Samuel M. Garvin, Jr. Vice President and Chief Financial Officer.

Samuel M. Garvin, Jr.Samuel M. Garvin, Jr.

Vice President and Chief Financial OfficerVice President and Chief Financial Officer

Year in Review and Current State of Company

Sam Garvin – Financial Review

Jill Dominguez – Underwriting / Reinsurance

Ann Joslin – Claims Status & Procedures

Robert Schmid – EIS Update

Debbie Gaffney, Southern Co. – IAC Update

2008FINANCIAL

REVIEW

12/31/08 12/31/07 CHANGEASSETS

Invested assets $ 998.7 $1,245.5$

(246.8) Reinsurance recoverable 448.8 404.1 44.7 Deferred Taxes 39.5 0.0 39.5

Other 62.7 67.4

(4.7)

TOTAL $1,549.7 $1,717.0$

(167.3)

LIABILITIES AND SURPLUS Loss reserves $964.1 $844.4 $ 119.7

Unearned premiums 100.2 102.4 (2.2)

Policyholder distribution payable 0.0 12.5 (12.5) Payable for investments 4.7 3.2 1.5

Deferred taxes 0.0 72.5 (72.5)

Other 13.4 14.9 (1.5)

Policyholders’ surplus 467.3 667.1

(199.8)

TOTAL $1,549.7 $1,717.0$

(167.3)

(In Millions)SIMPLIFIED BALANCE SHEET




Other 62.7 67.4

(4.7)

TOTAL $1,549.7 $1,717.0$

(167.3)





Other 13.4 14.9 (1.5)


(199.8)

TOTAL $1,549.7 $1,717.0$

(167.3)


12/31/08 12/31/07 CHANGE

Invested assets $ 998.7 $ 1,245.5$

(246.8)

Payable for investments (4.7) (3.2)

(1.5)

TOTAL $ 994.0 $1 ,242.3 $ (248.3)

FIXED INCOME MANAGERS Pyramis Global Advisors Morgan Stanley

EQUITY MANAGERS SSgA State Street Global Advisors

INVESTMENT ADVISORS Frank Russell Company

INVESTMENT MANAGEMENT

FIXED INCOME MANAGERS Pyramis Global Advisors Morgan Stanley

EQUITY MANAGERS SSgA State Street Global Advisors

INVESTMENT ADVISORS Merrill Lynch

INVESTMENT MANAGEMENT

12/31/08 12/31/07

PYRAMIS $ 279.6 29.2% $ 289.3 24.1%

MORGAN STANLEY $ 279.1 29.1% $ 287.3 24.0%

SSgA – US $ 286.6 29.9% $ 427.5 35.7%

SSgA – NON US $ 112.7 11.8% $ 194.7 16.2%

TOTAL WITH MANAGERS $ 958.0 100.0% $1,198.8 100.0%

CASH $ 36.0 $ 43.5

TOTAL $ 994.0 $1,242.3

(In Millions)

INVESTMENT MANAGERS ALLOCATION

ASSET ALLOCATION - DECEMBER 31, 2008

ASSET CLASS TARGET DRIFT RANGE

U. S. EQUITY 35% 30% - 45%

NON-U. S. EQUITY 15% 10% - 20%

FIXED INCOME 50% 40% - 55%




Other 62.7 67.4

(4.7)

TOTAL $1,549.7 $1,717.0$

(167.3)





Other 13.4 14.9 (1.5)


(199.8)

TOTAL $1,549.7 $1,717.0$

(167.3)


12/31/08 12/31/07 CHANGE

Loss reserves $ 964.1 $ 844.4$

119.7

Reinsurance recoverable (448.8) (404.1)

(44.7)

TOTAL $ 515.3 $ 440.3 $ 75.0

12/31/08 12/31/07 Change

LOSS RESERVES $186.6 $147.3$

39.3

IBNR 325.7 290.0 35.7

LAE RESERVES 3.0 3.0

0.0

TOTAL $515.3 $440.3$

75.0

NET CLAIM RESERVES




Other 62.7 67.4

(4.7)

TOTAL $1,549.7 $1,717.0$

(167.3)





Other 13.4 14.9 (1.5)


(199.8)

TOTAL $1,549.7 $1,717.0$

(167.3)


12/31/08 12/31/07 CHANGE

Unearned premiums $ 100.2 $ 102.4$

(2.2)

