06

Cash at beginning of period 34,524,371.18Cash at end of period 43,143,863.24

June 19, 2015 TO: WSTIP Board of Directors FROM: Al Hatten, Executive Director; Jerry Spears, Deputy Director;

& Tracey Christianson, Member Services Manager SUBJECT: Executive Management Staff Report – June 2015 WSTIP INTERLOCAL AGREEMENT AND MUTUAL AID AGREEMENT With the exception of Spokane and Pullman Transits, 23 members have signed the new Interlocal Agreement (ILA). It’s anticipated that Spokane and Pullman will sign upon receiving from the Executive Director a memorandum affirming that coverage following a member’s separation will continue for the coverage periods previously paid. In related news, 12 member transits have also signed the mutual aid agreement. JEFFREY S. RISTAU SCHOLARSHIP At the last Executive Committee meeting, the Committee reviewed the terms, conditions and process of the Jeffrey S. Ristau (JSR) Scholarship. One outstanding question was the recipient’s taxability of any scholarship in excess of $600. Staff contacted our certified public accountant and he advised that the scholarships are “NOT” taxable if they are used with an accredited college or university. It is taxable for all other awards if above $600. Staff proposed to the Executive Committee that if the scholarship is not in conjunction with an accredited university or college the award will not exceed the amount of $500. New grantees will be announced at the Board meeting under a separate agenda item. WSTIP STRATEGIC PLAN The draft WSTIP strategic plan was approved by the Executive Committee on April 16 and will be presented to the Board at the June meeting. Once approved by the WSTIP Board, staff will present a draft timeline and engage the Executive Committee on what constitutes expected deliverables; reporting out process and how the strategic plan will be incorporated in future Executive Committee annual work plans. STATE RISK MANAGER AUDIT On May 5th, the State Risk Manager submitted her compliance report as stipulated in RCW 48.62.and WAC 200-100. A copy is available upon request. SENATE BILL 5119 An act relating to nonprofits risk pools. Passed by both the House and Senate on or before April 10, 2015 and signed by the Governor on April 17, 2015. A copy is available upon request. PROPOSED BYLAW CHANGES The Executive Committee will be discussing a proposed change to the WSTIP Bylaws that may refine the filling of vacated officer’s positions during the unexpired term remaining as a separate agenda item.

GEM UPDATES The following is a synopsis of the major discussions and decisions that occurred at the GEM Board Meeting in Washington, DC on April 23, 2015. Acceptance of the 2014 Actuarial Loss Reserve Certification The Board formally accepted the 2014 Milliman Loss Reserve Certification and Opinion presented by Tim Cremin, FCAS, MAAA. Similar to last year, the loss reserve certification is $3 million higher than the central point estimate as calculated by Milliman. This amount is the Board – approved loss reserve stabilization fund. The Board also formally accepted the policy outlining how this reserve can be used. Acceptance of the 2014 Audited Financial Statements The Board formally accepted the 2014 audited financial statements for GEM, as prepared by Saslow, Lufkin & Buggy. For the year ended December 31, 2014, GEM reported net income of $3.6 million, a high water mark for the Company. Glenn Saslow said it was a clean audit opinion and there were no management letter issues. The Annual Report will be presented at the July Annual Meeting in Portland, OR. Copies will be sent to all member pools. 2016 Member Premium Credit The Board voted not to accept management’s recommendation for creation of a premium credit to be paid beginning in 2016. The Board felt that this issue needed to be addressed as part of the macro review of GEM’s capital position scheduled for the July Board meeting. Management has been asked to provide several different pro formas, based on risk-based capital measures, for the Board to react to at the meeting. 2015 District of Columbia Business Plan Management presented the required biennial GEM business plan required to be filed with the District of Columbia. The Board reviewed the updated plan and pending some minor corrections and amplifications approved filing the plan with the DISB. Marketing Plan Management presented the proposal received for the creation of a GEM marketing plan. In doing so, management requested the Board comment on any additional items that it would like to see covered in the preliminary analysis. Management indicated it would sign a contract with Bechamps & Associates and they would be present at the July Board meeting to provide a preliminary analysis. Task Force Update The work to secure a $10 million liability treaty continues on pace with meetings scheduled for late May with a number of interested reinsurers. JLT Towers will be present at the July meeting to report back on the proposals and outline its recommended course of action. March 2015 Financials Unlike the last two years, losses in 2015 have been substantially higher than budgeted. As a result the loss ratio, set at 80% in the budget, climbed to 81.1% as of March 31st. This resulted in GEM posting a net loss for the quarter of $1.2 million. Assuming this trend continues, it is likely GEM will report a net loss for 2015, breaking the string of three consecutive years of steady net income growth. However, this is not surprising considering GEM is subject to severity volatility and it is the confluence of large claims that led to the loss for the quarter.

Page 2 of 6

UPCOMING WSTIP MEETINGS 2015 July 30 – Executive Committee Meeting in Olympia August 27 – Executive Committee Meeting in Olympia

September 24 & 25 Executive Committee and Quarterly Board Meeting in Wenatchee (Claim Jumper Invitational on September 24th)

October 22 – Executive Committee Meeting in Olympia December 10 & 11 – Annual Meeting - Olympia STAFF/MEMBER REP OUT-OF-STATE TRAVEL 2015 July 22 – 24 GEM Annual Meeting and Summit – Portland, OR

August 2 – 5 - AON Risk Pooling Symposium -The Ritz-Carlton - Naples, FL August 9 – 12 – AGRIP CEO and Senior Staff Institute - Coeur d'Alene Resort, ID August 23 – 26 – Public Transportation Conference and Vendor Expo – Vancouver, WA

September 14 – 16 – CAJPA Annual Conference – Lake Tahoe, CA October 4 – 7 – AGRIP Fall Educational Forum – Chicago, IL October 28 – 30 GEM Board meeting – Newport, RI 2016 February 9 – 12 – GEM Board meeting – Clearwater, FL March 6 – 9 – AGRIP Governance and Leadership Conference - TBA April 20 -22 – GEM Board meeting – Washington DC MEMBER SERVICES ACTIVITIES Risk Profiles and Annual Report – The Risk Profiles and Annual Report will be distributed at this meeting. Transit Agency Visits - Chris has completed visits the following agencies to date: Asotin, Ben Franklin, C-Tran (2), Columbia, Community, Everett, Grant, Intercity, Kitsap, Link (2), Mason, Pierce, Pullman, RiverCities (2), Skagit, Spokane (2), Twin, Valley and Yakima. Additionally Joanne has completed vanpool reviews for C-Tran, Community, Grays Harbor, Intercity, River Cities, and Yakima. Drug and Alcohol / Reasonable Suspicion – Chris has conducted training classes on the topic of Reasonable Suspicion for Supervisors (Drug and Alcohol) at these agencies request: Intercity, River Cities and Yakima. If you are interested in scheduling a class for your supervisors, please contact Chris or Joanne. Washington State Transportation Training Coalition – The Training Coalition’s current two-year contract is coming to a close on June 30, 2015. The allowed expenditure amount was $171,520 which included funds for the development and delivery of the Train the Trainer: Dispatch Training Program. We have spent all but a few thousand dollars. Our new two-year agreement, which would start July 1, 2015 and run to June 30, 2017, is expected to allow expenditures to $150,000. We will be renewing that contract by the end of this month. Funding was included for a second roll-out of the Train the Trainer: Dispatch Training Program. That roll-out is anticipated to start in October. Vanpool Driver Online Refresher Training Program – Joanne is contacting vanpool coordinators about their use of the Vanpool Driver Online Refresher Training Program. This cost of this program is included as a part of rate for the uninsured/underinsured motorist program. The following agencies have not loaded drivers in the program: Ben Franklin, C-Tran (no refresher needed until next year), Clallam, Columbia, Grant, Grays Harbor (doing refresher training in person), Pierce, Valley, Whatcom, and Yakima.

Page 3 of 6

Best Practices for Mobility Device Securement – This Best Practice was presented in draft to the Executive Committee in May. Based on their feedback, staff are reviewing the draft Best Practice again. Unfortunately, between the full Executive Committee agenda and staff absence, this Best Practice was not ready to be finalized this month. The final version of the Best Practice will be presented to the Executive Committee in July. To see the draft that was presented to the Executive Committee, please see the Executive Committee packet for May. In related news, staff have met with Linda Callecod-Russell regarding the development of a mobility device securement training program for supervisors. We have reached an agreement on that work with Linda and she is starting her research in July by visiting several transit agencies, talking with trainers, and riding buses. This training program was anticipated in the Best Practice for Mobility Device Securement as a necessary resource for member transit agencies. SAFETY STAR AWARDS We are pleased to announce the first Safety Star Awards to the following agencies: Large – Ben Franklin Transit Medium – Whatcom Transportation Authority Small – Jefferson Transit Each agency will receive a Safety Award that can only be used in providing employee recognition for the superior work they do. Ben Franklin will receive $5,000, Whatcom Transportation Authority will receive $3,500, and Jefferson Transit will receive $1,500. The Safety Star Award is determined utilizing the Exposure to Losses Table in the back of the Risk Profile. The Risk Profiles use five-years of data starting with 2009 and going through 2013. On the Exposure to Losses tablet, each agency’s actual miles (exposure) is compared to their percentage of liability contribution and then to the percentage of auto liability losses. The member with the lowest (negative) percent in each group is the Safety Star winner … as long as that member is not on the Member Improvement List. The Member Improvement List is set by using the annual actuarial underwriting report (that is one that shows how much each member pays) and uses 10 years of data. The 2015 Member Improvement List includes: Columbia, C-Tran, Kitsap, Link, Spokane, Twin and Valley. CLAIMS WSTIP currently has 289 open files with total reserves of $9,652,185. Most claim files are from the last three to four years. 2011 is the most significant loss year in the last several years. There has been a lot of adverse loss development in 2011. We have two significant claims pending from 2011. Another significant claim is Laughner vs. Spokane Transit. Defense Counsel is scheduled to brief the Executive Committee on this case at the June meeting in Spokane. Mediation is scheduled for August 13th in Spokane. The other large 2011 case is Clithero vs. Dart. Dart is a subcontractor of Community Transit. In 2011 WSTIP was the primary liability insurer for Dart. Mr. Clithero has cerebral palsy. A Dart vehicle struck Mr. Clithero on his scooter in a crosswalk. Mediation is planned for November or December 2015. WSTIP has a significant claim in 2012 and two significant claims in 2014. Nothing new on these 3 events to report.

Page 4 of 6

In an unexpected and shocking development on the March 2008 Jefferson Transit case where a Jefferson Transit vehicle bumped a plumbing truck, we had a very adverse judgment for $1.2 million after a recent jury trial. We are looking at all options for appeal right now. The WSTIP Claims Coordinator conference was held June 1st and 2nd this year at the Salish Lodge. It went very well. As a follow up to the February 2015 discussion at the EC about member shop rates for the repair of various type of vehicles, staff has done a survey of private body shop rates around the state. The supporting documentation is outlined below. Staff recommends the following: Cars/Trucks/Vans: $60- an hour (we push the limit here for our members) Large Trucks/15 Pass. Vans: $70- an hour (large trucks are E350 Diesels and Flat beds for towing) Paratransit Vehicles: $80- an hour 40'/50'/Articulated Buses: $110- an hour We add in Loss of Use at six hours a day for $75-; $100-; and, $150- an hour and we can make up some of the direct costs for transit staff. INFORMATION TECHNOLOGY Staff continues to work on the Origami implementation to replace Riskmaster. In early June staff traveled to C-Tran and Community Transit to discuss their particular needs for the Origami implementation. Staff is also very active in the collision avoidance pilot project. Staff submitted a $100K grant application to TRB for this upcoming pilot. Staff also has been to Pierce Transit and Community Transit to discuss the project. Staff plans to visit Intercity Transit, C-Tran and Spokane Transit in June to discuss the upcoming pilot as well. UNDERWRITING AND FINANCE WSTIP staff is actively working on the upcoming property excess insurance renewals which are July 1. Staff received a favorable quote for the excess auto physical damage coverage and a flat quote for the excess property coverage. Brian White from Alliant will be reporting on this. Staff recently submitted the 2014 year end financials and the 2014 annual report to the State Risk Manager. One of the Pool’s preliminary investment vehicles is the Thurston County Investment Pool. Staff is pleased to provide a one page summary of County investments below.

Page 5 of 6

MEMORANDUM

To: Board of Directors, Washington State Transit Insurance Pool From: Ronald A. Franz, General Counsel Subject: Activity Report Date: June 17, 2015 This memorandum lists some of the things I have worked on since my last activity report provided to you at the March quarterly meeting.

1. Review Pool layer property coverage documents—1 hour. 2. Review and revise Budget Development Policy—1 hour. 3. Review Investment Policy—1 hour. 4. Review materials and attend Governance Policy Committee meeting--1 hour. 5. Attend senior staff meetings (nine)—9 hours. 6. Review and revise bylaws re vacancies—6 hours. 7. Attend May Executive Committee meeting—5 hours. 8. Attend April Executive Committee meeting—5 hours. 9. Attend March Board meeting and work session (including travel)—10 hours. 10. Legal research on electronic signatures—4 hours. 11. Legal research and two coverage opinions regarding C-Tran open public meetings act litigation—

6 hours. 12. Review Alliant Property Insurance Program documents—30 hours. 13. Legal research regarding WATV legislation, Forks proposed ordinance, telephone conference

with W. Clark-Getzin—3 hours. 14. Opalink v. Kitsap Transit: legal research re insurer defense and settlement responsibility, review

documents, telephone conference with outside counsel—4 hours. 15. Legal research, collaborate with J. Spears, Pool contractors, and others regarding representation

in Cullier v. BFT depositions—3 hours. 16. Preparation of opinion regarding UIM coverage—1.5 hours. 17. Preparation of memorandum regarding Interlocal Agreement and survival of coverage following

termination—2 hours. 18. Legal research and draft Pool-layer cyber liability coverage—2 hours. 19. Collaborate with J. Spears on third party additional insureds—2 hours. 20. Preparation of general counsel information packet—2 hours. 21. Review Spokane Transit/Spokane Valley parking contract—2 hours. 22. Preparation of revisions to Duties of Elected EC Representatives and Ethics Policies—2 hours. 23. Preparation of memorandum of coverage for non-monetary claims—3 hours. 24. Collaborate with J. Spears on Yakima Transit UIM claim and coverage—2 hours. 25. Collaborate with J. Spears on Twin Transit lease with city—2 hours.

That’s it. Feel free to ask questions.

PUBLIC ENTITY GROUP

Alliant Insurance Services, Inc. 1301 Dove Street Suite 200 Newport Beach, CA 92660 PHONE (800) 821-9283 www.alliantinsurance.com License No. 0C36861

BROKER REPORT

FOR:

WASHINGTON STATE TRANSIT

INSURANCE POOL (WSTIP)

PRESENTED BY:

ALLIANT INSURANCE SERVICES Newport Beach, CA

Lilian Vanvieldt, Senior Vice President

Brian A. White, Vice President

June 2015

Alliant Insurance Services, Inc. Market Conditions Report – June, 2015

This market conditions report is based on the insurance industry financial results for the year ended 2014, released by the Insurance Information Institute on May 26, 2015.

• In 2014, the industry’s overall profit for the year tallied $55.5 billion. This represents a decline in net income of 12% from the preceding 12 months. However, for perspective 2013 was an unusually strong year relative to historical performance and based on that, 2014 year end results are actually quite good.

• At the end of 2014, overall industry policy holder surplus (what in other industries would

be called “net worth”) increased yet again to a new record of $674.7 billion; this up $21.3 billion, or 3.2% from $653.4 billion as of year-end 2013.

• Top line growth, (“net written premium”) was up 4.1% in 2014, slightly below the 4.4%

gain in 2013, but continuing a repeat of now 3 consecutive years of top line growth of 4% or higher.

• Claims related expenses have increased at a slightly faster pace than premium growth, so the industry’s combined ratio rose slightly to 97 from 2013’s 96.2

2014 resulted in the second highest level of annual profit in the post-crisis era (only 2013 has been better). This was helped by low catastrophe losses, some modest premium growth, and continued realized investment gains, and favorable development of prior-year claims reserves. At its core the P&C insurance industry remains very strong financially, with capital adequacy ratios remaining high relative to long-term historical averages. At Alliant, in negotiations with underwriters, we are seeing stable to softening market conditions on property related placements. However, properties prone to Earthquake exposure such as those located in the Pacific Northwest, and those subject to Flood Zone A & V exposures are carefully rated according to their perceived exposure to those perils as capacity for this catastrophic cover is limited relative to “all risk” perils. Insureds experiencing relatively high loss activity are facing rate increases. The transit liability insurance marketplace has seen mixed conditions in the recent past, as historically key markets have left this segment of business. Good risks with higher attachment points are faring better than those with lower attachment points and mixed loss history. Finally, some segments of the excess workers’ compensation market are finally showing signs of stabilization and even softening. However, insureds with excess workers’ compensation placements with premium of under $100,000, or those with loss activity approaching or exceeding the self-insured retention, should prepare for continued hardening conditions. A detailed industry income statement the year ended December 31, 2014 is included on the following page.

FULL-YEAR 2014 FINANCIAL RESULTS*

($ billions)

$ Billions Percent change from 2013

Net Earned Premiums $487.6 4.3%

Incurred Losses (Including loss adjustment expenses)

334.7 6.6%

Expenses 138.1 2.6%

Policyholder Dividends 2.5 0.0%

Net Underwriting Gain (Loss) 12.3 -19.4%

Investment Income 46.2 -2.5%

Other Items -2.8 -286.7%

Pre-Tax Operating Income 55.6 -15.2%

Realized Capital Gains (Losses) 10.1 -11.5%

Pre-Tax Income 65.7 -12.0%

Taxes 10.2 -15.0%

Net After-Tax Income $55.5 -12.5%

Surplus (End of Period) $674.7 3.3%

Combined Ratio 97.0** -0.8%

*As released by the Insurance Information Institute on May 26, 2015

WSTIP Pool Insurance/Reinsurance Policies

Insured Policy Dates

Line of Coverage Carrier Policy Number Limits WSTIP Deductible/ Retention

Premium

Ben Franklin Tran Link Transit

Clallam Transit Clark County PTBA (C-

TRAN) Columbia County

Public Transpiration Grant Transit Authority

Grays Harbor Transpiration Auth.

Intercity Transit Island Transit

Jefferson Transit Authority

Kitsap Transit Twin Transit

Mason Co Transportation

Authority Pacific Transit System

Pierce Transit Skagit Transit

Community Transit Spokane Transit

Valley Transit WSTIP Office

Whatcom Transportation

Authority Whatcom

Transportation Authority Employee Benefit Plan Board

1/1/15-1/1/16

Commercial Crime Insurance - Including

Employee Theft, Forgery or Alteration, Theft of Money and Securities,

Robbery or Safe Burglary Inside the Premises ,

Theft Out of the Premises, Computer

Fraud, Funds Transfer Fraud and Money Orders and Counterfeit Money

National Union Fire Ins. Co. of Pittsburgh,

PA

019331052

$1,000,000

$10,000

$17,405




Premium

Asotin County PTBA Ben Franklin Tran

Link Transit Clallam Transit

Clark County PTBA (C-TRAN)

Columbia County Public Transportation

Everett Transit Grant Transit Authority

Grays Harbor Transportation Auth.



Kitsap Transit Twin Transit

Mason Co Transportation

1/1/15-1/1/16

Liability Reinsurance of WSTIP Liability & Public

Officials Liability Coverage Documents Including

General Liability, Automobile Liability, Public Officials E&O Liability and

Employment Practices Liability

Government Entities

Mutual, Inc.

GEM0006A15001 BG0005-0001

$3,000,000 Excess

WSTIP SIR of $2,000,000

Total $5,000,000

$2,000,000

$621,404

1/1/15-1/1/16





Munich

159007-3062582-2015

$10,000,000 excess of WSTIP

SIR & GEM Layers - Total $15,000,000

$5,000,000

$369,466




Premium

Authority Pacific Transit System

Pierce Transit Pullman Transit

Rivercities Transit Skagit Transit


Valley Transit WSTIP Office

Whatcom Transportation

Authority City of Yakima Transit

Division

1/1/15 – 1/1/16





Arch Insurance Company

UXP0057923-00 $5,000,000 excess of WSTIP

SIR, GEM & Munich Layers

Total $20,000,000

$15,000,000 $136,000

Ben Franklin Transit Link Transit

Clallam Transit Grant Transit

Authority Grays Harbor Transit


Jefferson Transit Kitsap Transit Twin Transit Mason Co

Transportation Authority

Pacific Transit Skagit Transit


4/4/15 - 4/4/18

Pollution Liability Insurance

Indian Harbor Ins. Co.

PEC003726901

$5,000,000 Each Pollution

Condition $5,000,000

Pool Aggregate

$100,000 Each

Pollution Condition

$127,463 Three Year Premium




Premium

Valley Transit Whatcom Transit

Clallam Transit

System Community Transit

Grays Harbor Intercity Transit Jefferson Transit

Kitsap Transit Chelan/Douglas

Public Transportation Pacific Transit Valley Transit

Pullman Transit

9/25/14-9/25/15

Pollution Liability Insurance

for Underground Storage Tanks

Liberty Surplus

Insurance Corporation

TXESF103563113

$1,000,000 Per Each Pollution

Incident $3,000,000 Aggregate

Limit $250,000 Aggregate

Claims Expense Limit

$25,000

$66,290

Asotin County PTBA Ben Franklin Transit


Clark Co PTBA (C-TRAN)

Columbia Co Public Transportation

Cowlitz Transportation Auth (RiverCities Transit)

Grant Transit Authority

Grays Harbor Transit Intercity Transit Island Transit

Jefferson Transit Kitsap Transit

7/1/14 - 7/1/15

Commercial Property and Boiler & Machinery

Insurance - On Premises Vehicles Included, Off

Premises Coverage, Not Included

Various Carriers

017471589/01 (Dec 11)

$1,000,000,000 All Risk

$100,000,000 Boiler &

Machinery $50,000,000 Flood (Pool Aggregate) $10,000,000

Flood Zones A & V (Pool Aggregate Included in Flood Limit) $25,000,000 Earthquake

(Pool Aggregate)

$500,000

$571,189.83




Premium

Twin Transit Mason Co


Pacific Transit Pierce Transit Skagit Transit

Community Transit Spokane Transit Valley Transit

WSTIP Whatcom Transit

$500,000 Unscheduled

Business Interruption $50,000,000

Extra Expense




Premium










Pacific Transit Pierce Transit Skagit Transit



7/1/14 - 7/1/15

Vehicle Physical Damage – private passenger

automobiles, commercial automobiles, (including

hired automobiles, trucks, trailers, or semi trailers) and any other

licensed vehicles designated for travel on public roads owned or

operated by the Named Insured.

Alterra Excess & Surplus Insurance Company

MAX4IM0047212

Each Occurrence

Limit $20,000,000 Not to exceed maximum on

any one vehicle:

$1,000,000 Newly Aquired Vehicles limit per vehicle: $750,000

$250,000 with an Annual

Adjustment Rate of 50%

of the Annual Policy

Rate of $.0287 per

$100 of values

reported

$178,535




Premium










Pacific Transit Skagit Transit



Pierce Transit

7/1/14 - 7/1/15

Commercial Cyber Liability Insurance Including

Information Security & Privacy Liability, Privacy Notification/Monitoring

Costs, Regulatory Defense & Penalties, Website & Media Content Liability,

First party Data Protection& Business

Interruption Loss

Beazley Group

017471589 (Dec 11)

$2,000,000 Pool Aggregate

$500,000 Privacy

Notification/ Monitoring

Costs (Pool Agg)

$100,000

Included in Property Premium

Washington State Transit Insurance Pool (WSTIP)LIST OF STAND ALONE INSURANCE POLICIES/COVERAGES WITH ALLIANT INSURANCE SERVICES, INC.

Broker/Account Status as of June 2015

Member Name Type of Coverages/Policy No. Carrier/Underwriter Contact , Address Effective Date Policy

(ies)/Binder

Community Transit

Excess Workers Compensation

Policy No. SP 4047080

Safety National Casualty Corporation 21832 SchuetzSt. Louis, MO 63146-3540Ph: 314-995-5300Fax: 314-995-3843

October 1, 2014 to October 1, 2015 Policy delivered to client.

Pierce Transit

Excess Workers Compensation

Policy No. SP 4052751

Safety National Casualty Corporation 21832 SchuetzSt. Louis, MO 63146-3540Ph: 314-995-5300Fax: 314-995-3843

April 1, 2015 to April 1, 2016 Policy delivered to client.

Marine Transportation of Kitsap

Directors & Officers Liability

Policy No. PHSD947352

Philadelphia Indemnity Insurance CompanyOne Bala Plaza, Suite 100, Bala Cynwyd, Pennsylvania 19004818-772-1774Fax 818-772-2796

July 1, 2014 to July 1, 2015 Policy delivered to client.

Everett Transit

Cyber Liability

Policy No. USCSs262770314

Hiscox-AmWins Brokerage601 S. Figueroa Street, Suite 4350Los Angeles, CA 90017213-254-2220

August 17, 2014 to August 17, 2015 Policy delivered to client.

Clark County Transportation

Business Travel Accident

Policy No. 9907-13-33

Chubb Accident and Health275 Battery St., Suite 12000San Francisco, CA 94111415-273-6432

February 16, 2015 to February 12, 2016 Policy delivered to client.

Community Transit

Misc. Bond

Notary BondPamela MuellenbachBond No. 15125643N

CNA SURETY101 So. Phillips AvenueSioux Falls, S.D.Attn: Marlys D. Kuil800-331-6053605-335-0357 (Fax)

June 9, 2012 to June 9, 2016 In Force

Washington State Transit Insurance Pool (WSTIP)LIST OF STAND ALONE INSURANCE POLICIES/COVERAGES WITH ALLIANT INSURANCE SERVICES, INC.

Broker/Account Status as of June 2015

Member Name Type of Coverages/Policy No. Carrier/Underwriter Contact , Address Effective Date Policy

(ies)/Binder

WSTIP

Misc. Bond

Notary BondJoanne M. Jerabek-KerriganBond No. 15117688N


March 18, 2012 to March 18, 2016 In Force

Snohomish

Misc. Bond

Notary BondVirginia Ponce de LeonBond No. 16116881N and 16116881N01


May 12, 2014 to May 12, 2018 In Force

WSTIP

Misc. Bond

Notary BondJanet E WatsonBond No. 24795682N


July 13, 2014 to July 13, 2018 In Force

Minutes of the WSTIP Board Meeting

March 27, 2015 Semiahmoo Resort ~Blaine

Board Members Present

Amy Asher, RiverCities Transit Lynn Bourton, Link Transit Gloria Boyce, Ben Franklin Transit Mike Burress, Community Transit Wendy Clark-Getzin, Clallam Transit (Medium Member Rep) Nick Covey, Link Transit (President) Sara Crouch, Jefferson Transit (Small Member Rep) Rich Evans, Pacific Transit Ben Foreman, Intercity Transit Kevin Futrell, Yakima Transit Stephanie Guettinger, Columbia County Public Transportation Emmett Heath, Community Transit (Vice President) Tom Hingson, Everett Transit (At-Large Member Rep) Rob Huyck, Pierce Transit Staci Jordan, Island Transit Rob LaFontaine, Twin Transit Ed McCaw, Valley Transit Ken Mehin, Grays Harbor Transit (Past-President) Bill Mulholland, Pullman Transit

Mary Ann Norquist, Mason Transit Diane O’Regan, C-Tran (Large Member Rep) Paul Shinners, Kitsap Transit (Secretary) Shonda Shipman, Whatcom Transportation Authority Pete Stark, Whatcom Transportation Authority Lynda Warren, Spokane Transit Greg Wright, Grant Transit. WSTIP Staff & Guests Present Anna Broadhead, Member Services Assistant Tracey Christianson, Member Services Manager Denise Ellison, Claims Specialist Marisa Espinoza, Finance Specialist Ron Franz, General Counsel Al Hatten, Executive Director Erin Knudson, Whatcom Transportation Authority Andrea Powell, Information Services Specialist Jerry Spears, Deputy Director Brian White, Alliant Insurance Services

Call to Order President Covey called the March 27, Board Meeting to order at 9:05 am. Mulholland moved to accept the agenda. Warren seconded the motion and it passed. A sign in sheet was passed around the room and guests were introduced. Covey presented a plaque to Mehin for his service to the Board as President. Mehin said last year was challenging but due to the trust and support you had in me last year I am now happier and stronger. Covey said there is one other presentation. He announced that Bill Mulholland who has been on the Board for five years, will be retiring and moving onto greener pastures in Spokane. Hatten presented Mulholland with a small remembrance of the Pool: a Waterford crystal peanut bowl. Mulholland said it had been an extreme honor to serve on the Board and thanked everyone. He felt the Pool has a great diverse Board offering the highest protection at the lowest cost. Discussion Items Member Representative Meeting Report and Discussion Crouch said the small members had the start, stop, continue discussion. The results were we love having our member representative meetings and want to continue having them on both Thursday and Friday mornings, it allows us time to network, share and vent problems we are having and find out that maybe others are going through the same issues. We like the 8 am meeting time as it gives us time to move into topics that will be discussed at the meeting. On our start side the 101 was a great idea and we talked

about the excess and reinsurance topics. O’Regan said the medium members also really enjoy the member representative meetings and we want to continue having them, the 101 topic was excellent and took us down a path we didn’t expect, we want to add to the list the Public Officials Liability policies, and continue the actuarial education. We liked having the topics we were going to be taken action on presented and discussed during the work session. Clark-Getzin said her group took advantage of having two meetings, we had new attendees and integrated a bit of Board orientation as part of the start, stop, continue. We tapped into reinsurance, we enjoyed White’s 201 presentation. Change is bringing a lot of intrusion or inclusion of unions, drug use is pervasive, and we have Board members who need orientation pronto, which we’ve invited them to attend the Executive Committee meetings even if they can’t physically attend to at least phone in as it’s the best way to learn. Emerging Risks and Opportunities Committee: Call for Volunteers Wright said the Emerging Risks and Opportunities committee is soliciting volunteers to serve, he read the committee charter, and said members of the committee were Aldridge (no longer on the Board), Foreman, McCaw, Jordan, Wright, Spears, and Christianson. Mehin said he was interested in serving. Wright said in Ocean Shores the small, medium, and large member representatives met with their groups and compiled a list of what we felt the top three risks were: They were mobility devices, collision avoidance and driver fitness for duty. If you are interested in serving on this committee please let Wright, Christianson, or Spears know we will be having a conference call within the next couple of weeks. Jordan, Huyck, LaFontaine, Burress, Mehin said they were interested in serving. Foreman said he would step off the committee. Wright encouraged Foreman to remain so they could have two or three people work on each issue. Committee members are Wright, Jordan, McCaw, Foreman, Huyck, LaFontaine, Mehin and Burress. Jeffrey S. Ristau Scholarship: Update Hatten said we will be working on additional details of the scholarship awards after the Executive Committee meeting yesterday. We have made eight awards to Grays Harbor, Kitsap, Ben Franklin, Pierce, Community, Clallam, Whatcom and Link. Of the $20,000 available $7,230 has been expended. He shared a letter from Dan Sandmier from Ben Franklin Transit thanking the Board for the scholarship. There will be further discussion regarding disbursements of the scholarship funds at the next Executive Committee meeting. Covey congratulated all recipients. Board Guest Program: Change in Procedure Christianson gave a brief history of the Board Guest Program, we are making a change to the program to allow members to choose when to bring a guest to the Board meeting rather than staff directing you when you can bring a guest. We will still only pay for your guest at one meeting per year, we encourage you to bring your alternate or someone else you feel would benefit from coming, we aren’t going to assign a quarter but if we have some resource difficulties we will let you know. We did send this information out by email, but wanted to make sure you were aware. Shipman asked if they can bring someone more than once a year at our own expense. Christianson said certainly. Financial Reports February 2015 Treasurer’s Report, Income and Expense Statement, Balance Sheet, RiskMaster Report, and Comparative Income and Expense, and Balance Sheets Spears asked for questions regarding the financial statements stating that we have received the year-end actuarial study, and everyone has paid their 2015 contributions except Island as planned. Island will be paying later in the year. Spears will update the financials to reflect RiverCities instead of CUBS. Heath asked Foreman what the difference between Thurston County Investment Pool (TCIP) and Local

Government Investment Pool (LGIP) rates of return are. Foreman said TCIP has longer time horizons, most of the Pool money is at TCIP because it’s marginally better than zero. Staff Reports Executive Staff Report Hatten said Pierce Transit had returned their Interlocal Agreement for claims which the Board had approved in December. He reported that we had received critical mass for the Interlocal Agreement and Mutual Aid agreements all but four members have returned their Interlocal Agreements (Ben Franklin, Pierce, Pullman, and Spokane). Spokane and Pullman’s general counsel has requested some additional language stating that if you leave the Pool for whatever reason you don’t lose coverage you’ve already purchased, not that you get a free ride for future years, but that we don’t take away coverage. Hatten said we aren’t inclined to issue a letter to a single member so it will go to each member. The argument is that the Interlocal Agreement isn’t an insurance policy it is a separate document, it’s a contract binding agreement that you are willing to bring your forces together to buy the insurance products. Hatten and Franz fielded “what if” questions from the Board. Staff is actively working with Pierce and Ben Franklin to get the Interlocal Agreement on their Board agendas. Hatten talked about the Governmental Entities Mutual (GEM) events and out of state training opportunities for the Board. Christianson said loss prevention staff have been out in the field a lot already, we are ready to start second rounds of visits. She explained DeVoll was teaching a class for the Transportation Safety Institute (TSI) in Florida. At the next quarterly meeting you will be receiving your Risk Profiles and Annual Report. She hopes all Board members have registered for the “Protecting Your Organization From Computer Crime” which is a joint training effort with several other pools in the state (Washington Counties Risk Pool, Washington Cities Insurance Authority, Enduris, and WSTIP). The Best Practices for the Technology Environment RFP is out on the street, we are working on the Best Practices for Mobility Device Securement, the vanpool online driver refresher training is live and vanpool coordinators are putting drivers into the system. If we don’t have your coordinators utilizing the system we will request that you put some pressure on them as part of voluntary compliance with the Best Practices for Vanpool Operations. Lastly, the Guest Rider program is up and running and rides are taking place. Spears said he had three quick things to talk about and asked Ellison to talk about the 18th Annual Claims Coordinators Conference. Ellison said the 18th Annual Claims Coordinators conference will take place on June 1-2 at the Salish Lodge. She said she has a great lineup of speakers concentrating on torts and speakers focusing on why the Pool needs the information and how we use the information to help you. She encouraged claims coordinators and their backups to attend. Spears said RiskMaster will be operational until year end most likely but Powell will begin collecting vehicle information for the renewal. He also said we will be collecting data for the target fund study or capital solvency project. PriceWaterhouse Coopers produces a large document that looks at all the risks in the entire pool, they are beginning work and will present in June. Hatten said as part of the governance policy we do this study every three years. If you have questions regarding the Executive Staff Report contact Hatten, Christianson, or Spears. General Counsel’s Report Franz asked for questions regarding his recent activities. Foreman asked Franz to elaborate on item 14 in his report. Franz explained a computer issue but that it had been resolved. Heath asked Spears about the staff labor rates for in house reports. Spears said it’s a work in progress and he will bring it forward to the Executive Committee.

The Board took a short break at 10:10 am and resumed their meeting at 10:30 am. Broker’s Report White gave an update on the status of the insurance market stating that the market is fascinating because in some ways it’s the softest he’s seen since 9-11(buyer’s market) and in some ways the hardest if not harder he’s seen since 9-11. In certain areas of Washington, the tort environment is just as challenging as in California. Capitalization in the market place is at record levels, carriers are looking for opportunities to use the capital as they aren’t getting much in the investment markets. As we look forward to the July 1 renewal we are cautiously optimistic on a possible reduction on the all risk property side including flat to stable on the Auto Physical Damage (APD) side. Covey thanked White for the information. Action Items Minutes – September 26, 2014 Hingson moved to approve the minutes from September 26, 2014. Mulholland seconded the motion and the motion passed. Minutes – December 5, 2014 McCaw moved to approve the minutes from December 5, 2014. Mulholland seconded the motion and the motion passed. Pollution Liability Coverage Policy Hatten asked White to present the proposed Pollution Liability Coverage policy. White said the proposal is for coverage April 4, 2015 to April 4, 2018 at a cost of 130,139.72 prorated out over a three year period, coverage is included for 19 members that have elected coverage. Covey said he learned during the presentation the prior day that all locations need to be listed for coverage. White said correct it isn’t like your schedule of values, though park and rides and address we need to have those locations because it’s not like General Liability policy. Covey asked for a due date for the list of locations. White said we have collected them and if for some reason all your locations aren’t included it will be an additional $1,500 for each additional property prorated over the three year period. Hatten said coverage is the responsibilities of the Board and this is being brought forward for acceptance and approval. Shinners moved to approve the pollution liability coverage policy for 2015-2018. Foreman seconded the motion and it passed. Member Updates Each member present gave an update of the happenings at their respective agencies topics ranged from sales tax increase/decreases, labor negotiations, and ridership. Adjournment Covey adjourned the meeting at 11:25 am. Submitted this _26th _ day of June 2015 Approved: ____________________________ Paul Shinners, Secretary

MEMORAMDUM

To: Board of Directors From: Ronald A. Franz, general counsel Subject: Proposed bylaws amendment Date: June 18, 2015 This memorandum explains the proposed changes to the bylaws. In a nutshell, the amendments are an adjustment in the way the Pool addresses vacancies in its officer positions and the elected executive committee positions. Presently vacancies in the Executive Committee are filled by the Board. For officer vacancies, the president may appoint a member of the Executive Committee to fill the vacancy on an interim basis until the Board acts to fill the vacancy. If these proposed amendments are passed:

1. An officer vacancy is filled by the immediate past president until the Board fills the vacancy at the next annual meeting.

2. As a backup course of action if the immediate past president has already been appointed to fill a vacancy or if he/she declines the position, the Board fills the vacancy as soon as it can.

3. Vacancies on the Executive Committee are to be filled by the Board. 4. Vacancies in the small/medium/large Executive Committee positions must be filled by

someone from the appropriate size member. 5. A vacancy in the immediate past president Executive Committee position is not filled.

WSTIP Policy Manual Document Name: Bylaws Date Adopted: 10/01/08

Category: Organizational Planning Revision Date: 5-29-1508/11/11

Page: 1 of 9


Bylaws

ARTICLE I: DEFINITIONS Section 1. Definitions. The terms set forth below are defined as follows:

a. Board -- The governing body of the Pool is composed of one representative from each Member.

b. Executive Committee – The committee which governs and controls the Pool except as set forth in Section 4.

c. Member -- A local governmental public transit entity which participates in the Pool’s self-funded insurance program.

d. Pool -- The Washington State Transit Insurance Pool. Defined terms are in bold throughout these bylaws.

ARTICLE II: OFFICES Section 2. Principal office. The principal office of the Pool shall be located in Olympia, Washington. Section 3. Other offices. The Executive Committee may, in its discretion, establish other offices for the Pool. ARTICLE III: GOVERNING BOARD Section 4. Governance. With respect to the following, the Pool shall be governed and controlled by the Board: a. Adoption and amendment of bylaws; b. Adoption of annual budget;

Page 1 of 9

c. Assessment of annual and special Member allocations and contributions; d. Admission and termination of Members; e. Selection of executive director and terms and conditions of employment; f. Purchase, lease, sale, and disposal of real property; g. Changes to the terms and conditions of coverages to be offered by the Pool to its Members; and h. New coverages or programs to be offered by the Pool to its Members; Provided, at least ninety days prior to voting upon whether or not to offer any new coverage or program, the Pool shall provide notice thereof to the governing bodies of the Members, which notice shall include a description of the proposed new coverage or program; and i. The definition and parameters of the Governance Documentation Procedure and WSTIP Policy Manual as set forth in Article XIII. Section 5. Composition. The Board shall be composed of one representative appointed by each Member. Section 6. Voting Rights. Each Member shall have one vote on each matter submitted to the Board. Unless a supermajority vote is required on some particular matter, a majority vote is sufficient to pass a matter. Voting by proxy is not permitted. Section 7. Quorum. A majority of Members representatives is sufficient to constitute a quorum. Section 8. Member representatives.

a. Each Member shall appoint a primary representative, and one or more alternative representatives. A Member’s representative is, authorized to exercise the Member's voting rights in the Pool and to act on behalf of the Member with respect to all matters pertaining to the Pool.

b. If a primary representative is unable to serve or participate in proceedings for any reason an

alternative representative shall represent the Member.

c. Members shall designate representatives in writing and may change designations at any time,. Members shall promptly notify the Pool of any changes.

d. Representatives must be officers or employees of Member. e. Alternative representatives may serve on committees or as officers only if appointed or

elected to the committee or office.

Page 2 of 9

Section 9. Board meetings. a. The annual meeting shall be held in November or December; Provided, if extraordinary circumstances require the cancellation of the annual meeting, the president may reschedule the annual meeting for some other time as a special meeting. The Board shall elect the secretary and new members of the Executive Committee and adopt its annual budget and Member allocations at the annual meeting. b. In addition to the annual meeting, the Board shall meet quarterly. The annual meeting shall be the meeting for the fourth quarter. Section 10. Membership not transferable. Membership in the Pool is not transferable or assignable. ARTICLE IV: OFFICERS Section 11. Designation. The officers of the Pool shall consist of a president, vice-president, and secretary. All officers shall be primary or alternative Member representatives. Section 12. President. The president shall chair the Board and the Executive Committee. Section 13. Vice-president. The vice-president shall perform the duties of the president in the temporary absence or disability of the president. Section 14. Secretary. The secretary shall certify Pool policy manual documentsdecisions as described in Article XIII, and minutes of the Board and Executive Committee. Section 15. Election and Progression of Officers.

a. The Board shall elect a secretary and fill vacancies in offices that had become vacant since

the last electionevery year at its annual meeting.

b. The secretary shall progress to vice-president and the vice-president shall progress to president.

b. Section 16. Vacancies in offices.

a. Vacancy in the office of the president, vice president, or secretary shall be filled by the immediate past president until the annual election.

b. If the immediate past president has already been appointed to fill a vacancy or if he or she

declines to fill a vacancy, the Board shall fill the vacancy at a regular or special meeting as soon as practicable.

Section 16. Section 17. Terms. The terms of office shall be one year and shall commence immediately following election of the secretary. y.

Page 3 of 9

ARTICLE V: EXECUTIVE COMMITTEE Section 187. Powers. The Pool shall be governed and controlled by the Executive Committee in all respects except for those matters reserved to the Board by Article III, Section 4. The Executive Committee shall make recommendations to the Board with respect to the annual budget, assessment of Member allocations and contributions, the purchase, lease, sale, and disposal of real property, and all other matters that may come before the Board . Section 198. Composition.

a. The Executive Committee shall consist of the president, immediate past president, vice-president, secretary, and four additional members elected by the Board at every annual meeting.

b. All members of the Executive Committee shall be primary or alternative Member

representatives. c. Of the four members elected annually, one shall be from a small transit system, one shall be

from a medium transit system, and one shall be from a large transit system, and one shall be “at large”; Provided, if no eligible member from a small, medium, or large system is willing to serve, that position shall be open to any other Member representative . The criteria for small, medium, and large shall be established by the Executive Committee.

Section 2019. Meetings. The Executive Committee shall meet every month. The president may cancel any monthly meeting. A majority of members of the Executive Committee shall be sufficient to constitute a quorum. Section 210. Claims Review. The Executive Committee shall review and, if appropriate, approve proposed settlements for any claim or lawsuit against any Member which is proposed for settlement in an amount greater than the standing settlement authority of the executive director. Section 221. Committees. The Executive Committee may, in its discretion, establish committees, either ad hoc or standing.

ARTICLE VI: VACANCIES, REMOVALS, AND RESIGNATIONS Section 232. Vacancies.

a. Vacancies in the Executive Committee shall be filled by the Board at aits next regular meeting as soon as practicable. The person appointed to fill the vacancy shall complete the term of his or her predecessor.

b. Vacancies in Member representative positions shall be filled only by a Member representative from a Member that meets the size criterial for the vacant position.The president may appoint a member of the Executive Committee as an interim officer prior to action by the Board to fill the vacancy.

a.c. A vacancy in the immediate past president position shall not be filled.

Page 4 of 9

b.d. If an Executive Committee member ceases to be an officer or employee of Member, the position shall be considered vacant.

Section 243. Removal. An Executive Committee member may be removed by a two-thirds vote of all Member representatives. Section 254. Resignation. An Executive Committee member may resign by providing written notice to the Board or president. Such resignation shall be effective upon receipt or at some other specified time. A resignation shall be effective without acceptance.