UNEARNED PREMIUM RESERVES

12/31/08 12/31/07 ChangeGENERAL LIABILITY $ 50.8 $ 49.7 $ 1.1

D&O / FIDUCIARY 33.4 36.1

(2.7)

PROPERTY 16.0 16.6

(0.6)

TOTAL $100.2 $102.4$

(2.2)

STATEMENT OF OPERATIONS

Revenues (In Millions) 2008 2007 Change

Premiums

Gross premiums written $179.6 $194.1 $ (14.5)

Reinsurance premium assumed 2.4 5.4 (3.0)

Decrease in unearned premiums 2.2 8.1 (5.9)Reinsurance premiums ceded (82.4) (92.1) 9.7

Net premiums earned $101.8 $115.5 $ (13.7)

Other underwriting income 2.1 2.7 (0.6)

Investment income - net 40.1 44.4 (4.3) Investment – OTTI Adjustment (40.2) (1.5) (38.7)

Net loss on disposal of investments (0.4) (0.5) 0.1

TOTAL REVENUE $103.4 $160.6 $ (57.2)



Premiums



Decrease in unearned premiums 2.2 8.1 (5.9)Reinsurance premiums ceded (82.4) (92.1) 9.7





TOTAL REVENUE $103.4 $160.6 $ (57.2)

2008 2007 CHANGE

Net premiums earned $ 101.8 $ 115.5 $ (13.7)

NET PREMIUMS EARNED

12/31/08 12/31/07 Change

GENERAL LIABILITY $ 60.8 $ 60.1 $ 0.7

D&O/FIDUCIARY 33.0 44.7 (11.7)

PROPERTY 5.6 5.3 0.3

ASSUMED 2.4 5.4 (3.0)

TOTAL $101.8 $115.5 $ (13.7)

(In Millions)


Premiums



Decrease in unearned premiums 2.2 8.1 (5.9)

Reinsurance premiums ceded (82.4) (92.1) 9.7





TOTAL REVENUE $103.4 $160.6 $ (57.2)

2008 2007 CHANGE

Investment income – net

Investment – OTTI adjustment

Net loss on disposal of investment TOTAL

$ 40.1

(40.2)

(0.4)

$ (0.5)

$ 44.4

(1.5)

(0.5)

$ 42.4

$ (4.3)

(38.7)

0.1

$ (42.9)


NET INVESTMENT INCOME

(In Millions)

12/31/08 12/31/07 ChangeINTEREST AND DIVIDENDS $ 40.1 $

44.4$ (4.3)

REALIZED (GAINS) LOSSES -EQUITIES -FIXED INCOME SUBTOTAL

0.2 (0.6) (0.4)

0.7 (1.2)

(0.5)

(0.5) 0.6 0.1

OTTI ADJUSTMENT -EQUITIES -FIXED INCOME SUBTOTAL

(17.9)

(22.3) (40.2)

(1.3) (0.2)

(1.5)

(16.6) (22.1) (38.7)

TOTAL $ (0.5) $ 42.4 $ (42.9)

INVESTMENT PERFORMANCE

EIM ANNUAL RETURN

2008 (22.4)% 2003 18.0%

2007 6.5% 2002(6.1)%

2006 12.6% 2001 (1.1)%

2005 6.0% 2000 1.7%

2004 9.2% 1999 7.7%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

TOTAL RETURN PERCENTAGES

TAX ADJUSTED PERFORMANCEVS. BENCHMARKS BY MANAGER

ONE YEAR RETURNS

PERFORMANCEBENCHMARK

COMBINED FUND (22.4) (19.8)

FIXED INCOME PYRAMIS 2.0 (0.9) MORGAN STANLEY (11.1) 4.9

EQUITY SSgA S&P 900 (36.5) (36.9) SSgA NON-US (42.8) (43.4)

7 Years 2.5 %

5 Years 1.5 %

3 Years (2.4)%

LONG TERM INVESTMENT PERFORMANCEAS OF DECEMBER 31, 2008

Expenses (In Millions)Losses and loss adjustment expenses

2008 2007 Change

Gross losses and LAE incurred $255.3 $258.0 $ 2.7Assumed losses and LAE 0.5 0.0 (0.5)Reinsurance recoveries (119.6) (133.9) (14.3)Net losses and LAE incurred $136.2 $124.1 $(12.1)

Other underwriting expenses 1.7 1.9 0.2Administrative expenses 9.0 9.9 0.9Total expenses $146.9 $135.9 $(11.0)Policyholders’ distribution 0.0 12.5 12.5Income before income taxes $ (43.5) $ 12.2 $(55.7)Income tax (20.7) (0.9) 19.8NET INCOME $ (22.8) $ 13.1 $(35.9)


Expenses (In Millions)Losses and loss adjustment expenses

2008 2007 Change

Gross losses and LAE incurred $255.3 $258.0 $ 2.7Assumed losses and LAE 0.5 0.0 (0.5)Reinsurance recoveries (119.6) (133.9) (14.3)Net losses and LAE incurred $136.2 $124.1 $(12.1)

Other underwriting expenses 1.7 1.9 0.2Administrative expenses 9.0 9.9 0.9Total expenses $146.9 $135.9 $(11.0)Policyholders’ distribution 0.0 12.5 12.5Income before income taxes $ (43.5) $ 12.2 $(55.7)Income tax (20.7) (0.9) 19.8NET INCOME $ (22.8) $ 13.1 $(35.9)


2008 2007 CHANGE

Net losses and LAE incurred $ 136.2 $ 124.1 $ (12.1)

12/31/08 12/31/07 Change2008 $ 86.2 $ 0.0 $ (86.2)2007 39.8 119.8 80.02006 (12.5) (3.4) 9.12005 (13.2) 0.6 13.82004 (3.0) (5.8) (2.8)2003 18.2 19.4 1.22002 26.2 3.3 (22.9)PRIOR (5.7) (12.4) (6.7)TAIL 0.2 2.6 2.4

$ 136.2 $ 124.1 $ (12.1)

(In Millions)NET LOSSES AND LAE

Gross Net

2008 138.9% 133.8%

2007 132.2% 120.4%

LOSS RATIO

(In Millions) Gross Net

Initial 12/31/08 Change Initial 12/31/08 Change

2008 $ 190.4 $ 190.4 $ 0.0 $ 86.2 $ 86.2 $ 0.0

2007 252.6 320.4 (67.8) 119.7 159.6 (39.9)

2006 132.6 80.9 51.7 72.8 52.8 20.0

2005 155.5 275.5(120.0)

82.1 103.5 (21.4)

2004 125.8 55.9 69.9 79.5 33.4 46.1

2003 147.8 188.9(41.1)

59.6 114.8 (55.2)

2002 262.1 453.2(191.1)

103.1 299.9 (196.8)

2001 149.2 106.1 43.1 60.1 66.0 (5.9)

2000 120.7 82.0 38.7 73.9 72.7 1.2

All CoveragesINCURRED LOSSES BY ACCIDENT YEAR

(In Millions)Total Current Prior Tail

2008 $ 136.2 $ 86.2 $ 49.8 $ 0.2

2007 124.1 119.7 1.8 2.6

2006 99.3 72.8 28.5 (2.0)

2005 74.1 82.1 (12.1) 4.12004 157.2 79.5 87.8 (10.1)2003 118.5 59.6 56.8 2.12002 47.4 103.1 (53.5) (2.2)

2001 1.3 60.2 (56.3) (2.6)2000 61.0 73.9 (18.0) 5.11999 18.4 39.4 9.4 (30.4)1998 79.4 40.8 43.6 (5.0)1997 31.1 43.8 6.4 (19.1)1996 (6.4) 38.8 (13.5) (31.7)

All Coverages NET INCURRED LOSSES BY ACCIDENT YEAR

($75)

($25)

$25

$75

$125

$175

Total Current Prior Tail

NET INCURRED LOSSES BY ACCIDENT YEAR(In Millions) All Coverages

$25

$50

$75

$100

$125

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Current Linear Trend

CURRENT YEAR NET INCURRED LOSSES(In Millions) All Coverages By Accident Year

$0

$20

$40

$60

$80

$100

$120

$140

$160

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

NET LOSS PAYMENTS

(In Millions)

All Coverages

TOTAL CLAIMS PAID1986 - 2008

Claims Paid

GENERAL LIABILITY $ 271,962,582

D&O / FIDUCIARY 584,546,648

PROPERTY 83,532,292

REINSURANCE 51,733,316

$ 991,774,838

Gross IBNR $519.3 Million

CHANGE IN POLICYHOLDERS’ SURPLUS

BEGINNING SURPLUS $667.1

Plus:Net loss $ (22.8)Unrealized loss of investments $(177.0)

Change $(199.8)

ENDING SURPLUS $467.3

(In Millions)

2009 A. M. BEST RATINGENERGY INSURANCE MUTUAL LIMITED

BEST’S RATING: A (EXCELLENT) OUTLOOK: STABLE

“The rating reflects the Company’s excellent capitalization, historically strong operating returns, and

conservative leverage position.”