ARTICLE VII: MEETINGS

Section 265. Meeting time, date and place. The president shall establish the time, date and place of the Board's annual meeting and for regular and special meetings of the Board and Executive Committee. Section 276. Notice of meetings. a. Notice of all meetings shall be provided to all Member representatives. b. The notice shall specify the time, date, and place of each meeting and, in the case of a special meeting, the matters or topics which will be presented for consideration. Section 287. Executive sessions. The Board, Executive Committee, and any other duly established committee may adjourn to executive session to consider those matters authorized by RCW 42.30.110 and RCW 48.62.101.. Section 298. Special meetings. Special meetings of the Board or Executive Committee may be called as authorized by RCW 42.30.080. Section 3029. Conduct of meetings. Meetings shall be conducted pursuant to Robert's Rules of Order to the extent not inconsistent with statutes, these bylaws, or the interlocal agreement through which the Pool was established. ARTICLE VIII. APPOINTED POSITIONS Section 310. Treasurer.

a. The Board shall appoint a Treasurer pursuant to RCW 48.62.111 as now or hereafter amended. The Board may replace the Treasurer at any time.

b. The duties of the Treasurer shall be as specified by the Executive Committee. The

Treasurer must be a primary or alternative Member representative. If the Treasurer is not a member of the Executive Committee, he or she shall be an ex officio, non-voting member thereof.

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Section 321. Auditor. The Pool’s executive director shall serve as its Auditor. The duties of the Auditor shall be as specified by the Executive Committee. Section 332. Other positions. The Executive Committee may appoint such other positions as it deems appropriate and, if it does so, shall specify the duties of the position.

ARTICLE IX: EMPLOYEES Section 343. Executive Director. a. The Board shall engage an executive director upon mutually agreeable terms and conditions. The Executive Committee shall evaluate the performance of the executive director following input from the Board which may be through the small, medium,and large Executive Committee members. b. The executive director shall be the chief executive officer of the Pool and shall be responsible for its efficient operation and overall direction. c. The executive director shall execute the directives of the Board and the Executive Committee. Section 354. General Counsel. The Executive Committee may engage general counsel for the Pool upon terms and conditions it deems appropriate. The general counsel shall be the legal advisor to the Board, Executive Committee, and Pool staff. Section 365. Other Employees. The executive director shall employ such other individuals as may be authorized by the Executive Committee and consistent with the annual budget. ARTICLE X: OPERATIONS Section 376. Accounts. The Pool shall establish and maintain funds and accounts consistent with generally accepted accounting practices and as may be required by state laws and regulations. Section 387. Internal Controls.

a. The books and records of the Pool shall be audited annually. b. The Executive Committee shall establish policies with respect to internal controls, financial

reports, audits, and investment policies. Section 398 Annual report. The executive director shall submit an annual report to the Board as may be required by the Executive Committee. Section 4039. Inspection of records. All Pool records and files shall be available for inspection and copying by any authorized representative of any Member at any and all reasonable times.

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Section 410. Fidelity bond. The Pool shall obtain a fidelity bond of one million dollars or such greater amount as may be required by the Executive Committee to cover all losses of misfeasance and malfeasance by the Member representatives and employees. Section 421. Power to contract. The Pool's contractual powers are vested in the Executive Committee. The Executive Committee may delegate all or part of its contractual powers to the executive director or some other agent or employee. Section 432. No compensation. Member representatives shall not receive compensation for time or services provided to the Pool; Provided, Member representatives shall be reimbursed for necessary and reasonable expenses incurred for activities authorized by the Board or Executive Committee in accordance with rules set by the Executive Committee. Section 443. Indemnification. a. The Pool shall indemnify any Member representative or employee of the Pool for all costs and expenses incurred in connection with any legal action or proceeding arising as a consequence of activities on the Pool's behalf so long as the Member representative or employee acted in good faith and without intentional wrongdoing. b. Any determination whether a Member representative or employee is entitled to indemnification shall be made by the Executive Committee. Section 454. Reporting claims. Members shall report all claims and losses to the Pool irrespective of whether the Pool has any indemnification obligation. Section 465. Notice of proposed amendments to interlocal agreement. a. Whenever there is a proposed amendment to the Pool’s interlocal agreement, the Pool shall provide notice thereof to the Members’ governing bodies. b. The notice shall be directed to “Clerk [name of Member transit system]” to the address of the Member’s primary administrative offices. c. No proposed amendment shall become effective sooner than sixty days following notice as required herein.

ARTICLE XI: NEW MEMBERS

Section 476. Application. A local governmental public transit system situated in Washington

desiring to become a Member of the Pool may apply for membership by submitting an application to the executive director. The application shall contain the information requested by the executive director. The application shall be accompanied by a fee in an amount determined by the executive director to cover the cost of analyzing the applicant's loss data, risk profile, and other information. The executive director shall

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forward the application first to the Executive Committee and then to the Board along with his or her recommendation. Section 487. Consideration by Board. An applicant is approved for membership with the affirmative vote of at least three-fourths of all Member representatives. Section 498. Consummation of membership. An applicant for membership as a Member shall become a Member following its subscription of the Pool’s interlocal agreement.

ARTICLE XII: COVERAGE DETERMINATION Section 5049. Tender. Following receipt of a claim or complaint seeking monetary damages, a Member or other person who believes the Pool may have an obligation for such claim or complaint, may tender the claim or complaint to the executive director for a determination of coverage. The tender shall include a copy of the claim or complaint together with such other information as the Member or other person believes supports coverage. Section 510. Decision by executive director. a. Following receipt of a tender the executive director shall promptly review the materials submitted and do whatever additional investigation is necessary to make a coverage determination. b. Following review of the materials and investigation, the executive director shall: (1) Accept the tender, thereby acknowledging a defense and indemnity obligation; (2) Accept the tender but with a reservation of rights, thereby acknowledging a defense obligation but reserving to the future the right to dispute an indemnity obligation; or (3) Deny the tender, thereby denying a defense and indemnity obligation. c. If the executive director accepts a tender but under a reservation of the rights or denies a tender, he or she shall notify the Member or other person thereof in writing. The notice shall specify the reasons for the decision. Section 521. Appeal to Executive Committee a. A Member or other person feeling aggrieved by the decision of the executive director regarding a tender decision, may appeal that decision to the Executive Committee by filing notice thereof with the president and executive director. The notice shall specify the identity of the appellant, the decision from which the appeal is taken, and the reasons why the appellant believes the decision of the executive director was wrong. Such notice must be filed within thirty days following such decision. b. The appeal shall be set for consideration at the next regular meeting of the Executive Committee or, in the discretion of the president, at the regular meeting following the next regular meeting.

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c. Any Executive Committee member employed by the Member taking the appeal shall recuse herself or himself from the proceedings. d. At the hearing before the Executive Committee, the appellant shall first present facts and argument followed by the executive director.

e. Following the hearing or any continuation thereof, the Executive Committee shall issue a written determination on the appeal.

ARTICLE XIII; GOVERNANCE DOCUMENTATION PROCEDURE

Section 532. Governance memorialization procedure. The Board and its Executive Committee may memorialize governance decisions by additions, amendments, or deletions to the “WSTIP Policy Manual,” as described in section 554.

Section 543. Procedural requirements. In order for a section of the policy manual to have binding force, the section must be approved by a majority vote of the Board or Executive Committee unless a supermajority is required. The approval of a section shall be memorialized by the signatures of the Pool’s president and secretary. The section may also be approved as to form by the Pool’s counsel but such approval as to form is not necessary for the section to have binding force.

Section 554. WSTIP Policy Manual. The WSTIP Policy Manual shall be known as such. It shall be consistent with the Pool’s interlocal agreement and bylaws. It shall include a section describing the purpose of the policy, the authority for the policy, a policy statement section which is the substantive portion of the policy, a section describing the historical background for the policy, and other sections as deemed appropriate by the Board or Executive Committee.

ARTICLE XIV: REPEALER Section 56.5 Repealer. Bylaws previously adopted and all amendments thereto are hereby repealed.

Adopted this 9th day of December , 20151 Board of Directors Washington State Transit Insurance Pool

Nick CoveyMark Carlin, President ATTEST: Paul ShinnersBen Foreman, Secretary APPROVED AS TO FORM: Ronald A. Franz, General Counsel

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WSTIP Policy Manual Document Name: Bylaws Date Adopted: 10/01/08

Category: Organizational Planning Revision Date: 5-29-15

Page: 1 of 9


Bylaws

ARTICLE I: DEFINITIONS Section 1. Definitions. The terms set forth below are defined as follows:

a. Board -- The governing body of the Pool is composed of one representative from each Member.

b. Executive Committee – The committee which governs and controls the Pool except as set forth in Section 4.

c. Member -- A local governmental public transit entity which participates in the Pool’s self-funded insurance program.

d. Pool -- The Washington State Transit Insurance Pool. Defined terms are in bold throughout these bylaws.

ARTICLE II: OFFICES Section 2. Principal office. The principal office of the Pool shall be located in Olympia, Washington. Section 3. Other offices. The Executive Committee may, in its discretion, establish other offices for the Pool. ARTICLE III: GOVERNING BOARD Section 4. Governance. With respect to the following, the Pool shall be governed and controlled by the Board: a. Adoption and amendment of bylaws; b. Adoption of annual budget; c. Assessment of annual and special Member allocations and contributions;

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d. Admission and termination of Members; e. Selection of executive director and terms and conditions of employment; f. Purchase, lease, sale, and disposal of real property; g. Changes to the terms and conditions of coverages to be offered by the Pool to its Members; and h. New coverages or programs to be offered by the Pool to its Members; Provided, at least ninety days prior to voting upon whether or not to offer any new coverage or program, the Pool shall provide notice thereof to the governing bodies of the Members, which notice shall include a description of the proposed new coverage or program; and i. The definition and parameters of the Governance Documentation Procedure and WSTIP Policy Manual as set forth in Article XIII. Section 5. Composition. The Board shall be composed of one representative appointed by each Member. Section 6. Voting Rights. Each Member shall have one vote on each matter submitted to the Board. Unless a supermajority vote is required on some particular matter, a majority vote is sufficient to pass a matter. Voting by proxy is not permitted. Section 7. Quorum. A majority of Members representatives is sufficient to constitute a quorum. Section 8. Member representatives.

a. Each Member shall appoint a primary representative, and one or more alternative representatives. A Member’s representative is, authorized to exercise the Member's voting rights in the Pool and to act on behalf of the Member with respect to all matters pertaining to the Pool.

b. If a primary representative is unable to serve or participate in proceedings for any reason an

alternative representative shall represent the Member.

c. Members shall designate representatives in writing and may change designations at any time,. Members shall promptly notify the Pool of any changes.

d. Representatives must be officers or employees of Member. e. Alternative representatives may serve on committees or as officers only if appointed or

elected to the committee or office.

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Section 9. Board meetings. a. The annual meeting shall be held in November or December; Provided, if extraordinary circumstances require the cancellation of the annual meeting, the president may reschedule the annual meeting for some other time as a special meeting. The Board shall elect the secretary and new members of the Executive Committee and adopt its annual budget and Member allocations at the annual meeting. b. In addition to the annual meeting, the Board shall meet quarterly. The annual meeting shall be the meeting for the fourth quarter. Section 10. Membership not transferable. Membership in the Pool is not transferable or assignable. ARTICLE IV: OFFICERS Section 11. Designation. The officers of the Pool shall consist of a president, vice-president, and secretary. All officers shall be primary or alternative Member representatives. Section 12. President. The president shall chair the Board and the Executive Committee. Section 13. Vice-president. The vice-president shall perform the duties of the president in the temporary absence or disability of the president. Section 14. Secretary. The secretary shall certify Pool policy manual documents and minutes of the Board and Executive Committee. Section 15. Election and Progression of Officers.

a. The Board shall elect a secretary and fill vacancies in offices that had become vacant since

the last election at its annual meeting.

b. The secretary shall progress to vice-president and the vice-president shall progress to president.

Section 16. Vacancies in offices.

a. Vacancy in the office of the president, vice president, or secretary shall be filled by the immediate past president until the annual election.

b. If the immediate past president has already been appointed to fill a vacancy or if he or she

declines to fill a vacancy, the Board shall fill the vacancy at a regular or special meeting as soon as practicable.

Section 17. Terms. The terms of office shall be one year and shall commence immediately following election of the secretary.

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ARTICLE V: EXECUTIVE COMMITTEE Section 18. Powers. The Pool shall be governed and controlled by the Executive Committee in all respects except for those matters reserved to the Board by Article III, Section 4. The Executive Committee shall make recommendations to the Board with respect to the annual budget, assessment of Member allocations and contributions, the purchase, lease, sale, and disposal of real property, and all other matters that may come before the Board Section 19. Composition.

a. The Executive Committee shall consist of the president, immediate past president, vice-president, secretary, and four additional members elected by the Board at every annual meeting.

b. All members of the Executive Committee shall be primary or alternative Member

representatives. c. Of the four members elected annually, one shall be from a small transit system, one shall be

from a medium transit system, and one shall be from a large transit system, and one shall be “at large”; Provided, if no eligible member from a small, medium, or large system is willing to serve, that position shall be open to any other Member representative . The criteria for small, medium, and large shall be established by the Executive Committee.

Section 20. Meetings. The Executive Committee shall meet every month. The president may cancel any monthly meeting. A majority of members of the Executive Committee shall be sufficient to constitute a quorum. Section 21. Claims Review. The Executive Committee shall review and, if appropriate, approve proposed settlements for any claim or lawsuit against any Member which is proposed for settlement in an amount greater than the standing settlement authority of the executive director. Section 22. Committees. The Executive Committee may, in its discretion, establish committees, either ad hoc or standing.

ARTICLE VI: VACANCIES, REMOVALS, AND RESIGNATIONS Section 23. Vacancies.

a. Vacancies in the Executive Committee shall be filled by the Board at a regular meeting as soon as practicable. The person appointed to fill the vacancy shall complete the term of his or her predecessor.

b. Vacancies in Member representative positions shall be filled only by a Member representative from a Member that meets the size criterial for the vacant position.

c. A vacancy in the immediate past president position shall not be filled.

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d. If an Executive Committee member ceases to be an officer or employee of Member, the position shall be considered vacant.

Section 24. Removal. An Executive Committee member may be removed by a two-thirds vote of all Member representatives. Section 25. Resignation. An Executive Committee member may resign by providing written notice to the Board or president. Such resignation shall be effective upon receipt or at some other specified time. A resignation shall be effective without acceptance.

ARTICLE VII: MEETINGS

Section 26. Meeting time, date and place. The president shall establish the time, date and place of the Board's annual meeting and for regular and special meetings of the Board and Executive Committee. Section 27. Notice of meetings. a. Notice of all meetings shall be provided to all Member representatives. b. The notice shall specify the time, date, and place of each meeting and, in the case of a special meeting, the matters or topics which will be presented for consideration. Section 28. Executive sessions. The Board, Executive Committee, and any other duly established committee may adjourn to executive session to consider those matters authorized by RCW 42.30.110 and RCW 48.62.101.. Section 29. Special meetings. Special meetings of the Board or Executive Committee may be called as authorized by RCW 42.30.080. Section 30. Conduct of meetings. Meetings shall be conducted pursuant to Robert's Rules of Order to the extent not inconsistent with statutes, these bylaws, or the interlocal agreement through which the Pool was established. ARTICLE VIII. APPOINTED POSITIONS Section 31. Treasurer.

a. The Board shall appoint a Treasurer pursuant to RCW 48.62.111 as now or hereafter amended. The Board may replace the Treasurer at any time.

b. The duties of the Treasurer shall be as specified by the Executive Committee. The

Treasurer must be a primary or alternative Member representative. If the Treasurer is not a member of the Executive Committee, he or she shall be an ex officio, non-voting member thereof.

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Section 32. Auditor. The Pool’s executive director shall serve as its Auditor. The duties of the Auditor shall be as specified by the Executive Committee. Section 33. Other positions. The Executive Committee may appoint such other positions as it deems appropriate and, if it does so, shall specify the duties of the position.

ARTICLE IX: EMPLOYEES Section 34. Executive Director. a. The Board shall engage an executive director upon mutually agreeable terms and conditions. The Executive Committee shall evaluate the performance of the executive director following input from the Board which may be through the small, medium,and large Executive Committee members. b. The executive director shall be the chief executive officer of the Pool and shall be responsible for its efficient operation and overall direction. c. The executive director shall execute the directives of the Board and the Executive Committee. Section 35. General Counsel. The Executive Committee may engage general counsel for the Pool upon terms and conditions it deems appropriate. The general counsel shall be the legal advisor to the Board, Executive Committee, and Pool staff. Section 36. Other Employees. The executive director shall employ such other individuals as may be authorized by the Executive Committee and consistent with the annual budget. ARTICLE X: OPERATIONS Section 37. Accounts. The Pool shall establish and maintain funds and accounts consistent with generally accepted accounting practices and as may be required by state laws and regulations. Section 38. Internal Controls.

a. The books and records of the Pool shall be audited annually. b. The Executive Committee shall establish policies with respect to internal controls, financial

reports, audits, and investment policies. Section 39 Annual report. The executive director shall submit an annual report to the Board as may be required by the Executive Committee. Section 40. Inspection of records. All Pool records and files shall be available for inspection and copying by any authorized representative of any Member at any and all reasonable times.

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Section 41. Fidelity bond. The Pool shall obtain a fidelity bond of one million dollars or such greater amount as may be required by the Executive Committee to cover all losses of misfeasance and malfeasance by the Member representatives and employees. Section 42. Power to contract. The Pool's contractual powers are vested in the Executive Committee. The Executive Committee may delegate all or part of its contractual powers to the executive director or some other agent or employee. Section 43. No compensation. Member representatives shall not receive compensation for time or services provided to the Pool; Provided, Member representatives shall be reimbursed for necessary and reasonable expenses incurred for activities authorized by the Board or Executive Committee in accordance with rules set by the Executive Committee. Section 44. Indemnification. a. The Pool shall indemnify any Member representative or employee of the Pool for all costs and expenses incurred in connection with any legal action or proceeding arising as a consequence of activities on the Pool's behalf so long as the Member representative or employee acted in good faith and without intentional wrongdoing. b. Any determination whether a Member representative or employee is entitled to indemnification shall be made by the Executive Committee. Section 45. Reporting claims. Members shall report all claims and losses to the Pool irrespective of whether the Pool has any indemnification obligation. Section 46. Notice of proposed amendments to interlocal agreement. a. Whenever there is a proposed amendment to the Pool’s interlocal agreement, the Pool shall provide notice thereof to the Members’ governing bodies. b. The notice shall be directed to “Clerk [name of Member transit system]” to the address of the Member’s primary administrative offices. c. No proposed amendment shall become effective sooner than sixty days following notice as required herein.

ARTICLE XI: NEW MEMBERS

Section 47. Application. A local governmental public transit system situated in Washington

desiring to become a Member of the Pool may apply for membership by submitting an application to the executive director. The application shall contain the information requested by the executive director. The application shall be accompanied by a fee in an amount determined by the executive director to cover the cost of analyzing the applicant's loss data, risk profile, and other information. The executive director shall

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forward the application first to the Executive Committee and then to the Board along with his or her recommendation. Section 48. Consideration by Board. An applicant is approved for membership with the affirmative vote of at least three-fourths of all Member representatives. Section 49. Consummation of membership. An applicant for membership as a Member shall become a Member following its subscription of the Pool’s interlocal agreement.

ARTICLE XII: COVERAGE DETERMINATION Section 50. Tender. Following receipt of a claim or complaint seeking monetary damages, a Member or other person who believes the Pool may have an obligation for such claim or complaint, may tender the claim or complaint to the executive director for a determination of coverage. The tender shall include a copy of the claim or complaint together with such other information as the Member or other person believes supports coverage. Section 51. Decision by executive director. a. Following receipt of a tender the executive director shall promptly review the materials submitted and do whatever additional investigation is necessary to make a coverage determination. b. Following review of the materials and investigation, the executive director shall: (1) Accept the tender, thereby acknowledging a defense and indemnity obligation; (2) Accept the tender but with a reservation of rights, thereby acknowledging a defense obligation but reserving to the future the right to dispute an indemnity obligation; or (3) Deny the tender, thereby denying a defense and indemnity obligation. c. If the executive director accepts a tender but under a reservation of the rights or denies a tender, he or she shall notify the Member or other person thereof in writing. The notice shall specify the reasons for the decision. Section 52. Appeal to Executive Committee a. A Member or other person feeling aggrieved by the decision of the executive director regarding a tender decision, may appeal that decision to the Executive Committee by filing notice thereof with the president and executive director. The notice shall specify the identity of the appellant, the decision from which the appeal is taken, and the reasons why the appellant believes the decision of the executive director was wrong. Such notice must be filed within thirty days following such decision. b. The appeal shall be set for consideration at the next regular meeting of the Executive Committee or, in the discretion of the president, at the regular meeting following the next regular meeting.

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c. Any Executive Committee member employed by the Member taking the appeal shall recuse herself or himself from the proceedings. d. At the hearing before the Executive Committee, the appellant shall first present facts and argument followed by the executive director.

e. Following the hearing or any continuation thereof, the Executive Committee shall issue a written determination on the appeal.

ARTICLE XIII; GOVERNANCE DOCUMENTATION PROCEDURE

Section 53. Governance memorialization procedure. The Board and its Executive Committee may memorialize governance decisions by additions, amendments, or deletions to the “WSTIP Policy Manual,” as described in section 55.

Section 54. Procedural requirements. In order for a section of the policy manual to have binding force, the section must be approved by a majority vote of the Board or Executive Committee unless a supermajority is required. The approval of a section shall be memorialized by the signatures of the Pool’s president and secretary. The section may also be approved as to form by the Pool’s counsel but such approval as to form is not necessary for the section to have binding force.

Section 55. WSTIP Policy Manual. The WSTIP Policy Manual shall be known as such. It shall be consistent with the Pool’s interlocal agreement and bylaws. It shall include a section describing the purpose of the policy, the authority for the policy, a policy statement section which is the substantive portion of the policy, a section describing the historical background for the policy, and other sections as deemed appropriate by the Board or Executive Committee.

ARTICLE XIV: REPEALER Section 56. Repealer. Bylaws previously adopted and all amendments thereto are hereby repealed.

Adopted this day of , 2015 Board of Directors Washington State Transit Insurance Pool

Nick Covey, President ATTEST: Paul Shinners, Secretary APPROVED AS TO FORM: Ronald A. Franz, General Counsel

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WSTIP

Strategic Plan

AN ORGANIZATIONAL DEVELOPMENT PROCESS

April 2015

STRATEGIC PLAN Introduction Each year the Washington State Transit Insurance Pool (WSTIP) faces challenging issues. Many of these issues are directly related to the diversity of the operations of its members and the challenge of providing insuring and risk management products some of which are in competition with a global insurance industry. The members of WSTIP recognize that they are the best judges of their own operations, and that pooling their financial and knowledge resources offers them a potential level of service not available from commercial insurers. WSTIP recognizes that it must continually use its member knowledge, consultants and professional staff expertise, and sound risk management principles to continuously upgrade its products and services. Mission/Vision Statement-Strategic Objectives The mission of the Washington State Transit Insurance Pool is simple, broad and all encompassing. The mission is to reduce member agencies cost of risk. The organization’s vision is to be the premier provider of high-quality, cost effective risk management products and services for its member agencies. Core Values The mission and vision is derived from the stated core values of the organization, which in turn support the implementation of the mission and vision:

• Integrity: Doing the right thing. Member representatives and staff strive to always be honest and

straightforward with each other, operating within the letter and spirit of the law, and utilizing all available tools to recognize, assess, and manage risk.