Jill DominguezJill Dominguez

Vice President-UnderwritingVice President-Underwriting

WHAT’S GOING ON AT EIM?

Update on 2008

Expectations for 2009

Reinsurance treaty update

NEW MEMBERSIN 2008

Central Arizona Water Conservation DistrictOptim Energy LLCCity Public Service of San Antonio, TXAES CorporationEnel North America, Inc.Vermont Electric Power Company

MEMBERSHIP GROWTH 1986 - 2008

MEMBER RETENTION RATE

2008 97%

2007 98%

2006 97%

2005 96%

2004 99%

MEMBERSHIP MIX

2008 MEMBERSHIP

One Acquisition by Non-EIM Member

Three Non-Renewals2 no longer needed limits1 lost because of price/terms

Four Member/Member Mergers

ENDED 2008 WITH 173 MEMBERS

MEMBER LONGEVITY

87% of membership has been with EIM at least 5 years

Years with EIM Number of Members

20+ years 30

Between 15 – 20 years 41



GROSS WRITTEN PREMIUM2008 VS. 2007

2008

$179.6M

2007

$194.1M

GENERAL LIABILITY

$89.5M Gross Written Premium

162 EGL Policyholders

$75.6M Average Limit

$37.7M Average Attachment Point

48.5% of excess GL Policies Written for Maximum $100M Limit

GENERAL LIABILITY ENHANCEMENTS

EPLI 55%

Worker’s Compensation 22%

Drop Down Joint Venture 45%

Drop Down Over Specific Aggregates

Professional Liability($65M Sublimit)

71%

10%

BREAKDOWN OF UNDERLYING CARRIERS

GLAEGIS – 95%

AIG – 1%

$25M Wildfire aggregate each memberCalifornia Wildfires

ASH PONDS AND STORAGE LANDFILLS

Requirements to line?Inspections/maintenance

How often?Outside third party used?Formed by products vs. natural materials?

LocationsRural?“Downstream” exposure?

Monitoring procedures i.e.Groundwater monitoring systems

CapacityIs it at limit?Disposal onlyPotential to sell to others?

WHERE DOES THIS INFORMATION COME FROM?10-K Environmental disclosures

(not consistent though)

Dam Inspection Reports

EIA form 767 and subsequent forms (EIA 923 form)

Presentations, include photographs

DIRECTORS AND OFFICERS LIABILITY

$51.4M Gross Premium Written

88 EDO Policyholders

$38M Average Limit


45% of D&O policies written for maximum $50M Limit

BREAKDOWN OF UNDERLYING CARRIERS

D&OAEGIS – 73%

AIG – 11%

Chubb – 2%

FIDUCIARY LIABILITY

$5.85M Gross Written Premium

44 Policy Holders

$22.4M Average Limit


73% Buy Maximum Limits

PROPERTY

Premium

$5.9M EIM Only

$21.5M NEIL Only

Total policies written

Primary layer – 45

Excess layer - 20

PROPERTY

Capacity =

$35,000,000

11% of members buy $30M or more

OVERALL VIEW

Longterm view of market

Will entertain Builder’s Risk Placements

Not a primary market for programs that are predominantly catastrophe exposed

Will continue to front for NEIL

REINSURANCE

2009

REINSURANCE RELATIONSHIPSON CORE BUSINESS – GL AND D&O

Various Lloyd’s Syndicates have reinsured EIM since December 1, 1986.

NEIL first reinsured EIM on January 1, 1994.

Basically the same group of reinsurers since January 1, 2004.

Personal relationships are extremely important and proved invaluable at renewal.