• Leadership: Vision, Focus, and Results. Member representatives and staff have a clear vision of where the Pool is going, focusing resources on Board defined objectives and strategies, developing collaboration skills, and taking on assigned areas of responsibility with a deep commitment to deliver results.

• Ownership: We’re all in this together. Member representatives place the interests of the Pool above the interests of their member systems, understanding that all members benefit most when the Pool is successful. This includes accepting responsibility for the entire Pool’s needs, and seeking not only to improve their own systems but others’ as well.

• Enthusiasm for Success: Determined to be great. Member representatives and staff are determined to be the best at what matters most. They have a healthy dissatisfaction with the status quo, a compelling desire to improve and excel, and are committed to excellent customer service.

• Trust: Good people doing great work. Member representatives and staff respect Pool colleagues, members, and stakeholders, treating them as they would want to be treated. They have confidence in each other’s capabilities and intentions, and believe people work best when there is a foundation of trust.

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Long-Range Strategic Vision The WSTIP Board has adopted a Financial Target Policy that essentially states…to the maximum extent feasible, in the adoption of the Pool’s annual budget, incorporate allocations and contributions which allow and support an optional self-insured retention for liability exposures of $5 million by 2023. Strategic Planning-Implementing the WSTIP Policy Manual In addition to the long-range strategic vision of this Strategic Plan lies the WSTIP Policy Manual. The policy manual provides for the Board’s direction in the areas of Foundational documents, Governance, Operations, Finance with measurable outcomes and assigned responsibilities. Rather than engage in a process that is staff and paper intensive and duplicative of the Policy Manual, the WSTIP Board has concentrated on key strategic outcomes and emerging issues focused around several strategic objectives. The broad strategic objectives incorporated herein are ongoing in nature. Each year, supporting operational plans will be developed to focus the staff and membership on continuously improving the outcomes in each broad area. The Board recognizes that its role is to develop the strategic direction contained in the plan and evaluate the organization's efforts to achieve that plan. The strategic and operational objectives are the centerpiece of each annual work plan implemented through the administrative budget. In this respect, the Board has committed to evaluating the progress of the Pool’s Executive Director’s and the implementation of the annual work plan. Strategic Objectives: #1: Improve the efficiency and effectiveness of existing products, services and business practices

A. Products and Services:

• Conduct a member satisfaction survey triennially of product and services provided.

• Conduct an annual staff review of products and services to determine member utilization, cost of delivery and effectiveness in implementing stated program objectives.

• Loss prevention focus:

o Increase mobility device securement on Fixed route and Paratransit Modes -

Through education and products, reduce personal injuries due to the lack of appropriate mobility device securement.

o Reduce at fault rear-end events – Review potential after-market collision avoidance technologies or adaptive braking systems that warn or take action prior to rear-end accident.

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o Reduce pedestrian strikes – Review potential after-market collision avoidance

technologies or adaptive braking systems that warn or take action to a pedestrian strike.

B. Business Practices:

• In addition to the annual actuarial study, the Pool shall undertake a triennial Capital Solvency study to determine and/or recommend the annual reserves needed to achieve the self-insured retention set for the year 2023.

• Implement a review every three years of both Mandatory and Advisory Best Practices

with member agencies and report findings to Board. #2: Provide competitive and stable insuring rates

• Annually, staff will develop and implement a plan to achieve the current year Capital Solvency Targets as authorized by the Board.

• As directed, test WSTIP pricing against the commercial market place to assure price

competitiveness. #3: Develop Staff and Board Resources

• Provide an annual new or newly appointed director’s orientation in addition to one on one orientation once an appointment has been made.

• Develop and implement a succession and business continuity plan for key executive staff

positions

• Provide continuing education opportunities for Board members to expand their knowledge of Pooling and Pool governance.

#4: Develop new products and services to meet member needs

• Survey membership on risk management issues and needs.

• Evaluate emerging risk exposures, threats and trends, (i.e. cyber liability, changing ridership profile, collision avoidance technology) and develop educational and risk management tools to assist member agencies in addressing them.

• Evaluate both traditional (Pool developed and ran) and non-traditional (outsourcing,

partnership, etc.) approach to addressing identified membership needs.

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201543-201654 Property Coverage Document RAF: 0611/161046/201543

July 1, 201543 to July 1, 201654

PROPERTYroperty

COVERAGEoverage DOCUMENTocument

Washington State Transit Insurance Pool

201543-201654 Property Coverage Document RAF: 0611/161046/201543 TABLE OF CONTENTS

INTRODUCTION ........................................................................................................................................... 1 LAYERED COVERAGE ................................................................................................................................ 1 Section 1. COVERAGE PART ...................................................................................................................... 2 Section 2. LIMITS OF COVERAGE .............................................................................................................. 2 Section 3. CONDITIONS ............................................................................................................................... 3 Section 4. EXCLUSIONS .............................................................................................................................. 4 Section 5. DEFINITIONS .............................................................................................................................. 5



INTRODUCTION

The Washington State Transit Insurance Pool (Pool) is not an insurance company. It is an entity created pursuant to RCW 48.62. It is controlled and governed by applicable state statutes and regulations, the Interlocal Agreement through which the Pool was formed, and its own bylaws and resolutions. The state statutes and regulations which apply to insurance companies do not apply to the Pool. The Pool is not regulated by the state insurance commissioner. The judicial cases which apply to the construction and interpretation of insurance policies do not apply to this coverage document. This coverage document shall be construed, applied, and interpreted in accordance with the Pool’s rules, regulations, and bylaws. Various provisions in this coverage document restrict coverage. Please read the entire document carefully to determine rights, duties, and what is and is not covered. Throughout this coverage document the words "you" and "your" refer to the Member shown in the Coverage Declarations. The words "we," "us," "our," “WSTIP” or “Pool” refer to the Washington State Transit Insurance Pool. Words and phrases that appear in bold italics have special meaning. Please refer to DEFINITIONS in Section 5.

LAYERED COVERAGE

The coverage provided by the Pool’s program is in layers. The first layer of coverage is funded by the Pool and its terms and conditions are as set forth in this coverage document. Above the Pool’s layer of coverage are coverages provided by one or more excess or reinsurers. Coverage for any loss above the Pool’s layer shall be determined by the terms, conditions, and exceptions as set forth in the excess or reinsurance coverage documents.

Washington State Transit Insurance Pool 1


Section 1.

COVERAGE PART A. Structures and personal property With respect to the following we will pay for all direct physical loss or damage to all fixtures, structures, and personal property: 1. Owned by you; 2. Situated on your real property; 3. For which you have an obligation to insure; 4. Owned by others but in your care, custody, or control. B. Business income and extra expense We will pay for your loss of business income and extra expense caused by the direct physical loss or damage to your fixtures and structures during the period required for the repair or replacement of such fixtures and structures. C. Valuable papers and accounts receivable We will pay for your loss of or expense to restore valuable papers and accounts receivable caused by the direct physical loss or damage to your fixtures and structures. D. Coverage extensions We cover:

1. Loss and damage sustained to property which you acquire following inception of this coverage document; and

2. Demolition and debris removal necessitated by a covered loss.

Section 2. LIMITS OF COVERAGE

A. Limits per occurrence The limits of coverage as set forth in the declaration are per occurrence. We will not pay for any loss or damage above the limits of coverage. Where a single occurrence causes damage to more than one Pool member, the Pool will not pay for any loss beyond the limits of coverage for a single occurrence. Coverage limits shall be shared between members sustaining damage on a pro rata basis. B. Sublimits



Notwithstanding anything herein to the contrary, if the declarations contain limits for specified types of losses, then such limits shall apply to the specified type of loss on an occurrence basis. We will not pay for any loss or damage above the limits of coverage. C. Deductible We will only pay for any loss or damage above your deductible as set forth in the declarations.

Section 3. CONDITIONS

A. Time of loss The coverage we provide applies only to damage or loss sustained during the policy period. B. Notice of loss In the event you sustain any loss or damage for which there may be coverage, you must promptly provide notice thereof to us. C. Investigation

1. We may investigate any loss or damage for which we may provide coverage and you must cooperate with us in such investigation. Such cooperation shall include allowing us to inspect your premises, providing documents and other information we request, and allowing us to interview you, your employees, or other representatives.

2. If we so request you must allow us to take a sworn statement from you or your representatives.

D. Avoidance of further losses If you sustain loss or damage for which we may provide coverage, you must take reasonable measures to protect the covered property from further loss or damage. E. Basis of loss determination In the event of loss or damage for which we provide coverage, we will pay the lesser of:

1. The fair market value of the lost or damaged property (if the owner of the property is not you, we will pay the owner); or

2. The cost of repairing or replacing the lost or damaged property. F. Loss adjustment of non-owned property We may adjust losses with the owner of the lost or damaged property if other than you. If the owner of the lost or damaged property sues you concerning the lost or damaged property, we may elect to defend you at our expense against such suit.



G. Disputes concerning value

1. If the owner of the property and the Pool’s executive director can notcannot agree upon coverage or the amount of loss or damage, the owner of the property may appeal the executive director’s decision to the Pool’s executive committee.

2. The decision of the Pool’s executive committee on coverage or value shall be final. H. No abandonment You may not abandon any property to us. I. No assignment You may not assign or transfer this coverage document or any rights you may have hereunder without our consent. J. Other insurance If you have other coverage or insurance on property which describes such property with more specificity than this coverage document, then this coverage shall be excess of such other coverage or insurance. However if such other coverage or insurance does not describe the property covered with greater specificity, then this coverage shall be primary. K. Subrogation In the event we pay any loss or damage, we shall be subrogated to all of your rights of recovery against any other person or entity to the extent of our payment unless you have waived your rights prior to the loss. You must cooperate with us in the enforcement of our subrogation rights, including the execution of necessary and appropriate documents. L. Concealment This coverage document shall be void if, before or after any loss, you have willfully concealed or misrepresented any material fact or circumstance concerning this coverage.

Section 4. EXCLUSIONS

This coverage document does not apply to and there is no coverage for:

A. Aircraft;

B. Watercraft;

C. Land;



D. Loss or damage caused by or resulting from moths, vermin, termites, or other insects, inherent

vice, latent defect, faulty materials, error in design, faulty workmanship, wear, tear or gradual deterioration, contamination, pollution, rust, corrosion, wet or dry rot, mold, or asbestos-related loss;

E. Physical loss or damage by normal settling, shrinkage or expansion of buildings or foundations;

F. Loss or damage caused by or resulting from misappropriation, conversion, inventory shortage,

unexplained disappearance, infidelity or any dishonest act on the part of you or your employees, agents, or others to whom the property may be entrusted;

G. Loss or damage to personal property resulting from shrinkage, evaporation, loss of weight,

leakage, breakage of fragile articles, marring, scratching, exposure to light or change in color, texture or flavor;

H. Loss caused directly or indirectly by war or hostile or warlike action by any government or

sovereign power;

I. Loss from nuclear reaction or radiation or radioactive contamination;

J. Loss to bridges, roadways, walks, patios, or other paved surfaces.

Section 5. DEFINITIONS

The following terms are defined as follows: A. Auto physical damage—damage to your own motor vehicles from perils including, but not limited to, collision, vandalism, fire, and theft AB. Extra expense – the excess cost to conduct your business operations over and above the costs that you would have normally incurred during the period of needed to repair or replace property as a result of covered loss or damage. BC. Occurrence – an event, including continuous or repeated exposure to substantially the same harmful condition, which causes physical loss or damage to property for which there is coverage from this coverage document. A single occurrence may be the cause of damage to more than one Pool member. This Coverage Document was adopted by the Pool’s Board of Directors on _______________.

Verified by general counsel on _____________.


2015-2016 Property Coverage Document RAF: 06/09/2015 2013-2014 Property Coverage Document

ENDORSEMENT No. 1

With respect to Yakima Transit only, Section 1 Coverage Part is deleted in its entirety and replaced with the following:

We provide coverage only for Auto Physical Damage to Yakima Transit vehicles. Auto Physical Damage is defined as direct physical loss or damage including, but not limited to, collision, vandalism, fire, and theft.



July 1, 2015 to July 1, 2016

PROPERTY

COVERAGE DOCUMENT


2015-2016 Property Coverage Document RAF: 06/16/2015 TABLE OF CONTENTS

INTRODUCTION ........................................................................................................................................... 1 LAYERED COVERAGE ................................................................................................................................ 1 Section 1. COVERAGE PART ...................................................................................................................... 2 Section 2. LIMITS OF COVERAGE .............................................................................................................. 2 Section 3. CONDITIONS ............................................................................................................................... 3 Section 4. EXCLUSIONS .............................................................................................................................. 4 Section 5. DEFINITIONS .............................................................................................................................. 5



INTRODUCTION

The Washington State Transit Insurance Pool (Pool) is not an insurance company. It is an entity created pursuant to RCW 48.62. It is controlled and governed by applicable state statutes and regulations, the Interlocal Agreement through which the Pool was formed, and its own bylaws and resolutions. The state statutes and regulations which apply to insurance companies do not apply to the Pool. The Pool is not regulated by the state insurance commissioner. The judicial cases which apply to the construction and interpretation of insurance policies do not apply to this coverage document. This coverage document shall be construed, applied, and interpreted in accordance with the Pool’s rules, regulations, and bylaws. Various provisions in this coverage document restrict coverage. Please read the entire document carefully to determine rights, duties, and what is and is not covered. Throughout this coverage document the words "you" and "your" refer to the Member shown in the Coverage Declarations. The words "we," "us," "our," “WSTIP” or “Pool” refer to the Washington State Transit Insurance Pool. Words and phrases that appear in bold italics have special meaning. Please refer to DEFINITIONS in Section 5.

LAYERED COVERAGE

The coverage provided by the Pool’s program is in layers. The first layer of coverage is funded by the Pool and its terms and conditions are as set forth in this coverage document. Above the Pool’s layer of coverage are coverages provided by one or more excess or reinsurers. Coverage for any loss above the Pool’s layer shall be determined by the terms, conditions, and exceptions as set forth in the excess or reinsurance coverage documents.



Section 1.

COVERAGE PART A. Structures and personal property With respect to the following we will pay for all direct physical loss or damage to all fixtures, structures, and personal property: 1. Owned by you; 2. Situated on your real property; 3. For which you have an obligation to insure; 4. Owned by others but in your care, custody, or control. B. Business income and extra expense We will pay for your loss of business income and extra expense caused by the direct physical loss or damage to your fixtures and structures during the period required for the repair or replacement of such fixtures and structures. C. Valuable papers and accounts receivable We will pay for your loss of or expense to restore valuable papers and accounts receivable caused by the direct physical loss or damage to your fixtures and structures. D. Coverage extensions We cover:

1. Loss and damage sustained to property which you acquire following inception of this coverage document; and

2. Demolition and debris removal necessitated by a covered loss.

Section 2. LIMITS OF COVERAGE

A. Limits per occurrence The limits of coverage as set forth in the declaration are per occurrence. We will not pay for any loss or damage above the limits of coverage. Where a single occurrence causes damage to more than one Pool member, the Pool will not pay for any loss beyond the limits of coverage for a single occurrence. Coverage limits shall be shared between members sustaining damage on a pro rata basis. B. Sublimits



Notwithstanding anything herein to the contrary, if the declarations contain limits for specified types of losses, then such limits shall apply to the specified type of loss on an occurrence basis. We will not pay for any loss or damage above the limits of coverage. C. Deductible We will only pay for any loss or damage above your deductible as set forth in the declarations.

Section 3. CONDITIONS

A. Time of loss The coverage we provide applies only to damage or loss sustained during the policy period. B. Notice of loss In the event you sustain any loss or damage for which there may be coverage, you must promptly provide notice thereof to us. C. Investigation

1. We may investigate any loss or damage for which we may provide coverage and you must cooperate with us in such investigation. Such cooperation shall include allowing us to inspect your premises, providing documents and other information we request, and allowing us to interview you, your employees, or other representatives.

2. If we so request you must allow us to take a sworn statement from you or your representatives.

D. Avoidance of further losses If you sustain loss or damage for which we may provide coverage, you must take reasonable measures to protect the covered property from further loss or damage. E. Basis of loss determination In the event of loss or damage for which we provide coverage, we will pay the lesser of:

1. The fair market value of the lost or damaged property (if the owner of the property is not you, we will pay the owner); or

2. The cost of repairing or replacing the lost or damaged property. F. Loss adjustment of non-owned property We may adjust losses with the owner of the lost or damaged property if other than you. If the owner of the lost or damaged property sues you concerning the lost or damaged property, we may elect to defend you at our expense against such suit.



G. Disputes concerning value

1. If the owner of the property and the Pool’s executive director cannot agree upon coverage or the amount of loss or damage, the owner of the property may appeal the executive director’s decision to the Pool’s executive committee.

2. The decision of the Pool’s executive committee on coverage or value shall be final. H. No abandonment You may not abandon any property to us. I. No assignment You may not assign or transfer this coverage document or any rights you may have hereunder without our consent. J. Other insurance If you have other coverage or insurance on property which describes such property with more specificity than this coverage document, then this coverage shall be excess of such other coverage or insurance. However if such other coverage or insurance does not describe the property covered with greater specificity, then this coverage shall be primary. K. Subrogation In the event we pay any loss or damage, we shall be subrogated to all of your rights of recovery against any other person or entity to the extent of our payment unless you have waived your rights prior to the loss. You must cooperate with us in the enforcement of our subrogation rights, including the execution of necessary and appropriate documents. L. Concealment This coverage document shall be void if, before or after any loss, you have willfully concealed or misrepresented any material fact or circumstance concerning this coverage.

Section 4. EXCLUSIONS

This coverage document does not apply to and there is no coverage for:

A. Aircraft;

B. Watercraft;

C. Land;



D. Loss or damage caused by or resulting from moths, vermin, termites, or other insects, inherent

vice, latent defect, faulty materials, error in design, faulty workmanship, wear, tear or gradual deterioration, contamination, pollution, rust, corrosion, wet or dry rot, mold, or asbestos-related loss;

E. Physical loss or damage by normal settling, shrinkage or expansion of buildings or foundations;

F. Loss or damage caused by or resulting from misappropriation, conversion, inventory shortage,

unexplained disappearance, infidelity or any dishonest act on the part of you or your employees, agents, or others to whom the property may be entrusted;

G. Loss or damage to personal property resulting from shrinkage, evaporation, loss of weight,

leakage, breakage of fragile articles, marring, scratching, exposure to light or change in color, texture or flavor;

H. Loss caused directly or indirectly by war or hostile or warlike action by any government or

sovereign power;

I. Loss from nuclear reaction or radiation or radioactive contamination;

J. Loss to bridges, roadways, walks, patios, or other paved surfaces.

Section 5. DEFINITIONS

The following terms are defined as follows: A. Extra expense – the excess cost to conduct your business operations over and above the costs that you would have normally incurred during the period of needed to repair or replace property as a result of covered loss or damage. B. Occurrence – an event, including continuous or repeated exposure to substantially the same harmful condition, which causes physical loss or damage to property for which there is coverage from this coverage document. A single occurrence may be the cause of damage to more than one Pool member.



ENDORSEMENT No. 1

With respect to Yakima Transit only, Section 1 Coverage Part is deleted in its entirety and replaced with the following:

We provide coverage only for Auto Physical Damage to Yakima Transit vehicles. Auto Physical Damage is defined as direct physical loss or damage including, but not limited to, collision, vandalism, fire, and theft.


Auto Physical Damage Insurance Proposal 2015-2016

Presented on June 10, 2015 by: Brian White Vice President

Lilian Vanvieldt Senior Vice President Kortney Bolton Assistant Account Manager


Alliant Insurance Services, Inc. 1301 Dove Street, Suite 200 Newport Beach, CA 92660 O 949 756 0271 F 949 756 2713

CA License No. 0C36861

www.alliant.com

Date Issued: 06/10/15 Alliant Insurance Services, Inc. | www.alliant.com | CA License No. 0C36861 Page 2


2015-2016 Auto Physical Damage Insurance Proposal

Line of Coverage Auto Physical Damage Coverage

PRESENT PROPOSED INSURANCE COMPANY: Alterra Excess & Surplus Insurance Company Alterra Excess & Surplus Insurance Company A.M. BEST RATING: A (Excellent), Financial Size Category: XIV ($1.5 Billion

to $2 Billion) A (Excellent), Financial Size Category: XV ($2 Billion or greater) as of May 15, 2015

STANDARD & POOR’S RATING: A (Strong) A (Strong) as of November 16, 2011 WASHINGTON STATUS: Non-Admitted Non-Admitted POLICY TERM: July 01, 2014 to July 01, 2015 July 01, 2015 to July 01, 2016 COVERAGE: Auto Physical Damage - Transit – private passenger

automobiles, commercial automobiles, (including hired automobiles, trucks, trailers, or semi-trailers) and any other licensed vehicles designated for travel on public roads owned or operated by the Named Insured.

Same as present

REPORTED TIV: $622,074,810 $640,239,878

LIMITS OF LIABILITY: $ 20,000,000 Per Occurrence Same as present $ 1,000,000 Per Vehicle $ 1,000,000 Per Newly Acquired Vehicle

DEDUCTIBLE: $250,000 Same as present CONDITIONS: • This coverage is written on an Annual Adjustment

basis. Please see the Annual Adjustment Vehicle Physical Damage Insuring Agreement Endorsement

• This coverage is written on an Annual Adjustment basis. Please see the Annual Adjustment Vehicle Physical Damage Insuring Agreement Endorsement

http://www.alliant.com/




Line of Coverage Auto Physical Damage Coverage – Continued

PRESENT PROPOSED CONDITIONS: (CON’T)

for the applicable terms and conditions • The following changes will be made to Paragraph 6.

Exclusions on Page 2 of 6 of the Vehicle Physical Damage Insuring Agreement as found on the expiring policy #MAXA4IM0047212: o Subparagraph C.(1) will be deleted o Subparagraph C.(2) will be amended to read as

follows: While operated by any person in violation of state law relating to motor vehicle operator license requirements except in case of theft;”

o Subparagraph C.(4) will be amended to read as follows: “While in violation of the Federal Motor Carrier’s Transportation of Hazardous Materials: Driving and Parking Rules.”

for the applicable terms and conditions

• This proposal may differ from the terms and conditions presented in the submission, please review it carefully

• This proposal is subject to disclosure of any claims

or occurrences which the applicant shall become aware of subsequent to the application date and prior to the inception date of coverage for this proposal

PREMIUM: $ 178,535.00 Policy Premium $ 180,186.00 Policy Premium $ 3,570.70 Surplus Lines Taxes $ 3,603.72 Surplus Lines Taxes $ 178.53 Stamping Fees $ 180.19 Stamping Fees $ 182,284.23 Total Cost $ 183,969.91 Total Cost DEPOSIT PREMIUM: $178,535.00 $180,186.00 MINIMUM PREMIUM: $50,000 Same as present






PRESENT PROPOSED TERRORISM: $5,356.00 included in above premium $5,401.00 included in above premium REPORTING PERIOD: Annually Same as present ADJUSTMENT PERIOD: Annually – The Annual Adjustment rate applicable is

50% of the Annual Policy Rate of $0.0287 per $100 of values reported

Annually – The Annual Adjustment rate applicable is 50% of the Annual Policy Rate of $0.0273 per $100 of values reported






QUOTE VALID UNTIL: August 30, 2015 SUBJECTIVITIES: • Written request to bind coverage

• All Surplus Lines Taxes/Fees are fully earned BROKER: ALLIANT INSURANCE SERVICES, INC.

Newport Beach, CA 92660 Brian White, Vice President Lilian Vanvieldt, Senior Vice President Kortney Bolton, Assistant Account Manager

IMPORTANT NOTICE The Foreign Account Tax Compliance Act (FATCA) requires the notification of certain financial accounts to the United States Internal Revenue Service.

Aliant does not provide tax advice so please contact your tax consultant for your obligation regarding FATCA.

CLAIMS REPORTING NOTICE Your policy will come with specific claim reporting requirements. Please make sure you understand these obligations.

Contact your Alliant Service Team with any questions.





Disclosures

This proposal of insurance is provided as a matter of convenience and information only. All information included in this proposal, including but not limited to personal and real property values, locations, operations, products, data, automobile schedules, financial data and loss experience, is based on facts and representations supplied to Alliant Insurance Services, Inc. by you. This proposal does not reflect any independent study or investigation by Alliant Insurance Services, Inc. or its agents and employees. Please be advised that this proposal is also expressly conditioned on there being no material change in the risk between the date of this proposal and the inception date of the proposed policy (including the occurrence of any claim or notice of circumstances that may give rise to a claim under any policy which the policy being proposed is a renewal or replacement). In the event of such change of risk, the insurer may, at its sole discretion, modify, or withdraw this proposal whether or not this offer has already been accepted.

This proposal is not confirmation of insurance and does not add to, extend, amend, change, or alter any coverage in any actual policy of insurance you may have. All existing policy terms, conditions, exclusions, and limitations apply. For specific information regarding your insurance coverage, please refer to the policy itself. Alliant Insurance Services, Inc. will not be liable for any claims arising from or related to information included in or omitted from this proposal of insurance

Alliant embraces a policy of transparency with respect to its compensation from insurance transactions. Details on our compensation policy, including the types of income that Alliant may earn on a placement, are available on our website at www.alliant.com. For a copy of our policy or for any inquiries regarding compensation issues pertaining to your account you may also contact us at: Alliant Insurance Services, Inc., Attention: General Counsel, 701 B Street, 6th Floor, San Diego, CA 92101.

Analyzing insurers' over-all performance and financial strength is a task that requires specialized skills and in-depth technical understanding of all aspects of insurance company finances and operations. Insurance brokerages such as Alliant Insurance typically rely upon rating agencies for this type of market analysis. Both A.M. Best and Standard and Poor's have been industry leaders in this area for many decades, utilizing a combination of quantitative and qualitative analysis of the information available in formulating their ratings.

A.M. Best has an extensive database of nearly 6,000 Life/Health, Property Casualty and International companies. You can visit them at www.ambest.com. For additional information regarding insurer financial strength ratings visit Standard and Poor's website at www.standardandpoors.com.


http://www.alliantinsurance.com/

http://www.ambest.com/

http://www.standardandpoors.com/




Disclosures - Continued Our goal is to procure insurance for you with underwriters possessing the financial strength to perform. Alliant does not, however, guarantee the solvency of any underwriters with which insurance or reinsurance is placed and maintains no responsibility for any loss or damage arising from the financial failure or insolvency of any insurer. We encourage you to review the publicly available information collected to enable you to make an informed decision to accept or reject a particular underwriter. To learn more about companies doing business in your state, visit the Department of Insurance website for that state. NY REGULATION 194 DISCLOSURE Alliant Insurance Services, Inc. is an insurance producer licensed by the State of New York. Insurance producers are authorized by their license to confer with insurance purchasers about the benefits, terms and conditions of insurance contracts; to offer advice concerning the substantive benefits of particular insurance contracts; to sell insurance; and to obtain insurance for purchasers. The role of the producer in any particular transaction typically involves one or more of these activities.

Compensation will be paid to the producer, based on the insurance contract the producer sells. Depending on the insurer(s) and insurance contract(s) the purchaser selects, compensation will be paid by the insurer(s) selling the insurance contract or by another third party. Such compensation may vary depending on a number of factors, including the insurance contract(s) and the insurer(s) the purchaser selects. In some cases, other factors such as the volume of business a producer provides to an insurer or the profitability of insurance contracts a producer provides to an insurer also may affect compensation.

The insurance purchaser may obtain information about compensation expected to be received by the producer based in whole or in part on the sale of insurance to the purchaser, and (if applicable) compensation expected to be received based in whole or in part on any alternative quotes presented to the purchaser by the producer, by requesting such information from the producer.





Certificates / Evidence of Insurance A certificate is issued as a matter of information only and confers no rights upon the certificate holder. The certificate does not affirmatively or negatively amend, extend or alter the coverage afforded by a policy. Nor does it constitute a contract between the issuing insurer(s), authorized representative, producer or certificate holder. You may have signed contracts, leases or other agreements requiring you to provide this evidence. In those agreements, you may assume obligations and/or liability for others (Indemnification, Hold Harmless) and some of the obligations that are not covered by insurance. We recommend that you and your legal counsel review these documents. In addition to providing a certificate of insurance, you may be required to name your client or customer on your policy as an additional insured. This is only possible with permission of the insurance company, added by endorsement and, in some cases, an additional premium. By naming the certificate holder as additional insured, there are consequences to your risks and insurance policy including:

• Your policy limits are now shared with other entities; their claims involvement may reduce or exhaust your aggregate limit. • Your policy may provide higher limits than required by contract; your full limits can be exposed to the additional insured. • There may be conflicts in defense when your insurer has to defend both you and the additional insured.





Changes and Developments It is important that we be advised of any changes in your operations, which may have a bearing on the validity and/or adequacy of your insurance. The types of changes that concern us include, but are not limited to, those listed below:

Changes in any operations such as expansion to another states, new products, or new applications of existing products. Travel to any state not previously disclosed. Mergers and/or acquisition of new companies and any change in business ownership, including percentages. Any newly assumed contractual liability, granting of indemnities or hold harmless agreements. Any changes in existing premises including vacancy, whether temporary or permanent, alterations, demolition, etc. Also, any new premises either

purchased, constructed or occupied Circumstances which may require an increased liability insurance limit. Any changes in fire or theft protection such as the installation of or disconnection of sprinkler systems, burglar alarms, etc. This includes any

alterations to the system. Immediate notification of any changes to a scheduled of equipment, property, vehicles, electronic data processing, etc. Property of yours that is in transit, unless previously discussed and/or currently insured.

Please keep your Alliant representative(s) informed so they can assist you in making the right decisions regarding your insurance needs.





Request to Bind Coverage Washington State Transit Insurance Pool

We have reviewed the proposal and agree to the terms and conditions of the coverages presented. We are requesting coverage to be bound as outlined by coverage line below: Coverage Effective Date Auto Physical Damage July 01, 2015

______________________________________________ Signature of Authorized Insurance Representative ______________ Date

This proposal does not constitute a binder of insurance. Binding is subject to final carrier approval. The actual terms and conditions of the policy will prevail.


Alliant Property Insurance Programs (APIP) 2015-2016 Proposal


Alliant Insurance Services, Inc. License No. 0C36861

Brian White Vice President

Lilian Vanvieldt Senior Vice President

Kortney K. Bolton Assistant Account Manager

SPECIALTY GROUP

ALLIANT PROPERTY INSURANCE PROGRAM (APIP)

Page 1 of 6

July 1, 2015 – July 1, 2016 Washington State Transit Insurance Pool

EXECUTIVE SUMMARY

We are pleased to provide you with the 2015–2016 Alliant Property Insurance Program (APIP) attached renewal material. The property market has been in a soft cycle for the last year with underwriters willing to give decreases based on the lack of catastrophe losses worldwide, and record capacity and surplus in the marketplace. Sadly, while physical and human catastrophes abound, in recent years most of these have occurred in regions of the world that are not significantly insured. Therefore, as we enter the 2015/16 renewal, most insureds will see rate decreases. For those insureds, however that have experienced significant or attritional loss history, rates may increase. In keeping with the programs’ general history, we expect rates to remain below what can be achieved in the market for similar coverage. The primary $2.5M layer will continue to be placed with our long-term partner, Lexington, A.M. Best Rated A XV, and Lexington will also continue to provide the majority of capacity in the $22.5M x/s $2.5M layer, with Lloyd’s of London, A.M. Best Rated A XV, as its quota-share partner. Excess limits up to $1,000,000,000 will be placed with London, Bermudian, European and U.S Domestic markets, all A.M. Best Rated at least of A- VII. Members should note several key highlights for this year’s renewal:

Boiler & Machinery for participating members of the APIP Boiler Program maintained

Cyber (Privacy Liability) Coverage for both 1st and 3rd parties from the Beazley Syndicate at Lloyd’s, Best Rated A XV, (for those members eligible) with some improvements in coverage as outlined on the following summary

Pollution Coverage for both 1st and 3rd parties from ACE – Illinois Union Insurance Company, Best Rated A++ XV, (for those members eligible) with some improvements in coverage as outlined on the following summary

Alliant Business Services (ABS) will continue to play a significant role not only in providing various types of loss control services, but also in providing appraisal services. For the 2015-2016 policy year property valuations will continue to be a key focus. As a reminder, it is underwriters’ intent to have all buildings with a scheduled value of $5,000,000 or more appraised once every five years. This service is included in the total annual cost. Members may also choose to have lower valued buildings appraised. The cost to have all or specific buildings appraised between $25,000 and $5,000,000 will be quoted at the time the request is made. The following table depicts key statistics relative to last year:

Year-over-Year Rate and Premium Comparison


14-15

(at 02/19/2015) 15-16 Variance

Total Insured Values: $ 461,593,020 $ 477,749,571 3.50%

Account Rate (per hundred dollars): 0.1237432 0.1197331 -3.24%

Earthquake TIV: $ 461,593,020 $ 477,749,571 3.50%

Earthquake Limit: $ 25,000,000 $ 25,000,000 0.00%

*Total Annual Cost: $ 571,189.84 $ 572,024.52 0.15% * TOTAL COST includes: all premiums (except Cyber Enhancement option, if purchased), underwriting fees, commissions, loss control expenses, program administration charges, and applicable taxes

Thank you for your continued support of APIP. We look forward to working with you this next year. Please let us know if you have any questions about your Renewal Proposal.

2015-2016 Alliant Property Insurance Program (APIP) Executive Summary Washington State Transit Insurance Pool


Page 2 of 6

Coverage 2014 - 2015 2015 - 2016 Pending

APIP Coverage Documents

All references to “Member(s)/Entity(ies)” or where the word “Member” is referenced and not directly associated to a JPA or Pool

The word “Named Insured” or “Named Insured(s)” has replaced the words “Member(s)/Entity(ies)” or where the word “Member” is referenced throughout all APIP coverage documents and is not associated to a JPA or Pool

Clarification

Specific Limits of Liability and Individual Member Terms and Conditions

Specific Limits of Liability and Individual Member Terms and Conditions

To the extent there exists any discrepancy between the limits and/or sublimits described below and the Certificates of Insurance or Insurance policies, the Policies shall control. We recommend that you carefully review the Certificates or Policies for a complete list of limits and sublimits.

Limits of Liability To the extent there exists any discrepancy between the limits and/or sub-limits described below and the Declaration Page or Insurance policies, the Declaration Page or Policies shall control.

Clarification

All Risk Limit of Liability

Per Occurrence: all Perils, Coverages (subject to policy exclusions) and Insureds/Members combined, subject to the following per occurrence and/or aggregate sub-limits as noted

Per Occurrence: all Perils, Coverages (subject to policy exclusions) and all Named Insureds (as defined in the policy) combined, per Declaration, regardless of the number of Named Insureds, coverages, extensions of coverage, or perils insured, subject to the following per occurrence and/or aggregate sub-limits as noted below.

Clarification

Sub-Limits of Liability as respects: Boiler Explosion and Machinery Breakdown

For members that purchase coverage see schedule on file with Alliant Insurance Services Boiler Explosion and Machinery Breakdown, (for those Named Insured’s that purchase this optional dedicated coverage) as respects Combined Property Damage and Business Interruption/Extra Expense (Including Bond Revenue Interest Payments where Values Reported and excluding Business Interruption for power generating facilities unless otherwise specified). Limit includes loss adjustment agreement and electronic computer or electronic data processing equipment with the following sub-limits

Boiler Explosion and Machinery Breakdown, (for those Named Insureds that purchase this optional dedicated coverage) as respects Combined Property Damage and Business Interruption/Extra Expense (Including Bond Revenue Interest Payments where Values Reported and excluding Business Interruption for power generating facilities unless otherwise specified). Limit includes loss adjustment agreement and electronic computer or electronic data processing equipment with the following sub-limits

Clarification

Primary Terrorism

USD 100,000,000 per Member /Entity Per Occurrence subject to USD200,000,000 Annual Aggregate of Declarations 1-14, 18-21, 25-30 and 32- 34 combined as respects Property Damage, Business Interruption, Rental Income and Extra Expense Combined for Terrorism (Primary Layer)

USD 100,000,000 per Named Insured Per Occurrence subject to USD200,000,000 Annual Aggregate of Declarations 1-14, 18-22, 25-30 and 32- 34 combined as respects Property Damage, Business Interruption, Rental Income and Extra Expense Combined for Terrorism (Primary Layer)

Clarification



Page 3 of 6


Excess Terrorism

Per Occurrence, All Members combined in Declarations 1-9, 11, 12, 13, 14, 19, 20, 21, 26, 27, 28, 30, 32, 33 and 34 for Terrorism (Excess Layer) subject to; Annual Aggregate shared by all Members/Entities Insureds combined in Declarations 1-9, 11-14, 18-22, 25-30 and 32-34, as respects Property Damage, Business Interruption, Rental Income and Extra Expense combined for Terrorism (Excess Layer)

Per Occurrence, All Named Insureds combined in Declarations 1-9, 11-14, 18-22, 25-30 and 32-34 for Terrorism (Excess Layer) subject to; Annual Aggregate shared by all Named Insureds combined in Declarations 1-9, 11-14, 18-22, 25-30 and 32-34, as respects Property Damage, Business Interruption, Rental Income and Extra Expense combined for Terrorism (Excess Layer)

Clarification

Deductible as respects: Basic All Risk

‘Basic’ All Perils and Coverages, except for those referenced in Specified Perils or Coverages Deductible(s) and Special Terms & Conditions as set forth below:

Unspecified “Basic” or “All Risk” Perils and Coverages Deductible (Meaning for perils not referenced in the “Specified Perils or Coverages Deductible(s)” or “Special Terms & Conditions” as set forth below):

Clarification

Deductible as respects: JPA / Pool Maintenance Deductible

Maintenance Deductible after Annual Aggregate Deductible is reached. Maintenance deductible does not apply to those items listed in the Deductibles for Specific Perils and Coverages or Special Terms section below

Pool Maintenance Deductible applicable to each occurrence after the Annual Aggregate Deductible is reached. The specific deductibles for Flood, Earthquake and Wind will always apply to losses caused by those perils regardless if it is greater or less than the Pool Maintenance Deductible. The maintenance deductible does not apply to those items listed in the Deductibles for Specific Perils and Coverages or Special Terms section below if those perils did not erode the annual aggregate deductible.

Clarification

Deductible as respects: All Risk Deductible (Other):

$10,000 Minimum subject to $100,000 Maximum per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractors Equipment Per Occurrence and Annual aggregate and shared by all members of this Declaration for the peril of Earthquake for members who do not purchase dedicated Earthquake limits

$10,000 Per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractors Equipment subject to $100,000 Maximum Per Occurrence, Per Named Insured for the peril of Earthquake for Named Insured(s) who do not purchase dedicated Earthquake limits

Enhancement

Deductible as respects: All Risk Deductible (Other):

$10,000 Minimum subject to $100,000 Maximum per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractor's Equipment Per Occurrence and Annual Aggregate and shared by all members of this Declaration for the peril of Flood for members who do not purchase dedicated Flood limits

$10,000 Per Vehicle or Item for Licensed Vehicles, Unlicensed Vehicles and Contractor's Equipment subject to $100,000 Maximum Per Occurrence, Per Named Insured for the peril of Flood for Named Insured(s) who do not purchase dedicated Flood limits

Enhancement

Deductibles as respects: All Risk Deductible (Other):

2.5% of Annual Tax Value per Location for Tax Interruption

2.5% of Annual Tax Revenue Value per Location for Tax Interruption Clarification



Page 4 of 6


APIP Reinsurance Named Insured coverage wording

Not previously listed on Named Insured’s specific coverage documents

Coverage wording added under “Special Terms”: As a Reinsurance placement in no circumstance will the coverages, terms, conditions, limits, sub-limits, deductibles, exclusions or endorsements be extended or broadened by the Named Insured’s Memorandum of Coverage or underlying insurance documents.

Clarification

Master Policy Form Wording

Policy Term July 1, 2014 to July 1, 2015 July 1, 2015 to July 1, 2016 Renewal item

PEPIP Master Policy Form

All references to “Member(s)/Entity(ies)” or where the word “Member” is referenced and not directly associated to a JPA or Pool

The word “Named Insured” or “Named Insured(s)” has replaced the words “Member(s)/Entity(ies)” or where the word “Member” is referenced and not associated to a JPA or Pool throughout the Master Policy Form 11

Clarification

Section I, Item B. Named Insured

As per Declaration page and its member(s), entity(ies), agency(ies), organization(s), enterprise(s) and/or individual(s) for whom the Named Insured is required to provide coverage, as so named in the “Named Insured – Member Schedule” attached to this policy and/or on file with Alliant Insurance Services, Inc., as their interests may appear which now exist or which hereafter may be created or acquired and which are owned, financially controlled or actively managed by the herein named interest, all jointly, severally or in any combination of their interests, for account of whom it may concern.

Per Declaration page all Named Insureds listed in the Declaration Schedule Addendum attached to this policy.

Member(s), entity(ies), agency(ies), organization(s), enterprise(s) and/or individual(s) for whom the Named Insured is required or has agreed to provide coverage, or as so named in the “Named Insured Schedule” on file with Alliant Insurance Services, Inc., as their interests may appear which now exist or which hereafter may be created or acquired and which are owned, financially controlled or actively managed by the herein named interest, all jointly, severally or in any combination of their interests, for account of whom it may concern, are covered within the limits Terms and Conditions provided to the individual Named Insured’s limits.

Clarification

Section I, Item C. Mailing Address of Insured

C. Mailing Address of Insured C. Mailing Address of Named Insured Clarification

Section I, Item E. Limits of Liability

1. SPECIFIC LIMITS OF LIABILITY

The Specific Limits of Liability as described in the Declaration Page apply per occurrence unless indicated otherwise.

1. LIMITS OF LIABILITY

The Specific Limits of Liability as described in the Declaration Page apply per occurrence unless indicated otherwise.

Clarification



Page 5 of 6


Section II, Item B. 22. Terrorism Coverage

a. USD 100,000,000 per member(s) / entity(ies) of declaration number 1-14, 18- 21, 25- 30 and 32-34 per occurrence subject to USD200,000,000 in the annual aggregate which shared by all member(s) / entity(ies) of declaration numbers 1-14, 18-21, 25-30 and 32- 34 combined; and

a. USD 100,000,000 per Named Insured(s) of Declaration number 1-14, 18- 22, 25- 30 and 32-34 per occurrence subject to USD200,000,000 in the annual aggregate which shared by all Named Insured(s) of Declaration numbers 1-14, 18-22, 25-30 and 32- 34 combined; and

Clarification

Section II, Item C. 6. Property Not Covered

Power transmission lines, feeder lines and underground pipes more than 1,000 feet from the premises of the Insured unless specifically approved by the Company.

Removed “Underground pipes” from #6 Added #7: Underground pipes more than 1,000 feet from the premises of the Insured unless specifically approved by the Company.

Clarification


7. Unscheduled tunnels, bridges, dams, catwalks (except those not for public use), roadways, highways, streets, sidewalks, culverts, streetlights, and traffic signals, excess of the sub-limit terms provided on the Declaration Page.

8. Unscheduled tunnels, bridges, dams, catwalks (except those not for public use), roadways, highways, streets, sidewalks, culverts, streetlights, and traffic signals, excess of the sub-limit terms provided on the Declaration Page.

Clarification


8. Offshore property, oilrigs, underground mines, caverns and their contents. Railroad track is excluded unless values have been reported by the Insured.

9. Offshore property, oilrigs, underground mines, caverns and their contents. Railroad track is excluded unless values have been reported by the Insured.

Clarification

Section IV, Item B. 19. Exclusions

Fines, penalties or cost incurred or sustained by the Insured or imposed on the Insured at the order of any Government Agency, Court of other Authority, in connection with any kind or description of environmental impairment including seepage or pollution or contamination from any cause.

Fines, penalties or cost incurred or sustained by the Insured or imposed on the Insured at the order of any Government Agency, Court or other Authority, in connection with any kind or description of environmental impairment including seepage or pollution or contamination from any cause.

Clarification

Section IV, Item D. Territorial Limits

This Policy insures Real and Personal Property within the United States. Personal Property is extended to Worldwide coverage. The coverage provided by this clause for Personal Property is sublimited to USD as per Declaration Page.

This Policy insures Real and Personal Property within the United States of America. Personal Property is extended to Worldwide coverage. The coverage provided by this clause for Personal Property is sub-limited to USD as per Declaration Page.