Each LossDeductible

Aggregate Retention Participation

$5,000,000 $50,000,000 each lossand

$75,000,000 in theaggregate

28.00%

$5,000,000 $60,000,000 each lossand

$95,000,000 in theaggregate

57.00%

$5,000,000 $70,000,000 each lossand

$115,000 000 in theaggregate

15.00%

100.00%

Each LossDeductible

AggregateRetention

ReinsuranceRecovery 2008

ReinsuranceRecovery 2009

AdditionalRetention

First $100million loss

$ 5,000,000 $58,700,000 $ 45,000,000 $ 36,300,000 $ 8,700,000

Second $100million loss

$ 5,000,000 $33,700,000 $ 70,000,000 $ 61,300,000 $ 8,700,000

Third $100million loss

$ 5,000,000 0 $ 95,000,000 $ 95,000,000 0

Total $15,000,000 $92,400,000 $210,000,000 $192,600,000 $17,400,000

GENERAL LIABILITY EXAMPLE

2009 REINSURANCED&O LIABILITY

RETENTIONS

$5,000,000 Each And Every Loss

$29,000.000 Each Loss And

$58,000,000 In The Aggregate

2009 MAJOR CASUALTY REINSURERS

Lloyd’sLed by Aspen Syndicate and Catlin SyndicateNuclear Electric Insurance LimitedPlatinum ReTransatlantic ReOdyssey ReAWAC

2009 REINSURANCEPROPERTY

Up to February 1, 2007 50/50 quota share arrangement with endurance, Bermuda.

From February 1, 2007 excess of loss arrangement with Lloyd’s, Odyssey Re Hannover Re and Neil.

From February 1, 2008 excess of loss program with NEIL.

2008 RISK MANAGER SURVEYRESULTS

EIM follows reasonable, prudent, and sound underwriting practices:

98%

Agree/Strongly Agree

EIM provides added value in form of broad coverage, price stability, consistent limits, and financial strength:


99.25%


Overall, EIM meets my expectations in level of service:


99%


Ann JoslinAnn Joslin

Claims ManagerClaims Manager

In an ideal world, claims do not approach EIM limits.

Unfortunately, that is not always the case.

CLAIMS OVERVIEW AND GENERAL ADMINISTRATIVE

INFORMATION

CLAIMS NOTICE CATEGORIES

CATEGORY ONE Highly improbable that it will impact EIM; requires only

periodic review to ensure that it is not adversely developing.

CATEGORY TWO Requires continuous monitoring and specific actions.

CATEGORY THREE Meets the accepted requirements for setting specific loss

reserves

OPEN CLAIMS - 2008CATEGORY 1 CATEGORY 2 CATEGORY 3

GENERAL LIABILITY

449 23 9

DIRECTORS & OFFICERS LIABILITY

36 5 4

FIDUCIARY LIABILITY

16 1 3

PROPERTY 28 11 120

CATEGORY 2 AND 3GENERAL LIABILITY LOSSES

Electric Contact 1

Fire 11

Gas Explosion 11 Flooding 3 Pollution 3 Land Claim 1 Steam Pipe Rupture 1

Transformer Explosion 1

REPORTING CLAIMS

1. Liability claims should be reported to Ann Joslin. Electronic reporting is acceptable. E-mail address is [email protected].

2. Property claims should be reported to Ann Joslin, with a copy to Larry Baccari. E-mail for Larry is [email protected].

3. Reporting via fax or regular mail is also available.

4. No special form is required.

CLAIM REPORTING REQUIREMENTS

• Always refer to your policy language for guidance

• Following is sample policy language for GL, D&O and Fiduciary EIM policies

EXCESS GENERAL LIABILITY

(H) Notice of ClaimAs a condition precedent to any rights under this policy, the Insured shall give written notice of claim to the company of any claim against the Insured for an amount in excess of one-half of the amount listed as the attachment point in item 4 of the declarations. Such notice of claim shall be given as soon as practicable.

DIRECTORS AND OFFICERS

(H) Notice of Claim

As a condition precedent to any rights under this policy, the Directors, Officers and/or the Insured shall give a written notice of claim to the company of any claim which appears likely to exceed $1,000,000. Such notice of claim shall be given as soon as practicable.

EXCESS FIDUCIARY LIABILITY

(I) Notice of Claim

As a condition precedent to any rights under this policy, the insured Persons and/or the insured shall give written notice of claim to the company of any claim which appears likely to exceed $1,000,000. Such notice of claim shall be given as soon as practicable.