Clarification

Section IV, Item M. Subrogation

This Policy shall not be prejudiced by agreement made by the Insured releasing or waiving the Insured’s rights to recovery against third parties responsible for the loss if made before the loss has occurred. Notwithstanding the above wording, the insured has the right to enter into an agreement that releases or waives the Insured’s right to recovery against third parties responsible for the loss if made before the loss occurred.

Notwithstanding the above wording, the insured has the right to enter into an agreement that releases or waives the Insured’s right to recovery against third parties responsible for the loss if made before the loss occurred.

Clarification



Page 6 of 6


Section IV, Item AE. Service of Suit Clause (USA) Applicable to Excess Carriers

Messre Mendes and Mount of 750 Seventh Avenue, New York NY 10019 6829 (applicable to all markets except as noted below)

FLWA Service Corp, c/o Foley and Lardner LLP, 555 California Street, Suite 1700, San Francisco, CA 94104-1520 (applicable to all markets except as noted below)

Update

Section IV, Item 6 Tier I Windstorm Counties

The following items in the next column are not currently listed in the Master Policy Form Wording 10

State Tier I Counties, Parishes or Independent Cities

Clarification Florida All Counties

Hawaii All Counties Louisiana Assumption

Virginia Charles City, New Kent, Prince George and Sussex

Hospital All Risk Property Program

Specific policy endorsements provided for Hospital All Risk Property Program Declarations

Hospital All Risk Property Program Master Policy Form 11 created Enhancement

Pollution Liability Coverage A Summary of Pollution Liability is included with the Coverage Proposal Enhancement

ALLIANT INSURANCE SERVICES, INC.

ALLIANT PROPERTY INSURANCE PROGRAM (APIP) PROPERTY PROPOSAL

Page 1 of 9

TYPE OF INSURANCE: Insurance Reinsurance

NAMED INSURED: Washington State Transit Insurance Pool DECLARATION: 11-JPA/Pools POLICY PERIOD: July 1, 2015 to July 1, 2016

COMPANIES: See Attached List of Companies TOTAL INSURED VALUES:

$ 477,749,571 as of June 10, 2015

ALL RISK COVERAGES & LIMITS:

$ 1,000,000,000 Per Occurrence: all Perils, Coverages (subject to policy

exclusions) and all Named Insureds (as defined in the policy) combined, per Declaration, regardless of the number of Named Insureds, coverages, extensions of coverage, or perils insured, subject to the following per occurrence and/or aggregate sub-limits as noted below.

$ 50,000,000 Flood Limit - Per Occurrence and in the Annual Aggregate (for

those Named Insured(s) that purchase this optional dedicated coverage)

$ 10,000,000 Per Occurrence and in the Annual Aggregate for all locations in

Flood Zones A & V (inclusive of all 100 year exposures). This Sub-limit does not increase the specific flood limit of liability for those Named Insured(s) that purchase this optional dedicated coverage.

$ 25,000,000 Earthquake Shock - Per Occurrence and in the Annual

Aggregate (for those Named Insured(s) that purchase this optional dedicated coverage)

$ 100,000,000 Combined Business Interruption, Rental Income and Tax

Revenue Interruption and Tuition Income (and related fees). However, if specific values for such coverage have not been reported as part of the Named Insured's schedule of values held on file with Alliant Insurance Services, Inc., this sub-limit amount is limited to $500,000 per Named Insured subject to maximum of $2,500,000 Per Occurrence for Business Interruption, Rental Income and Tuition Income combined, and $5,000,000 per occurrence for Tax Revenue Interruption. Coverage for power generating plants is excluded, unless otherwise specified.

$ 50,000,000 Extra Expense

2015-2016 Alliant Property Insurance Program (APIP) Property Proposal Washington State Transit Insurance Pool

Page 2 of 9

$ 25,000,000 Miscellaneous Unnamed Locations for existing Named

Insured's Excluding Earthquake coverage for Alaska and California Named Insureds. If Flood coverage is purchased for all scheduled locations, this extension will extend to include Flood coverage for any location not situated in Flood Zones A or V.

180 Days Extended Period of Indemnity See Policy Provisions $25,000,000 Automatic Acquisition up to $100,000,000 or a

Named Insured's Policy Limit of Liability if less than $100,000,000 for 90 days excluding licensed vehicles for which a sub-limit of $10,000,000 applies per policy Automatic Acquisition and Reporting Condition. Additionally a sub-limit of $2,500,000 applies for Tier 1 Wind Counties, Parishes and Independent Cities for 60 days for the states of Virginia, North Carolina, South Carolina, Georgia, Alabama, Mississippi, Louisiana, Texas and/or situated anywhere within the states of Florida and Hawaii. The peril of EQ is excluded for the states of Alaska and California. If Flood coverage is purchased for all scheduled locations, this extension will extend to include Flood coverage for any location not situated in Flood Zones A or V.

$ 1,000,000 Unscheduled Landscaping, tees, sand traps, greens and athletic

fields and further subject to $25,000 / 25 gallon maximum per item

$ 5,000,000 or 110% of the scheduled values, whichever is greater, for

Scheduled Landscaping, tees, sand traps, greens and athletic fields and further subject to $25,000 / 25 gallon maximum per item.

$ 50,000,000 Errors & Omissions - This extension does not increase any

more specific limit stated elsewhere in this policy or Declarations.

$ 25,000,000 Course of Construction and Additions (including new) for

projects with completed values not exceeding the sub-limit shown. Projects valued between $25,000,001 and $50,000,000 can be added for an additional premium with underwriting approval

$ 2,500,000 Money & Securities for named perils only as referenced within

the policy $ 2,500,000 Unscheduled Fine Arts $ 250,000 Accidental Contamination per occurrence and annual aggregate

per Named Insured with $500,000 annual aggregate for all Named Insureds per Declaration


Page 3 of 9

$ 2,000,000 Unscheduled Tunnels, Bridges, Dams, Catwalks (except those

not for public use), Roadways, Highways, Streets, Sidewalks, Culverts, Street Lights and Traffic Signals unless a specific value has been declared (excluding coverage for the peril of Earthquake Shock, and excluding Federal Emergency Management Agency (FEMA) and/or Office of Emergency Services (OES) declared disasters, providing said declaration provides funding for repairs)

$ 25,000,000 Increased Cost of Construction due to the enforcement of

building codes/ ordinance or law (includes All Risk and Boiler & Machinery)

$ 25,000,000 Transit $ 2,500,000 Unscheduled Animals; not to exceed $50,000 per Animal, per

Occurrence $ 2,500,000 Unscheduled Watercraft up to 27 feet Not Covered Per Occurrence for Off Premises Vehicle Physical Damage $ 25,000,000 Off Premises Services Interruption including Extra Expense

resulting from a covered peril at non-owned/operated locations $ 5,000,000 Per Occurrence Per Named Insured subject to an Annual

Aggregate of $10,000,000 for Earthquake Shock on Licensed Vehicles, Unlicensed Vehicles, Contractor's Equipment and Fine Arts combined for all Named Insured(s) in this Declaration combined that do not purchase optional dedicated Earthquake Shock coverage, and/or where specific values for such items are not covered for optional dedicated Earthquake Shock coverage as part of the Named Insured's schedule of values held on file with Alliant Insurance Services, Inc.

$ 5,000,000 Per Occurrence Per Named Insured subject to an Annual

Aggregate of $10,000,000 for Flood on Licensed Vehicles, Unlicensed Vehicles, Contractor's Equipment and Fine Arts combined for all Named Insured(s) in this Declaration combined that do not purchase optional dedicated Flood coverage, and/or where specific values for such items are not covered for optional dedicated Flood coverage as part of the Named Insured's schedule of values held on file with Alliant Insurance Services, Inc.

$ 3,000,000 Contingent Business Interruption, Contingent Extra Expense,

Contingent Rental Values and Contingent Tuition Income separately

$ 500,000 Jewelry, Furs, Precious Metals and Precious Stones Separately $ 1,000,000 Claims Preparation Expenses $ 50,000,000 Expediting Expenses $ 1,000,000 Personal Property Outside of the USA


Page 4 of 9

$ 100,000,000 Per Named Insured Per Occurrence subject to $200,000,000 Annual Aggregate of Declarations 1-14, 18-22, 25-30 and 32-34 combined as respects Property Damage, Business Interruption, Rental Income and Extra Expense Combined for Terrorism (Primary Layer)

$ 300,000,000 Per Named Insured for Terrorism (Excess Layer) subject to; $ 800,000,000 Per Occurrence, All Named Insureds combined in Declarations

1-9, 11-14, 18-22, 25-30 and 32-34 for Terrorism (Excess Layer) subject to;

$ 800,000,000 Annual Aggregate shared by all Named Insureds combined in

Declarations 1-9, 11-14, 18-22, 25-30 and 32-34, as respects Property Damage, Business Interruption, Rental Income and Extra Expense combined for Terrorism (Excess Layer)

Not Covered Per Occurrence Per Declaration Upgrade to Green Coverage

subject to the lesser of, the cost of upgrade, an additional 25% of the applicable limit of liability shown in the schedule of values or this sub limit.

Included Information Security & Privacy Insurance with Electronic

Media Liability Coverage. See Cyber Coverage Summary for details of coverage terms, limits and deductibles

VALUATION: • Repair or Replacement Cost

• Actual Loss Sustained for Time Element Coverages • Contractor’s Equipment / either Replacement Cost or Actual Cash Value (ACV) as

declared by each member. If not declared, valuation will default to Actual Cash Value (ACV)

EXCLUSIONS (Including but not limited to):

• Seepage & Contamination • Cost of Clean-up for Pollution • Mold

Deductibles: If two or more deductible amounts provided in the Declaration Page apply

for a single occurrence the total to be deducted shall not exceed the largest per occurrence deductible amount applicable. (The Deductible amounts set forth below apply Per Occurrence unless indicated otherwise).

“ALL RISK” DEDUCTIBLE:

$ 250,000 except 400,000 for CNG locations Per Occurrence, which to

apply in the event a more specific deductible is not applicable to a loss

DEDUCTIBLES FOR SPECIFIC PERILS AND COVERAGES:

$ 500,000 All Flood Zones Per Occurrence excluding Flood Zones A & V

$ 500,000 Per Occurrence for Flood Zones A & V (inclusive of all 100

year exposures) 5% subject 500,000 minimum Earthquake Shock: If the stated deductible is a flat

dollar amount, the deductible will apply on a Per Occurrence basis, unless otherwise stated. If the stated deductible is on a percentage basis, the deductible will apply Per Occurrence on a


Page 5 of 9

Per Unit basis, as defined in the policy form, subject to the stated minimum.

$ 1,000 Per Occurrence for Specially Trained Animals $ 500,000 Per Occurrence for Unscheduled Tunnels, Bridges, Dams,

Catwalks (except those not for public use), Roadways, Highways, Streets, Sidewalks, Culverts, Street Lights and Traffic Signals unless a specific value has been declared (excluding coverage for the peril of Earthquake Shock, and excluding Federal Emergency Management Agency (FEMA) and/or Office of Emergency Services (OES) declared disasters)

$ 10,000 Per Vehicle or Item for Licensed Vehicles,

Unlicensed Vehicles and Contractor’s Equipment subject to $100,000 Maximum Per Occurrence, Per Named Insured for the peril of Earthquake for Named Insured(s) who do not purchase dedicated Earthquake limits

$ 50,000 Per Occurrence per Named Insured for this Declaration for

Fine Arts for the peril of Earthquake for Named Insured(s) who do not purchase dedicated Earthquake limits

$ 10,000 Per Vehicle or Item for Licensed Vehicles,

Unlicensed Vehicles and Contractor's Equipment subject to $100,000 Maximum Per Occurrence, Per Named Insured for the peril of Flood for Named Insured(s) who do not purchase dedicated Flood limits

$ 50,000 Per Occurrence per Named Insured for this Declaration for Fine

Arts for the peril of Flood for Named Insured(s) who do not purchase dedicated Flood limits

24 Hour Waiting

Period for Service Interruption for All Perils and Coverages

2.5% of Annual Tax

Revenue Value per Location for Tax Interruption

Not Covered Per Occurrence for Off Premises Vehicle Physical Damage. If

Off-Premises coverage is included/purchased, the stated deductible will apply to vehicle physical damage both on and off-premises on a Per Occurrence basis, unless otherwise stated. If Off-Premises coverage is not included, On-Premises/In-Yard coverage is subject to the All Risk (Basic) deductible.

$ 250000 Per Occurrence for Contractor's Equipment $ 250,000 except 400,000 for CNG locations Per Occurrence for Primary

Terrorism $ 500,000 Per Occurrence for Excess Terrorism (Applies only if the

Primary Terrorism Limit is exhausted) Included Information Security & Privacy Insurance with Electronic

Media Liability Coverage. See Cyber Coverage Summary for details of coverage terms, limits and deductibles. (Cyber Liability)


Page 6 of 9

TERMS & CONDITIONS:

25% Minimum Earned Premium and cancellations subject to 10% penalty

Except Cyber Liability Premium is 30% Earned at Inception

NOTICE OF CANCELLATION:

90 Days except 10 Days for non-payment of premium

Annual Cost* Total Property Premium:

$ 545,612.00

Excess Boiler: $ 5,889.00 ABS Fee: $ 8,942.00 SLT&F’s (Estimate) $ 11,581.52 Broker Fee: $ 0.00 TOTAL COST †: (Including Taxes and Fees)

$ 572,024.52

*Premiums are based on valid selectable options and the TIV’s above. Changes in TIV’s will require a premium adjustment. † TOTAL COST includes: premiums, underwriting fees, commissions, loss control expenses, program administration

charges, and applicable taxes (excluding the Cyber Enhancement premium - should you have elected to purchase this coverage)

IMPORTANT NOTICE: THE NONADMITTED & REINSURANCE REFORM ACT (NRRA) WENT INTO EFFECT ON JULY 21, 2011. ACCORDINGLY, SURPLUS LINES TAX RATES AND REGULATIONS ARE SUBJECT TO CHANGE WHICH COULD RESULT IN AN INCREASE OR DECREASE OF THE TOTAL SURPLUS LINES TAXES AND/OR FEES OWED ON THIS PLACEMENT. IF A CHANGE IS REQUIRED, WE WILL PROMPTLY NOTIFY YOU. ANY ADDITIONAL TAXES AND/OR FEES OWED MUST BE PROMPTLY REMITTED TO ALLIANT INSURANCE SERVICES, INC. IMPORTANT NOTICE: THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) REQUIRES THE NOTIFICATION OF CERTAIN FINANCIAL ACCOUNTS TO THE UNITED STATES INTERNAL REVENUE SERVICE. ALLIANT DOES NOT PROVIDE TAX ADVICE SO PLEASE CONTACT YOUR TAX CONSULTANT FOR YOUR OBLIGATIONS REGARDING FATCA. PROPOSAL VALID UNTIL:

July 1, 2015


Page 7 of 9

BROKER: ALLIANT INSURANCE SERVICES, INC. License No. 0C36861 Brian White Vice President Lilian Vanvieldt Senior Vice President Rick Steddom Vice President Kortney K. Bolton Assistant Account Manager

NOTES:

• Major pending and approved changes to the APIP Program are described in the Executive Summary.

• Change in Total Insurable Values will result in adjustment in premium

• Some coverage, sub-limits, terms and conditions could change until negotiations with the insurance carriers have been finalized

• Coverage outlined in this Proposal is subject to the terms and conditions set forth in the policy. Please refer to Policy for specific terms, conditions and exclusions


Page 8 of 9

This proposal of insurance is provided as a matter of convenience and information only. All information included in this proposal, including but not limited to personal and real property values, locations, operations, products, data, automobile schedules, financial data and loss experience, is based on facts and representations supplied to Alliant Insurance Services, Inc. by you. This proposal does not reflect any independent study or investigation by Alliant Insurance Services, Inc. or its agents and employees.

Please be advised that this proposal is also expressly conditioned on there being no material change in the risk between the date of this proposal and the inception date of the proposed policy (including the occurrence of any claim or notice of circumstances that may give rise to a claim under any policy which the policy being proposed is a renewal or replacement). In the event of such change of risk, the insurer may, at its sole discretion, modify, or withdraw this proposal whether or not this offer has already been accepted.





Our goal is to procure insurance for you with underwriters possessing the financial strength to perform. Alliant does not, however, guarantee the solvency of any underwriters with which insurance or reinsurance is placed and maintains no responsibility for any loss or damage arising from the financial failure or insolvency of any insurer. We encourage you to review the publicly available information collected to enable you to make an informed decision to accept or reject a particular underwriter. To learn more about companies doing business in your state, visit the Department of Insurance website for that state.

NY Regulation 194 Disclosure and General Broker Compensation Disclosure Alliant Insurance Services, Inc. is an insurance producer licensed by the State of New York and other States. Insurance producers are authorized by their license to confer with insurance purchasers about the benefits, terms and conditions of insurance contracts; to offer advice concerning the substantive benefits of particular insurance contracts; to sell insurance; and to obtain insurance for purchasers. The role of the producer in any particular transaction typically involves one or more of these activities. Compensation will be paid to the producer, based on the insurance contract the producer sells. Depending on the insurer(s) and insurance contract(s) the purchaser selects, compensation will be paid by the insurer(s) selling the insurance contract or by another third party. Such compensation may vary depending on a number of factors, including the insurance contract(s) and the insurer(s) the purchaser selects. In some cases, other factors such as the volume of business a producer provides to an insurer or the profitability of insurance contracts a producer provides to an insurer also may affect compensation. The insurance purchaser may obtain information about compensation expected to be received by the producer based in whole or in part on the sale of insurance to the purchaser, and (if applicable) compensation expected to be received based in whole or in part on any alternative quotes presented to the purchaser by the producer, by requesting such information from the





Page 9 of 9

producer.

ALLIANT INSURANCE SERVICES, INC. ALLIANT PROPERTY INSURANCE PROGRAM (APIP)

BOILER & MACHINERY PROPOSAL

Page 1 of 4

NAMED INSURED: Washington State Transit Insurance Pool

POLICY PERIOD: July 1, 2015 to July 1, 2016

COMPANIES: See Attached List of Companies TOTAL INSURED VALUES: $ 477,749,571 as of June 5, 2015 STATUS/RATING: See Attached List of Companies

COVERAGES & LIMITS: $ 100,000,000 Boiler Explosion and Machinery Breakdown, (for those

Named Insureds that purchase this optional dedicated coverage) as respects Combined Property Damage and Business Interruption/Extra Expense (Including Bond Revenue Interest Payments where Values Reported and excluding Business Interruption for power generating facilities unless otherwise specified). Limit includes loss adjustment agreement and electronic computer or electronic data processing equipment with the following sub-limits:

Included Jurisdictional and Inspections $ 10,000,000 Per Occurrence for Service/Utility/Off Premises Power

Interruption Included Per Occurrence for Consequential Damage/Perishable

Goods/Spoilage $ 10,000,000 Per Occurrence for Electronic Data Processing Media

and Data Restoration $ 2,000,000 Per Occurrence, Per Named Insured and in the Annual

Aggregate per Declaration for Earthquake Resultant Damage for Members who purchase Dedicated Earthquake Coverage

$ 10,000,000 Per Occurrence for Hazardous Substances/

Pollutants/Decontamination Included Per Occurrence for Machine or Apparatus used for

Research, Diagnosis, Medication, Surgical, Therapeutic, Dental or Pathological Purposes

2015-2016 Alliant Property Insurance Program (APIP) Optional Boiler & Machinery Proposal Washington State Transit Insurance Pool

Page 2 of 4

NEWLY ACQUIRED LOCATIONS:

$ 25,000,000 Automatic Acquisition for Boiler & Machinery values at

newly acquired locations. Values greater than $25,000,000 or Power Generating Facilities must be reported within 90 days and must have prior underwriting approval prior to binding

VALUATION: Repair or Replacement except Actual Loss sustained for all Time Element

coverages EXCLUSIONS (Including but not limited to):

• Testing • Explosion, except for steam or centrifugal explosion • Explosion of gas or unconsumed fuel from furnace of the boiler

OBJECTS EXCLUDED: (Including but not limited to):

• Insulating or refractory material • Buried Vessels or Piping • Furnace, Oven, Stove, Incinerator, Pot Kiln

NOTICE OF CANCELLATION:

90 days except 10 days for non-payment of premium

DEDUCTIBLES: $ 250,000 Except as shown for Specific Objects or Perils

$ 250,000 Electronic Data Processing Media $ 250,000 Consequential Damage $ 250,000 Objects over 200 hp, 1,000 KW/KVA/Amps or Boilers

over 5,000 square feet of heating surface $ 250,000 Objects over 350 hp, 2,500 KW/KVA/Amps or Boilers



over 75,000 square feet of heating surface $ 350,000 Objects over 25,000 hp, 25,000 KW/KVA/Amps or

Boilers over 250,000 square feet of heating surface 10 per foot / $2,500 Minimum Deep Water Wells 24 Hours Business Interruption/Extra Expense Except as noted below 30 Days Business Interruption – Revenue Bond 24 Hour Waiting Period − Utility Interruption 5 x 100% of Daily Value − Business Interruption – All Objects over 750 hp or

10,000 KW/KVA/Amps or 10,000 Square feet Heating Surface 5 x 100% of Daily Value − Business Interruption – All Objects at Waste Water

Treatment Facilities and All Utilities


Page 3 of 4

Annual Cost* COST: Cost is included on Property Proposal

IMPORTANT NOTICE: THE NONADMITTED & REINSURANCE REFORM ACT (NRRA) WENT INTO EFFECT ON JULY 21, 2011. ACCORDINGLY, SURPLUS LINES TAX RATES AND REGULATIONS ARE SUBJECT TO CHANGE WHICH COULD RESULT IN AN INCREASE OR DECREASE OF THE TOTAL SURPLUS LINES TAXES AND/OR FEES OWED ON THIS PLACEMENT. IF A CHANGE IS REQUIRED, WE WILL PROMPTLY NOTIFY YOU. ANY ADDITIONAL TAXES AND/OR FEES OWED MUST BE PROMPTLY REMITTED TO ALLIANT INSURANCE SERVICES, INC. IMPORTANT NOTICE: THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) REQUIRES THE NOTIFICATION OF CERTAIN FINANCIAL ACCOUNTS TO THE UNITED STATES INTERNAL REVENUE SERVICE. ALLIANT DOES NOT PROVIDE TAX ADVICE SO PLEASE CONTACT YOUR TAX CONSULTANT FOR YOUR OBLIGATIONS REGARDING FATCA.

BROKER: ALLIANT INSURANCE SERVICES, INC. License No. 0C36861

Brian White Vice President

Lilian Vanvieldt Senior Vice President

Rick Steddom Vice President

Kortney K. Bolton Assistant Account Manager

NOTES:

• Major pending and approved changes to the APIP Program are described in the Executive Summary.

• Change in Total Insurable Values will result in adjustment in premium

• Some coverage, sublimits, terms and conditions could change until negotiations with the insurance carriers havebeen finalized

• Coverage outlined in this Proposal is subject to the terms and conditions set forth in the policy. Please refer toPolicy for specific terms, conditions and exclusions


Page 4 of 4

This proposal of insurance is provided as a matter of convenience and information only. All information included in this proposal, including but not limited to personal and real property values, locations, operations, products, data, automobile schedules, financial data and loss experience, is based on facts and representations supplied to Alliant Insurance Services, Inc. by you. This proposal does not reflect any independent study or investigation by Alliant Insurance Services, Inc. or its agents and employees.

Please be advised that this proposal is also expressly conditioned on there being no material change in the risk between the date of this proposal and the inception date of the proposed policy (including the occurrence of any claim or notice of circumstances that may give rise to a claim under any policy which the policy being proposed is a renewal or replacement). In the event of such change of risk, the insurer may, at its sole discretion, modify, or withdraw this proposal whether or not this offer has already been accepted.






NY Regulation 194 Disclosure and General Broker Compensation Disclosure Alliant Insurance Services, Inc. is an insurance producer licensed by the State of New York and other States. Insurance producers are authorized by their license to confer with insurance purchasers about the benefits, terms and conditions of insurance contracts; to offer advice concerning the substantive benefits of particular insurance contracts; to sell insurance; and to obtain insurance for purchasers. The role of the producer in any particular transaction typically involves one or more of these activities. Compensation will be paid to the producer, based on the insurance contract the producer sells. Depending on the insurer(s) and insurance contract(s) the purchaser selects, compensation will be paid by the insurer(s) selling the insurance contract or by another third party. Such compensation may vary depending on a number of factors, including the insurance contract(s) and the insurer(s) the purchaser selects. In some cases, other factors such as the volume of business a producer provides to an insurer or the profitability of insurance contracts a producer provides to an insurer also may affect compensation. The insurance purchaser may obtain information about compensation expected to be received by the producer based in whole or in part on the sale of insurance to the purchaser, and (if applicable) compensation expected to be received based in whole or in part on any alternative quotes presented to the purchaser by the producer, by requesting such information from the producer.




Alliant Property Insurance Program (APIP)

CYBER LIABILITY PROPOSAL

Page 1 of 7

TYPE OF COVERAGE:

PROGRAM: NAMED INSURED:

Information Security & Privacy Insurance with Electronic Media Liability Coverage

Alliant Property Insurance Program (APIP) inclusive of Public Entity Property Insurance Program (PEPIP), and Hospital All Risk Property Program (HARPP) Any member(s), entity(ies), agency(ies), organizations(s), enterprise(s) and/or individuals(s) attached to each Declaration insured as per schedule on file with Insurer.

DECLARATION: Various Declarations as on file with Insurer POLICY PERIOD: July 1, 2015 to July 1, 2016

TERRITORY:

WORLD-WIDE

RETROACTIVE DATE:

APIP/PEPIP For new members – the retro active date will be the date of addition July 1, 2015 For existing members included on the July 1, 2015/16 policy July 1, 2014 For existing members included on the July 1, 2014/15 policy July 1, 2013 For existing members included on the July 1, 2013/14 policy July 1, 2012 For existing members included on the July 1, 2012/13 policy July 1, 2011 For existing members included on the July 1, 2011/12 policy July 1, 2010 For existing members included on the July 1, 2010/11 policy HARPP For new members – the retro active date will be the date of addition July 1, 2009 For members endorsed onto the July 1, 2009/10 policy at a $500,000

limit except for those members who did not provide a ‘'No Known Losses Letter'’ then the retro date is the date that the member was added

July 1, 2010 For $1,500,000 excess $500,000 CSU July 1, 2008 California State University and CSU Auxiliary Organizations

COMPANIES: Lloyd’s of London - Beazley Syndicate:

Syndicates 2623 - 623 - 100%

2015-2016 Alliant Property Insurance Program (APIP) Cyber Liability Proposal

Page 2 of 7

COVERAGES & LIMITS: THIRD PARTY

LIABILITY Ai. $ 25,000,000 Annual Policy and Program Aggregate Limit of

Liability (subject to policy exclusions) for all Insured’s/Members combined (Aggregate for all coverage’s combined, including Claims Expenses), subject to the following sub-limits as noted.

Aii. $ 2,000,000 Annual Aggregate Limit of Liability for each

Insured/Member for Information Security & Privacy Liability. Each Member of a JPA will have a $2,000,000 Limit Each (Aggregate for all coverages combined, including Claim Expenses) but sublimited to:

B. $ 500,000 Annual Policy Aggregate Limit of Liability for each

Insured/Member Privacy Notification Costs coverage. Limit is $1,000,000 if Beazley vendor services are used.

C. $ 2,000,000 Annual Policy Aggregate Limit of Liability for each

Insured/Member for all Claims Expenses and Penalties for Regulatory Defense and Penalties

PCI Fines and Penalties coverage added with sub-

limit of $100,000. D. $ 2,000,000 Annual Policy Aggregate Limit of Liability for each

Insured/Member for all Damages and Claims Expenses for Website Media Content Liability (Occurrence Based)

FIRST PARTY

COMPUTER SECURITY

E. $ 2,000,000 Policy Aggregate Sublimit of Liability for each Insured/Member for Cyber Extortion Loss

F. $ 2,000,000 Policy Aggregate Sublimit of Liability for each

Insured/Member for Data Protection Loss and Business Interruption Loss

G. First Party Business Interruption Sub-Limits of

Liability for each Insured/Member $ 50,000 1) Hourly Sublimit $ 50,000 2) Forensic Expense Sublimit $ 150,000 3) Dependent Business Interruption Sublimit.

The sub-limits of liability displayed above in Items B, C and D are part of, and not in addition to, the overall Annual Aggregate Limit of Liability for each Insured/Member (Item Aii)

RETENTION: $ 25,000 CSU Auxiliary Organizations only

$ 50,000 Per Occurrence for each Insured/Member with TIV up to $500,000,000 at the time of loss

8 Hour waiting period for first party claims $ 100,000 Per Occurrence for each Insured/Member with TIV greater than

$500,000,000 at time of loss 8 Hour waiting period for first party claims


Page 3 of 7

NOTICE: Policy coverage sections I.A - Information Security & Privacy Liability, I.B.- Privacy Notification Costs and I.C.-Regulatory Defense & Penalties of this policy provide coverage on a claims made and reported basis; except as otherwise provided, coverage under these insuring agreements applies only to claims first made against the insured and reported to underwriters during the policy period. Claims expenses shall reduce the applicable limit of liability and are subject to the applicable retention.

EXTENDED REPORTING PERIOD:

For First Named Insured - To be determined at the time of election (additional premium will apply)

SPECIFIC COVERAGE PROVISIONS:

A.

Information Security and Privacy Liability pays on behalf of the Insured/Member damages and claims expenses excess of the retention which the Insured/Member shall become legally obligated to pay because of any claim, including a claim for violation of a privacy law first made against the Insured/Member and reported to underwriters during the policy period for

• theft, loss or unauthorized disclosure of personally identifiable non-public information or third party corporate information that is in the care, custody or control of the Insured/Member, or an independent contractor that is holding, processing or transferring such information on behalf of the Insured/Member.

• Acts or incidents that directly result from the failure of computer security to prevent a security breach including

o Alteration, corruption, destruction, deletion, or damage to a data asset stored on computer systems

o Failure to prevent transmission of malicious code from computer systems to third party computer systems

o Participation in a denial of service attack directed against a third party computer system

• The failure to timely disclose any of the above in violation of any breach notice law

• The failure to comply with a privacy policy involving the disclosure, sharing or selling of personally identifiable non-public information

• The failure to administer an identity theft prevention program

B. Privacy Notification Costs pay the Insured/Member for reasonable and

necessary costs to comply with a breach notice law because of an incident that first takes place on or after the retroactive date and before the end of the policy period. Privacy Notification Costs means costs incurred within one year of the reporting of the incident or suspected incident to the Underwriters:

• To hire security experts; • Notification provisions, • Public relations mitigation up to $50,000 subject to Nil coinsurance • Credit monitoring for the purpose of mitigating potential damages and

are subject to Nil coinsurance o Credit file monitoring, o Mailing and third party administrative costs


Page 4 of 7

SPECIFIC COVERAGE PROVISIONS: (Continued)

To provide notification to: (a) Individuals who are required to be notified by the Insured Organization

under the applicable Breach Notice Law; and (b) In the Underwriters’ discretion, to individuals affected by an incident in

which their Personally Identifiable Non-Public Information has been subject to theft, loss, or Unauthorized Disclosure in a manner which compromises the security or privacy of such individual by posing a significant risk of financial, reputational or other harm to the individual.

C. Regulatory Defense and Penalties pays on behalf of the Insured/Member claims

expenses and penalties which the Insured/Member shall become legally obligated to pay because of any claim in the form of a regulatory proceeding resulting from a violation of a privacy law and caused by an incident described under certain sections of the information security and privacy liability section of the policy.

D. Website Media Content Liability (occurrence based) days on behalf of the insured damages and claims expenses resulting from any claim made against the Insured/Member for one or more of the following acts committed in the course of covered media activities:

• Defamation, libel, slander, trade libel • Privacy violation • Invasion or interference with publicity • Plagiarism, piracy, misappropriation of ideas under implied contract • Infringement of copyright • Infringement of domain name, trademark • Improper deep-linking or framing within electronic content

E. Cyber Extortion indemnifies the Insured/Member for costs incurred as a result

of an extortion threat by a person other than employees, directors, officers, principals, trustees, governors, managers, members, etc.

F. First Party Data Protection indemnifies the Insured/Member for data protection

loss as a result of alteration, corruption, destruction, deletion, damage or inability to access data assets.

G. First Party Network Business Interruption indemnifies the Insured/Member

for business interruption loss as a direct result of the actual and necessary interruption or suspension of computer systems and is directly caused by a failure of computer security to prevent a security breach.


Page 5 of 7

EXCLUSIONS: (Including but not limited to)

Coverage does not apply to any claim or loss from

• Bodily Injury or Property Damage • Any employer-employee relations, policies, practices • Contractual Liability or Obligation • Any actual or alleged act, error or omission or breach of duty by any director,

officer, manager if claim is brought by principals, officers, directors, stockholders and the like

• Anti-Trust violations • Unfair trade practices • Unlawful collection or acquisition of Personally Identifiable Non-Public

Information • Distribution of unsolicited e-mails, facsimile, audio or video recording • Prior knowledge or previously reported incidents • Incidents occurring prior to retroactive date/continuity date • Any act, error, omission, of computer security if occurred prior to policy

inception • Collusion • Securities Act Violations • Fair Labor Act Violations • Discrimination • Intentional Acts with regard to Privacy and Security Breach • Infringement - Patent and Copyright • Federal Trade Commission and related state, federal, local and foreign

governmental activities • Insured vs. Insured • Money/Securities/Funds Transfer • Broadcasting, Publications and Advertising • War and Terrorism • Pollution • Nuclear Incident • Radioactive Contamination

NOTICE OF CLAIM: • IMMEDIATE NOTICE must be made to Beazley NY of all potential claims and circumstances (assistance, and cooperation clause applies)

• Claim notification under this policy is to: Beazley Group Attn: Beth Diamond 1270 Avenue of the Americas New York, NY 10020

[email protected] NOTICE OF CANCELLATION:

10 days for non-payment of premium

REINSTATEMENT PROVISIONS:

Optional reinstatement at 125% of the annual premium Exhaustion of $2,000,000 Annual Aggregate Limit of Liability for Each Insured/Member for Information Security & Privacy Liability: Reinstatement of Aggregate Limits for each Insured/Member will be automatic and subject to additional premium


Page 6 of 7

CYBER COST: Cost is included in Total Property Premium 30% Earned Premium at Inception

OTHER SERVICES Unlimited Access to e-Place Solutions as per attached brochure.

PROPOSAL VALID UNTIL: July 1, 2015

BROKER: ALLIANT INSURANCE SERVICES, INC.

License No. 0C36861 NOTES: Coverage outlined in this Proposal is subject to the terms and conditions set forth in the policy. Please refer to Policy for specific terms, conditions and exclusions.

IMPORTANT NOTICE: THE NONADMITTED & REINSURANCE REFORM ACT (NRRA) WENT INTO EFFECT ON JULY 21, 2011. ACCORDINGLY, SURPLUS LINES TAX RATES AND REGULATIONS ARE SUBJECT TO CHANGE WHICH COULD RESULT IN AN INCREASE OR DECREASE OF THE TOTAL SURPLUS LINES TAXES AND/OR FEES OWED ON THIS PLACEMENT. IF A CHANGE IS REQUIRED, WE WILL PROMPTLY NOTIFY YOU. ANY ADDITIONAL TAXES AND/OR FEES OWED MUST BE PROMPTLY REMITTED TO ALLIANT INSURANCE SERVICES, INC.

IMPORTANT NOTICE: THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) REQUIRES THE NOTIFICATION OF CERTAIN FINANCIAL ACCOUNTS TO THE UNITED STATES INTERNAL REVENUE SERVICE. ALLIANT DOES NOT PROVIDE TAX ADVICE SO PLEASE CONTACT YOUR TAX CONSULTANT FOR YOUR OBLIGATIONS REGARDING FATCA

This Proposal of insurance is provided as a matter of convenience and information only. All information included in this Proposal, including but not limited to personal and real property values, locations, operations, products, data, automobile schedules, financial data and loss experience, is based on facts and representations supplied to Alliant Insurance Services, Inc. by you. This Proposal does not reflect any independent study or investigation by Alliant Insurance Services, Inc. or its agents and employees.

Please be advised that this Proposal is also expressly conditioned on there being no material change in the risk between the date of this Proposal and the inception date of the proposed policy (including the occurrence of any claim or notice of circumstances that may give rise to a claim under any policy which the policy being proposed is a renewal or replacement). In the event of such change of risk, the insurer may, at its sole discretion, modify, or withdraw this Proposal whether or not this offer has already been accepted.

This Proposal is not confirmation of insurance and does not add to, extend, amend, change, or alter any coverage in any actual policy of insurance you may have. All existing policy terms, conditions, exclusions, and limitations apply. For specific information regarding your insurance coverage, please refer to the policy itself. Alliant Insurance Services, Inc. will not be liable for any claims arising from or related to information included in or omitted from this Proposal of insurance


Page 7 of 7





NY Regulation 194 Disclosure and General Broker Compensation Disclosure Alliant Insurance Services, Inc. is an insurance producer licensed by the State of New York and other States. Insurance producers are authorized by their license to confer with insurance purchasers about the benefits, terms and conditions of insurance contracts; to offer advice concerning the substantive benefits of particular insurance contracts; to sell insurance; and to obtain insurance for purchasers. The role of the producer in any particular transaction typically involves one or more of these activities. Compensation will be paid to the producer, based on the insurance contract the producer sells. Depending on the insurer(s) and insurance contract(s) the purchaser selects, compensation will be paid by the insurer(s) selling the insurance contract or by another third party. Such compensation may vary depending on a number of factors, including the insurance contract(s) and the insurer(s) the purchaser selects. In some cases, other factors such as the volume of business a producer provides to an insurer or the profitability of insurance contracts a producer provides to an insurer also may affect compensation.

The insurance purchaser may obtain information about compensation expected to be received by the producer based in whole or in part on the sale of insurance to the purchaser, and (if applicable) compensation expected to be received based in whole or in part on any alternative quotes presented to the purchaser by the producer, by requesting such information from the producer.




Dear valued APIP client:

Beazley Insurance Group has been a trusted partner to the APIP program over the last 5 years, providing cyber coverage to Insureds at a nominal cost.

In the last few years there has been a noted increase in the number of cyber attacks. Due to the current cyber climate, Alliant believes it is important to review the limits and coverages available to our insureds and to provide additional options and services.

Alliant and Beazley working together have created an option to augment your current cyber coverage through a new APIP Cyber Enhancement Option (CEO). Even if you believe the current cyber limits available through APIP are sufficient, it may be worth investing time to have your Alliant broker discuss the benefits of enhanced coverage. Organizations with the most robust software protection are still susceptible to human error, a third party mishandling your information, or a rogue employee.

Currently, APIP insureds have $2 million in cyber limits to include all services related to a data breach with a sub-limit up to $1 million for Privacy Notification Costs. There are two options available to enhance your coverage through CEO; however, you must purchase Option 1 first in order to access Option 2. The increased coverages and services available include:

Option 1 – • Separating breach notifications from the dollar limit and specifying the number of covered notifications so that

notifications do not erode the APIP limit• No monetary cap for credit monitoring and call center services• Lower deductibles for privacy notification services• Separate, standalone limits for Legal, Forensics, Crisis Management or Public Relations Firms• Hands-on pre and post loss consultation from an expert team of cyber risk professionals.• Extensive risk management resources available for your organizations’ stakeholders (Legal, IT, Risk, Compliance,

etc.)• Short form application

Option 2 – Excess Limits available, up to $5 Million for: • Regulatory Defense & Penalties• Website Media Content Liability• Cyber Extortion• Data Protection Loss & Business Interruption• Increased PCI Fines and Penalties (sub-limited)

A Cyber Enhancement Option indication can be provided in 5-7 business days with little information. Contact your Alliant broker or Account Representative for more information by returning the attached document. Thank you.

APIP Cyber Enhancement Option (CEO):

□ Request:

Our Entity requests a proposal for the APIP Cyber Enhancement Option.

□ Declination:

Our Entity is not interested in the APIP Cyber Enhancement Option (CEO) that has been offered to us. We understand that Alliant has access to cyber insurance markets and can provide a quote for us in the future if we become interested. We decline to purchase the APIP Cyber Enhancement Option at this time.

_____________________________________________________

Entity Name

______________________________________________________ _________________

Signature Date

______________________________________________________

Print Name and Title

Please return this page to your Alliant representative.

*Premium for C.E.O. is excluded from the APIP Property Proposal. See separate C.E.O. proposal

ALLIANT PROPERTY INSURANCE PROGRAM 2015-2016

NAMED INSURED SCHEDULE AS OF 06/05/2015

THE NAMED INSURED IS:

First Named Insured Member shall be deemed the sole agent of each and every Named Insured for the purpose of:

(1) Giving notice of cancellation, (2) Giving instructions for changes in the Policy and accepting changes in this Policy (3) The payment of assessments / premiums or receipt of return assessments / premiums.

Member(s), entity(ies), agency(ies), organization(s), enterprise(s) and/or individual(s) for whom the Named Insured has extended coverage is as follows:

Page 1 DECLARATION 11

Washington State Transit Insurance Pool 2629 12th Court SW Olympia, WA 98502

NAMED INSURED: Asotin County PTBA

Ben Franklin Transit

C-Trans

Chelan/Douglas Public Transportation Benefit Area Authority DBA Link Transit

Clallam Transit System

Columbia County

Cowlitz Transit Authority


Grays Harbor Transportation Authority

Intercity Transit

Island County Public Transit Benefit Area DBA Island Transit


Kitsap Transit

Lewis Public Transportation Benefit Area DBA Twin Transit

Mason County Transit Authority

Pacific County Public Transportation Benefit Area DBA Pacific Transit System

Pierce Transit

Skagit Transit

Snohomish County Public Transportation Benefit Area Corp DBA Community Transit

Spokane Transit

Valley Transit


Whatcom Transportation Authority

ALLIANT INSURANCE SERVICES, INC. 1301 Dove Street Suite 200 Newport Beach, CA 92660

NAMED INSURED: Washington State Transit Insurance Pool

INVOICE DATE: June 10, 2015 CUSTOMER NUMBER: WASHSTA-02 EFFECTIVE DATE: July 1, 2015

INSURANCE CO: Various INVOICE NUMBER: 1031832 POLICY NUMBER: PPROP1516

Total Property Premium: ABS Fee:

Estimated SLT&F’s Broker Fee:

$ 545,612.00 $ 8,942.00 $ 11,581.52 $ 0.00

ALL RISK PROPERTY SUBTOTAL $ 566,135.52

INSURANCE CO: Various INVOICE NUMBER: 2031832 POLICY NUMBER: PBOILER1516

EXCESS BOILER & MACHINERY SUBTOTAL $ 5,889.00

TOTAL DUE AT THIS TIME $ 572,024.52

Total Due includes Premiums Taxes and Fees where applicable. The Cyber Enhancement premium – should you have elected to purchase this coverage it is not included as part of this invoice.

IMPORTANT NOTICE: THE NONADMITTED & REINSURANCE REFORM ACT (NRRA) WENT INTO EFFECT ON JULY 21, 2011. ACCORDINGLY, SURPLUS LINES TAX RATES AND REGULATIONS ARE SUBJECT TO CHANGE WHICH COULD RESULT IN AN INCREASE OR DECREASE OF THE TOTAL SURPLUS LINES TAXES AND/OR FEES OWED ON THIS PLACEMENT. IF A CHANGE IS REQUIRED, WE WILL PROMPTLY NOTIFY YOU. ANY ADDITIONAL TAXES AND/OR FEES OWED MUST BE PROMPTLY REMITTED TO ALLIANT INSURANCE SERVICES, INC.

IMPORTANT NOTICE: THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) REQUIRES THE NOTIFICATION OF CERTAIN FINANCIAL ACCOUNTS TO THE UNITED STATES INTERNAL REVENUE SERVICE. ALLIANT DOES NOT PROVIDE TAX ADVICE SO PLEASE CONTACT YOUR TAX CONSULTANT FOR YOUR OBLIGATIONS REGARDING FATCA.

Please return a copy of the invoice with your payment. Premiums are due and payable upon receipt of this invoice but no later than July 21, 2015. If payment is not received by the due date, policies may be subject to cancellation.

Alliant embraces a policy of transparency with respect to its compensation from insurance transactions. Details on our compensation policy, including the types of income that Alliant may earn on a placement, are available on our website at www.alliant.com. For a copy of our policy or for any inquiries regarding compensation issues pertaining to your account you may also contact us at: Alliant Insurance Services, Attention: General Counsel, 701 B Street, 6th Floor, San Diego, CA 92101.


ALLIANT INSURANCE SERVICES

POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM INSURANCE COVERAGE

Alliant Insurance Services, Inc. 1301 Dove Street Suite 200 Newport Beach, CA 92660 PHONE (949) 756-0271 FAX (949) 756-2713 www.alliant.com License No. 0C36861

June 5, 2015

Named Insured: Washington State Transit Insurance Pool

We are required to send you this notice pursuant to federal legislation concerning terrorism insurance.