GENERAL PARTNERS LIABILITY

(H) Notice of claim

As a condition precedent to any rights under this policy, the General Partners and/or the Limited Partnership shall give a written notice of claim to the company of any claim which appears likely to exceed $1,000,000. Such notice of claim shall be given as soon as practicable.

PRACTICAL CLAIM REPORTING CONSIDERATIONS – GL

• There is generally no need to report minor incidents, especially those involving minor injuries, property damage, or as another example, discrimination alleged by one employee who is not highly compensated.

PRACTICAL CLAIMS REPORTING CONSIDERATIONS - GL

• As a practical matter, it is a good idea to report major catastrophic events, even though it is unclear whether exposure will reach one-half of underlying limits for a general liability situation.

PRACTICAL CLAIM REPORTING CONSIDERATION - GL

• Examples of types of claims to report include fires or explosions with multiple fatalities and/or serious injuries and/or extensive property damage.

• Ideally these incidents would be reported to EIM at the time of reporting to the underlying carrier.

PRACTICAL CLAIM REPORTING CONSIDERATIONS - GL

• If a claim is reported to EIM at a later time, at a point when a claim is made for one-half of the attachment point, there are certain issues that should be considered at the time of reporting, as they will bear on administrative and substantive handling.

EXAMPLE OF ADMINISTRATIVE ISSUES• Explosion occurs on 2/10/08.

• Written notice of occurrence is sent to Underlying Carrier A on 2/12/08, even though no claims have been made against the insured as yet.

• A letter of representation dated 6/18/08 is the first claim made against the insured.

• On 8/30/08, a demand is made for settlement in the amount of $40 million.

• On 9/5/08, the insured sends a copy of the demand letter to EIM due to the amount claimed, and stating this is notice to EIM.

• The current policy period is 4/10/08-4/10/09. The prior policy period is 4/10/07-4/10/08.

EXAMPLE OF ADMINISTRATIVE ISSUES – GL – CONTINUED

• First, EIM needs to know the date the claim was first made against the insured to properly set up the claim administratively. So, a copy of the original letter of representation would be needed.

• Second, Underlying Carrier A will have the claim set up under the earlier policy year, due to the notice of occurrence being sent prior to the claim being first made.

• The claim will be set up under the later year at EIM, because notice to the Company (defined as EIM in the policy) was not given prior to the claim first being made against the insured, which happened in this example in the later policy year.

REPORTING A CLAIM AT A LATER DATE - GL

• We realize that there may be a variety of reasons you may not want to report a claim until it is clear that exposure will approach one-half of the attachment point.

• EIM will need to have certain information for both administrative (as in the prior example) and substantive reasons.

EXAMPLES OF ITEMS NEEDED IF REPORTING A CLAIM AT A LATER DATE - GL

1) The initial written notice of claim, be it a letter of representation, a lawsuit, or some other type of written demand.

2) Copies of past and current defense status reports, if applicable.

3) Factual investigation information.4) Any evaluations of damages that have been

completed.5) Any amended complaints, pertinent motions, and

orders issued, if the claim has been in litigation.6) List is not meant to be exhaustive, but to give general

guidance on items that should be sent to EIM with notice.

CLAIMS REPORTING – D&O, FIDUCIARY, GENERAL PARTNER

• These matters are generally reported immediately to EIM, and so we do not often run into the same issues as in a general liability claim that is reported after the claim has developed for a length of time.

• However, in the event a claim is reported later to EIM than to the underlying carrier, the same types of documents should be included with the notice as outlined in the GL presentation.

CLAIMS STATUS AND UPDATES

• Once a claim is reported, you should send periodic updates.

• If a claim is settled within underlying limits, please advise EIM so that we can close our claims file.

• If an incident was reported, but no claims were made as a result, please let us know so we can close our file.

CLAIMS STATUS AND UPDATES

• For claims that are Category 2 or Category 3, Baker & McKenzie works closely with EIM in monitoring developments. You will typically receive a letter asking that the monitoring attorney at the firm be copied on all status updates.

CLAIMS CLOSINGS

• After a claim is reported and there has been no further correspondence or update indicating exposure to EIM, you may receive a letter indicating EIM is closing its file.

• Immediately notify EIM if the claim has adversely developed such that the claim should be re-opened. Otherwise, the letter is for your information and records.

OTHER INFORMATION• EIM does not have a claims staff other than me and

Jane Murphy, who assists in claims administrative matters. All claims correspondence, including notices of new claims, should be directed to me.