You are hereby notified that under the Terrorism Risk Insurance Act of 2002, as amended ("TRIA"), that you now have a right to purchase insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act, as amended: The term “act of terrorism” means any act that is certified by the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Attorney General of the United States, to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property, or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of an air carrier or vessel or the premises of a United States mission; and to have been committed by an individual or individuals, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Any coverage you purchase for "acts of terrorism" shall expire at 12:00 midnight December 31, 2020, the date on which the TRIA Program is scheduled to terminate, or the expiry date of the policy whichever occurs first, and shall not cover any losses or events which arise after the earlier of these dates.

YOU SHOULD KNOW THAT COVERAGE PROVIDED BY THIS POLICY FOR LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM IS PARTIALLY REIMBURSED BY THE UNITED STATES UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. HOWEVER, YOUR POLICY MAY CONTAIN OTHER EXCLUSIONS WHICH MIGHT AFFECT YOUR COVERAGE, SUCH AS AN EXCLUSION FOR NUCLEAR EVENTS. UNDER THIS FORMULA, THE UNITED STATES PAYS 85% THROUGH 2015; 84% BEGINNING ON JANUARY 1, 2016; 83% BEGINNING ON JANUARY 1, 2017; 82% BEGINNING ON JANUARY 1, 2018; 81% BEGINNING ON JANUARY 1, 2019 AND 80% BEGINNING ON JANUARY 1, 2020; OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAID BY THE INSURER(S) PROVIDING THE COVERAGE. YOU SHOULD ALSO KNOW THAT THE TERRORISM RISK INSURANCE ACT, AS AMENDED, CONTAINS A USD100 BILLION CAP THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS' LIABILITY FOR LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH LOSSES IN ANY ONE CALENDAR YEAR EXCEEDS USD100 BILLION. IF THE AGGREGATE INSURED LOSSES FOR ALL INSURERS EXCEED USD100 BILLION, YOUR COVERAGE MAY BE REDUCED.

THE PREMIUM CHARGED FOR THIS COVERAGE IS PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.

LMA9104 12 January 2015


POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM INSURANCE COVERAGE

Alliant Insurance Services, Inc. 1301 Dove Street Suite 200 Newport Beach, CA 92660 PHONE (949) 756-0271 FAX (949) 756-2713 www.alliant.com License No. 0C36861

SELECTION OR REJECTION OF TERRORISM INSURANCE COVERAGE

WHAT YOU NEED TO DO NOW:

PLEASE”X” ONE OF THE BOXES BELOW AND RETURN THIS FORM TO YOUR INSURANCE BROKER.

I am interested in receiving a quote for Terrorism coverage as required to be offered under the Act. Please provide me with a quote.

I decline to purchase the Terrorism coverage as required to be offered under the Act.

_____________________________________________________ Policyholder/applicant signature

______________________________________________________ ___________ Print Name Date


SURPLUS LINES DISCLOSURE

WASHINGTON

This contract is registered and delivered as a surplus line coverage under the insurance code of the State of Washington, Title 48 RCW. It is not protected by any Washington state guaranty association law.

Surplus Lines Broker Name/Initials: Alliant Specialty Insurance Services, Inc. Address: 325 Hillcrest Drive, Suite 250 ____________ _______Thousand Oaks, CA 91360__________________________________ License No.: ___149068 CA________________________________________


APIP Claims Reporting Acknowledgement(s) Receipt Form

The Claims Reporting Forms are being included with your packet to ensure claims reporting procedures are known and available for future reference. Please review the information. We ask that you share these critical documents with all members of your team (and Pool Members and their staffs where applicable.)

We request that you review the items indicated attached, then complete the bottom portion, sign and submit to your Alliant Insurance Services representative either by a scanned email or mail to have it be included in your insurance records.

APIP Property Claims Reporting

Cyber Claims Reporting (this is a claims made policy) if coverage is purchased

Acknowledgement for Claims reporting procedures under Alliant Property Insurance Programs In effect: July 1, 2015 until further notice

I have read and been informed about these separate reporting requirements under the coverage parts that apply to our entity as indicated above and provided through APIP by Alliant.

Insured Entity Name: Washington State Transit Insurance Pool

Authorized Signature: _______________________________________

Print Name Date

___________________________________ Title

ALLIANT INSURANCE SERVICES, INC. PUBLIC ENTITY PROPERTY INSURANCE PROGRAM (PEPIP)

Claim notifications need to be sent to Robert Frey, Diana Walizada and Cathryn O’Meara. In the event this is a Cyber loss please include item III contact, for a Pollution loss please include item IV contact in addition to Alliant Insurance Services contacts.

I. During regular business hours (between 8:30 AM and 5:00 PM PST), First Notice of Claim should be reported to Alliant Insurance Services via telephone, fax, mail or e-mail to our San Francisco Office:

Robert A. Frey, RPA Diana L. Walizada, AIC, CPIW, RPA, AINS Senior Vice President, Regional Claims Director Vice President, Claims Unit Manager Voice: (415) 403-1445 Cell: (415) 518-8490 Voice: (415) 403-1453 Email: [email protected] Email: [email protected]

Address: Alliant Insurance Services, Inc. 100 Pine St, 11th Floor San Francisco CA 94111

Toll Free Voice: (877) 725-7695 Fax: (415) 403-1466

II. Please be sure to include PEPIP’s Claim Administrator as a CC on all Claims correspondence: Cathryn O’Meara

McLaren’s Address: 1301 Dove St., Suite 200

Newport Beach, CA 92660 Voice: (949) 757-1413 Fax: (949) 757-1692 Email: [email protected]

III. Cyber Liability Carrier Beazley NY needs to also be provided with Notice of Claim immediately (if purchased): Beth Diamond Beazley Group

Address: 1270 Avenue of the America’s, Suite 1200 New York, NY 10020 Telephone: (646) 943-5900 Fax: (546) 378-4039 Email: [email protected]

Elaine G. Kim, CISR Assistant Vice President, Claims Advocate Address: 100 Pine Street, 11th Floor

San Francisco, CA 94111-5101 Voice: (415) 403-1458 Fax: (415) 403-1466 Email: [email protected]

IV. Pollution Liability Carrier ACE Environmental, Risk Claims Manager (for those who have coverage): ACE USA Claims

Address: PO Box 5103 Scranton, PA 18505-0510 Environmental Emergency: (888) 310-9553 Fax: (800) 951-4119

Email: [email protected]

Martin Fox-Foster Claims Advocate

Address: 100 Pine Street, 11th Floor San Francisco, CA 94111-5101 Voice: (415) 403-1417 Fax: (415) 403-1466 Email: [email protected]

Please include the Member /JPA name along with the following information when reporting claims: Time, date and specific location of property damaged A description of the incident that caused the damage (such as fire, theft or water damage) Estimated amount of loss in dollars Contact person for claim including name, title, voice & fax numbers Complete and return the Property Loss Notice for processing. Mortgagee or Loss Payee name, address, and account number

mailto:[email protected]







IN THE EVENT OF A

PROPERTY LOSS: 1) Follow your company procedures for reporting and responding to an incident

2) Alert local emergency authorities, as appropriate

3) Report the incident to Alliant Insurance Services immediately at:

877-725-7695 All property losses must be reported as soon as practicable upon knowledge within the risk management or finance division of the

insured that a loss has occurred.

Be prepared to give basic information about the location and nature of the incident, as well as steps which have been taken in response to the incident.

4) Report the incident to McLarens Global AND your Alliant representative

PROPERTY FIRST NOTICE OF LOSS FORM

SEND TO: Alliant Insurance Services, Inc.

BY MAIL: 100 Pine Street, 11th

Floor, San Francisco, CA 94111

BY FAX: (415) 403-1466

BY EMAIL: [email protected] AND [email protected]

Carbon Copy PEPIP Claims Administrator: [email protected] and your Alliant representative

Today’s Date: _________________

Type of Claim: (check all that apply)

Real Property Vehicles

Personal Property Other Insured’s Name & Contact Information Company Name: Point of Contact: Phone #: Address: Broker/Agent’s Name & Contact Information Company Name: Alliant Insurance Services - Claims Point of Contact: Robert A. Frey OR Diana L. Walizada

Address: 100 Pine Street, 11th

Floor, San Francisco, CA 94111

Phone #: 1-877-725-7695 Fax #: 415-403-1466

Policy Information

Policy Number:_______________________ Policy Period: 07/01/2015 to 07/01/2016_______

Limits of Liability: _______________per___________agg Self-Insured Retention/Deductible: ______________

Loss Information

Date of Incident/Claim: _____________ Location: _____________________________________________________

Description of Loss: _______________________________________________________________________________ ________________________________________________________________________________________________ Please list all attached or enclosed documentation: (check if none provided) _____________________________ ________________________________________________________________________________ Name of Person Completing This Form: __________________________ Signature: _________________________




Per the PEPIP USA Form Master Policy Wording, Section IV General Conditions; J. NOTICE OF LOSS In the event of loss or damage insured against under this Policy, the Insured shall give notice thereof to ALLIANT INSURANCE SERVICES, INC., 100 Pine Street, 11th Floor, San Francisco, CA 94111-1073. TEL NO. (877) 725-7695, FAX NO. (415) 403-1466 of such loss. Such notice is to be made as soon as practicable upon knowledge within the risk management or finance division of the insured that a loss has occurred.

IN THE EVENT OF A

CYBER LOSS:

1) Follow your company procedures for reporting and responding to an incident

2) Alert authorities, as appropriate

3) Report the incident to Beazley Group immediately at:

646-943-5900 All Cyber losses must be reported as soon as practicable upon

knowledge by the insured that a loss has occurred. Be prepared to give basic information about the location and nature of the incident, as well as steps which have been taken in response to the incident.

4) Report the incident to Alliant Claims Department and your Alliant representative SPECIAL NOTE REGARDING PRIVACY NOTIFICATION COSTS: The policy provides a $500,000 Aggregate Limit for Privacy Notification Costs. If you utilize a Beazley vendor, the limit is increased to $1,000,000. Please contact Beazley for a list of approved vendors.

CYBER FIRST NOTICE OF LOSS FORM Today’s Date: Insured’s Name & Contact Information Company Name: Point of Contact: Address: Phone #: Broker/Agent’s Name & Contact Information Company Name: Alliant Insurance Services - Claims Point of Contact: Robert A. Frey OR Diana L. Walizada Address: 100 Pine Street, 11th Floor, San Francisco, CA 94111 Phone #: 877-725-7695 Fax #:415-403-1466 Policy Information Policy Number: Policy Period: 7/1/15 to 7/1/16 Limits of Liability: per agg Self-Insured Retention/Deductible

Loss Information Date of Incident/Claim: Location: Description of Loss: Please list all attached or enclosed documentation: (check if none provided) Name of Person Completing This Form: Signature:

SEND TO: Beazley Group BY MAIL: 1270 Avenue of the America’s, Suite 1200, New York, NY 10020 BY FAX: (546) 378-4039 BY EMAIL: [email protected] CC Alliant Claims Department: [email protected] AND [email protected]

And your Alliant representative




A. NOTICE OF CLAIM, LOSS OR CIRCUMSTANCE THAT MIGHT LEAD TO A CLAIM

1. If any Claim is made against the Insured, the Insured shall, as soon as practicable upon knowledge by the Insured, forward to the Underwriters through persons named in Item 9.A. of the Declarations written notice of such Claim in the form of a telecopy, or express or certified mail together with every demand, notice, summons or other process received by the Insured or the Insured’s representative; provided that with regard to coverage provided under Insuring Agreements I.A. and I.C., all Claims made against any Insured must be reported no later than the end of the Policy Period, in accordance with the requirements of the Optional Extension Period (if applicable), or within thirty (30) days after the expiration date of the Policy Period in the case of Claims first made against the Insured during the last thirty (30) days of the Policy Period.

2. With respect to Insuring Agreement I.B. for a legal obligation to comply with a Breach Notice Law because of an incident (or reasonably suspected incident) described in Insuring Clause I.A.1 or I.A.2, such incident or reasonably suspected incident must be reported as soon as practicable during the Policy Period after discovery by the Insured. For such incidents or suspected incidents discovered by the Insured within 60 days prior to expiration of the Policy, such incident shall be reported as soon as practicable, but in no event later than 60 days after the end the Policy Period, provided; if this Policy is renewed by Underwriters and covered Privacy Notification Costs are incurred because of such incident or suspected incident reported during the 60 day post Policy Period reporting period, then any subsequent Claim arising out of such incident or suspected incident is deemed to have been made during the Policy Period.

3. With respect to Insuring Agreements I.A. and I.C., if during the Policy Period, the Insured first becomes

aware of any circumstance that could reasonably be the basis for a Claim it may give written notice to Underwriters in the form of a telecopy, or express or certified mail through persons named in Item 9.A. of the Declarations as soon as practicable during the Policy Period of: a. the specific details of the act, error, omission, or Security Breach that could reasonably be the basis for a Claim; b. the injury or damage which may result or has resulted from the circumstance; and c. the facts by which the Insured first became aware of the act, error, omission or Security Breach Any subsequent Claim made against the Insured arising out of such circumstance which is the subject of the written notice will be deemed to have been made at the time written notice complying with the above requirements was first given to the Underwriters.

4. A Claim or legal obligation under section X.A.1 or X.A.2 above shall be considered to be reported to the Underwriters when written notice is first received by Underwriters in the form of a telecopy, or express or certified mail or email through persons named in Item 9.A. of the Declarations of the Claim or legal obligation, or of an act, error, or omission, which could reasonably be expected to give rise to a Claim if provided in compliance with sub-paragraph X.A.3. above.

ALLIANT PROPERTY INSURANCE PROGRAMS

PROPOSAL LIST OF CARRIERS

JULY 1, 2015 TO JULY 1, 2016

Alliant Insurance Services, Inc. 1301 Dove Street, Suite 200, Newport Beach, CA 92660 PHONE (949)756-0271 FAX (949) 756-2713 www.alliantinsurance.com License No. 0C36861

Page 1

ACE – Illinois Union Insurance Company (Pollution)

ACE European Group Limited

Allied World Assurance Company

Arch Specialty Insurance Company

Axis Specialty Europe Ltd

Axis Surplus Insurance Company

Empire Indemnity Insurance Company

Endurance Worldwide Insurance Limited

Essex Insurance Company

Hartford Steam Boiler Inspec & Insurance

Homeland Insurance Company of New York

Interstate Fire & Casualty Company

Ironshore Indemnity Inc. (AZ only)

Ironshore Specialty Insurance Company (excluding AZ)

Lancashire Insurance Company (UK) Ltd.

Lexington Insurance Company

Liberty Surplus Insurance Corporation

Lloyds of London

Maxum Indemnity Co

National Fire and Marine Insurance Company

Partner Re Ireland Insurance Ltd

QBE Specialty Insurance Company

RSUI

Scottsdale Surplus Lines Insurance Company

Swiss Reinsurance America Corporation

United States Fire Insurance Company

XL Insurance America, Inc.

WSTIP Policy Manual Document Name: Strategic Target Financial Ratios

Policy Date Adopted: 6/26/2009

Category: Finance Revision Date: 6-27-1406/26/2015

Page: 1 of 2

Strategic Target Financial Ratios Policy

Purpose In order to insure that the Pool remains financially strong it is necessary to annually evaluate and compare financial performance for the past five years with current financial performance. This policy adopts target financial ratios and provides for an annual comparative study of these ratios. Authority

1. Interlocal Agreement, Sections 3 (“all things necessary and proper for the establishment of self insurance programs) and 4 (“adopt an annual budget”); and

2. Bylaws, Section 4b (“adoption of annual budget”).

Policy Statement 1. Financial ratios. The Pool shall strive to maintain the following financial ratios:

a. Expected losses to equity—less than 1; b. Net reserves to equity—not more than 1.5; c. Annual reduction in members’ equity—less than 10%; d. Annual increase in prior year loss reserves—less than 25%; e.a. Expense ratio (expenses to annual budget)—less than 20% ; f.b. Loss ratio (losses to annual budget)—less than 65%; and g.c. Combined expense and loss ratio—less than 90%.

2. Annual report. By September of each year and for use in the annual budget development process, the Pool’s executive director shall provide the Board with a report of the financial ratios set forth above for a running six year period. The six year period shall be for the current year and for five years prior to the current year.

3. Collection of information. In order to calculate the ratios the executive director shall collect from all Pool members and Pool members shall provide for each year in the ratio analysis actual or estimated: a. Vehicle miles for all modes; b. Number of vehicles and their values; c. Property values; and d. Number of employees.

4. Variance from ratios. In the event any of the actual values are at variance from target values set forth in 1a-fc, the executive director shall provide the Executive Committee with an action plan which, if implemented, will bring the ratio within the target value. The action plan shall include a timetable for implementation. The Executive Committee shall consider the executive director’s action plan and, after making whatever changes it deems appropriate, shall forward it to the Board for consideration.

5. The Pool shall engage an actuary to assist in the computation of the ratios in 1a-cf.

Page 1 of 2

Amendment The Pool’s Board may amend this policy. Policy History The groundwork for this policy was developed as part of the Pool’s 2008 six year strategic plan.

Passed this 26th day of SeptemberJune , 20142015

Board of Directors Washington State Transit Insurance Pool

Ken MehinNick Covey, President ATTEST: Emmett HeathPaul Shinners, Secretary APPROVED AS TO FORM: Ronald A. Franz, General Counsel

Page 2 of 2

WSTIP Policy Manual Document Name: Strategic Target Financial Ratios

Policy Date Adopted: 6/26/2009

Category: Finance Revision Date: 06/26/2015

Page: 1 of 2

Strategic Target Financial Ratios Policy

Purpose In order to insure that the Pool remains financially strong it is necessary to annually evaluate and compare financial performance for the past five years with current financial performance. This policy adopts target financial ratios and provides for an annual comparative study of these ratios. Authority

1. Interlocal Agreement, Sections 3 (“all things necessary and proper for the establishment of self insurance programs) and 4 (“adopt an annual budget”); and

2. Bylaws, Section 4b (“adoption of annual budget”).

Policy Statement 1. Financial ratios. The Pool shall strive to maintain the following financial ratios:

a. Expense ratio (expenses to annual budget)—less than 20% ; b. Loss ratio (losses to annual budget)—less than 65%; and c. Combined expense and loss ratio—less than 90%.

2. Annual report. By September of each year and for use in the annual budget development process, the Pool’s executive director shall provide the Board with a report of the financial ratios set forth above for a running six year period. The six year period shall be for the current year and for five years prior to the current year.

3. Collection of information. In order to calculate the ratios the executive director shall collect from all Pool members and Pool members shall provide for each year in the ratio analysis actual or estimated: a. Vehicle miles for all modes; b. Number of vehicles and their values; c. Property values; and d. Number of employees.

4. Variance from ratios. In the event any of the actual values are at variance from target values set forth in 1a-c, the executive director shall provide the Executive Committee with an action plan which, if implemented, will bring the ratio within the target value. The action plan shall include a timetable for implementation. The Executive Committee shall consider the executive director’s action plan and, after making whatever changes it deems appropriate, shall forward it to the Board for consideration.

5. The Pool shall engage an actuary to assist in the computation of the ratios in 1a-c. Amendment The Pool’s Board may amend this policy.

Page 1 of 2

Policy History The groundwork for this policy was developed as part of the Pool’s 2008 six year strategic plan.

Passed this 26th day of June , 2015 Board of Directors Washington State Transit Insurance Pool

Nick Covey, President ATTEST: Paul Shinners, Secretary APPROVED AS TO FORM: Ronald A. Franz, General Counsel

Page 2 of 2

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

WSTIP 2004 to 2014Assets, Liabilities & Net Position

Total Assets

Total Liabilities

Net Position

Washington State Transit Insurance Pool Washington State Transit Insurance PoolAs of 12/31/2014 As of 12/31/2014

FYE FYE FYE FYE FYE2010 2011 2012 2013 2014

2010 2011 2012 2013 2014 2015Expected Losses to Equity Ratio: 0.42 0.35 0.34 0.33 0.33

(1) Member Contributions $10,214,682 $10,899,471 $10,662,805 $11,225,365 $11,570,191 $12,212,971 Net Reserves to Equity Ratio: 0.61 0.57 0.61 0.74 0.81 (2) Investment Earnings 570,642 424,570 430,029 213,399 396,819 350,000 Annual Reduction in Member's Equity: 5.23% 16.13% 6.57% 1.16% -0.53% (3) Misc. Income 132,387 115,044 131,426 160,222 213,502 108,000 Expense Ratio: 20.67% 20.84% 20.85% 21.67% 21.60%

Loss Ratio: 59.01% 40.36% 51.78% 57.32% 62.46% (4) Total Revenues $10,917,711 $11,439,085 $11,224,260 $11,598,986 $12,180,512 $12,670,971 Combined Ratio: 79.67% 61.21% 72.63% 79.00% 84.06% [(1)+(2)+(3)]

(5) Paid Loss 6,403,868 7,004,046 6,293,512 6,563,252 6,535,847 6,647,885 (6) Chg in Prior Year Claims Reserve (376,608) (2,604,562) (772,646) (128,413) 690,961 - (6) Operating Expense 1,661,484 1,691,837 1,825,394 1,980,812 1,973,911 (7) ULAE 316,526 340,782 330,677 331,812 356,641 501,436 (8) Excess Insurance 1,650,603 1,792,669 1,903,835 2,166,030 2,206,372 2,026,849 (9) Depreciation Expense 12,463 10,135 11,291 12,347 20,560 20,560 (10) Insurance Services Expenses 437,121 569,912 386,384 439,657 505,170

Operating Expenses 2,111,068 2,271,884 2,223,069 2,432,816 2,499,641 2,462,400

(11) Total Expenditures 10,105,457 8,804,819 9,978,447 11,365,497 12,289,462 11,659,130 [Sum of (5) through (10)]

(12) Change in Net Assets 812,254 $2,634,266 1,245,813 233,489 (108,950) 1,011,841

(13) Beginning Net Assets 15,518,442 16,330,696 18,964,962 20,210,775 20,444,264 20,335,314 (14) Ending Net Assets 16,330,696 18,964,962 20,210,775 20,444,264 20,335,314 21,347,155

(15) Total Losses [(5)+(6)] 6,027,260 4,399,484 5,520,866 6,434,839 7,226,808 6,647,885 (16) Total Expenses [(11)-(15)] 4,078,197 4,405,335 4,457,581 4,930,658 5,062,654 5,011,245

(17) Projected Loss 6,829,688 6,569,903 6,926,756 6,731,986 6,772,356 7,149,321(18) Net Outstanding Reserves 9,942,442 10,894,803 12,282,298 15,164,828 16,555,981 17,245,154

(19) Budgeted Expenses 10,660,786 11,575,860 10,690,499 11,299,848 11,549,642 11,722,843

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