• This presentation was designed to give a general overview and may not apply to all situations, since each claim is unique (especially when the EIM attachment point is involved). Please feel free to contact me if you have any questions about reporting, updates, or other claims matters.

• My number is 813-490-0925.

Thank you for your attention this morning and I hope you enjoy the remainder of this

year’s meeting.

Robert P. SchmidRobert P. Schmid

Vice President and Chief Operating Officer - EISVice President and Chief Operating Officer - EIS

ENERGY INSURANCESERVICES

2008

2008 REVIEW

OPERATIONS

FINANCIAL ENVIRONMENT IMPACT

TAX EXAMINATION

2008 REVIEWFINANCIAL HIGHLIGHTS

2008 2007

Assets $ 1.6 Billion $ 1.8 Billion

Wr. Premium 65 Million 80 Million

Paid Losses 78 Million 68 Million

Inv/Cash 550 Million 600 Million

MBP Equity 53 Million 71 Million

2008 REVIEW EIS OPERATIONS

• Accelerated Delivery of MBP Financial Reporting for Consolidation Purposes

• Improved Regulatory Review Cycle when SCDOI Approval Is Required

• Finalized and Populated Secured Web Portal for all Programs

• Established One New Program

FINANCIAL TREMORS

• Celebrated Wachovia Bank’s 130th Year of Existence

• Established Multiple Brokerage Accounts In Lieu of Bank Deposits

• Sought Safe Harbor in Direct Treasuries and MM Funds with Reduced Credit Risk

• Circled the Wagons - Wells Fargo to the Rescue

FINANCIAL TREMORS 2009 IMPLICATIONS

• Significantly Reduced Return on Assets

• Concerns Surrounding Reinsurers Stability

• Expanded Alternative Risk Activity as Market Conditions Harden

EIS IRS EXAM

• Concluded Field Exam Activities in Early Fall

• Received a Favorable Technical Analysis of One Cell from the IRS Chief Counsel in September

• Agents Issue Final Report in November Excludes Any Reference to Chief Counsel Advice

• Appealed the Field Agents Final Report in December

EIS IRS EXAM 2009 IMPLICATIONS

• Timing of Appeal Process is uncertain but likely a 2009 Event

• EIS Conformance with Revenue Ruling 2008-08 and Corresponding Analysis provided by IRS Chief Council’s Advice Memorandum Forms a Solid Basis for a Sustained Appeal

THE FUTURE OF EISTHE FRUITS OF REDOMESTICATION

• Removal of Reputational and Political Risk Inherent with an Offshore Address

• Achievement of Significant Operational Improvement

• Elimination or Major Reduction of Tax Uncertainty for Protected Cell Captives

EIS 2009 ANNUAL CONFERENCE

October 19th – 23rd

at the Westin Poinsett

in Greenville, South Carolina

Debbie GaffneySouthern Company

Debbie GaffneySouthern Company

Insurance Advisory CommitteeChairman

Insurance Advisory CommitteeChairman

IAC• Deborah S. Gaffney, CPCU (Chairman) - Southern Company• Randall L. Martin, CPCU (Vice Chairman)- American Electric

Power

• John E. Luley - Pepco Holdings, Inc.• Robert J. Semet, CPCU, ARM, Are - Exelon Corporation• Mark E. Blair - Ameren Services Company• Robert W. Dillard – Knight, Inc.• Jack R. Hadsall, CPCU - City Utilities of Springfield, MO• Sandra K. Hart - Northwest Natural Gas Company• Julie R. Jackson, ARM, CPCU, CLU, FLMI, - Targa Resources, Inc.• Gary Y. Little, ARM, CPCU - Progress Energy, Inc.

Task Force

Carbon SequestrationRandy Martin (Chair), Jack Hadsall &John Luley

Cyber LiabilityJulie Jackson (Chair), Bob Dillard, Gary Little, John Luley & Randy Martin

Annual SurveyDebbie Gaffney (Chair), Sandra Hart & Mark Blair

Energy SchoolBob Dillard & Debbie Gaffney

TerrorismJohn Luley (Chair) & Bob Semet,

The Energy School

Samuel M. Garvin, Jr. Vice President and Chief Financial Officer.

Documents

Transcript of Samuel M. Garvin, Jr. Vice President and Chief Financial Officer.