AGENDA FOR THE 2017 ANNUAL MEETING SCHEDULED FOR TUESDAY, APRIL 25, 2017 AT 10:00 A.M. IN THE CAOM OFFICE

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1 2016 ANNUAL REPORT

2 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN P.O. Box 3337 Livonia, MI (734) Fax (734) Internet WEB Site: AGENDA FOR THE 2017 ANNUAL MEETING SCHEDULED FOR TUESDAY, APRIL 25, 2017 AT 10:00 A.M. IN THE CAOM OFFICE The Agenda for the Annual Meeting will be as follows: 1. Call to Order, determination of a quorum. 2. Approval of Minutes of the April 26, 2016 Annual Meeting. 3. Chairperson s remarks. 4. Annual Report overview. 5. Election of Governing Board Members. Current members are: Accident Fund Insurance Company of America Amerisure Insurance Companies Auto-Owners Insurance Company Citizens Insurance Company of America Frankenmuth Mutual Insurance Company Harleysville Lake States Insurance Company Liberty Mutual Insurance Company The Travelers Companies Zurich North America 6. Any additional business to come before the members. 7. Adjournment

3 ANNUAL REPORT FOR THE YEAR 2016 FOR PRESENTATION TO THE MEMBERS OF THE COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Submitted by: Jon D. Heikkinen President

4 MISSION STATEMENT The mission of the Compensation Advisory Organization of Michigan is to enhance the Michigan Workers Compensation System through customer service, education and the administration of the Michigan Workers Compensation Placement Facility. The Compensation Advisory Organization of Michigan will perform its duties in an equitable, professional and responsive manner when dealing with all participants in the system.

5 - 1 - The following is our Annual Report for the year ending December 31, 2016 as presented to the Members and Subscribers of the Compensation Advisory Organization of Michigan. In 2016, CAOM began its thirty-fourth year as the designated advisory organization in Michigan. We are pleased to offer this report highlighting the activities and operational results of CAOM. BOARD OF GOVERNORS Article X and Article XIII, respectively, of the Bylaws of the Compensation Advisory Organization, provide for the establishment of the Board of Governors and standing committees. The Board of Governors was elected by the membership of the Compensation Advisory Organization at the Annual Meeting on April 26, Pursuant to the Bylaws, each governor serves until the next Annual Meeting of the membership. The governors were elected as follows: Accident Fund Insurance Company of America Amerisure Insurance Companies Auto-Owners Insurance Company Citizens Insurance Company of America Frankenmuth Mutual Insurance Company Harleysville Lake States Insurance Company Liberty Mutual Insurance Company The Travelers Companies, Inc. Zurich North America The Board held two meetings in Agenda items included: the appointment of officers and committee members, the operational status of CAOM, Status of Competition, American Cooperative Council on Compensation Technology (ACCCT), Compensation Data Exchange (CDX), Workers Compensation Insurance Organizations (WCIO), Federal Insurance Office and National Association of Insurance Commissioners TRIPRA data calls, Retiree Medical Plan and investment policy, Department of Insurance and Financial Services examination/audit, the 2015 Annual Audit of CAOM and the 2017 Annual Budget. OPERATIONS COMMITTEE The Chairperson of the Board of Governors appointed the Operations Committee as required by Article XIII of the Bylaws. The following members served on the committee in Amerisure Insurance Companies Auto Owners Insurance Company Citizens/Hanover Insurance The Operations Committee met in 2016 to consider CAOM s 2017 budget, investment policy for retiree medical account and other administrative matters.

6 - 2 - DATA COORDINATION COMMITTEE The following companies served on the Data Coordination Committee in 2016: Accident Fund Insurance Company of America American Compensation Insurance Company Amerisure Companies Auto-Owners Insurance Company Farm Bureau Mutual Insurance Company of Michigan Liberty Mutual Insurance Company The Travelers Companies Inc. Zurich Insurance Company The primary function of the Data Coordination Committee is the development and review of the statistical plan and reporting requirements for Michigan. The committee met in July to discuss the Data Collection Agency s Pure Premium Publication, the Michigan Workers Compensation Placement Facility s Rates effective January 1, 2017 and the Retrospective Evaluation of the Assigned Risk Rating Plans. CAOM released the annual Data Collection Agency Pure Premium Publication in September. The 2017 pure premium indications reflected an overall decrease of 9.3 %. Following the release of the DCA Pure Premiums the Michigan Department of Licensing and Regulatory Affairs (LARA) issued a press release stating that Michigan's Work Comp Rate Continues to Decrease, Saving Job Providers $390 Million Since 2011; 39% drop gives businesses resources to hire more workers, increase salaries. The latest Workers Compensation Research Institute report comparing outcomes for injured workers in Michigan indicates that from 2009 to 2013 MI had the largest decrease in average WC claim costs and was the lowest of the 18 states studied. Yet worker outcomes were typical and even better than other states, especially in return to work and access to medical care. AUDIT COMMITTEE The CAOM Audit Committee met two times in 2016 to review its charter, affirm the audit scope and audit partner and to review the results of the 2015 audits. The audit stated the company s financial statements for 2015 were deemed to be presented fairly in all material aspects. The Audit Committee was also provided company budget-to-actual analyses for points during the year and year-end of 2015.

7 - 3 - CAOM S OPERATIONS In 2016, CAOM celebrated the 72nd anniversary of the first constitution of its predecessor organization the Michigan Workmen's Compensation Rating Bureau. CAOM also began its thirty-fourth year as the Designated Advisory Organization (DAO) in Michigan. This designation is maintained under a Memorandum of Understanding between The Data Collection Agency and CAOM that outlines the powers and duties of the CAOM as the DAO. CAOM continued to serve its membership in numerous capacities. We continue to provide our membership with a cost-effective means to process policies, endorsements, and other related transactions. The security of member data has always been an emphasis for our organization and we maintain a very strong posture with regard to internal testing to ensure that risk is minimized. No data breaches occurred during During 2016, CAOM s IT Department was involved in many areas, some of which were: Hired new application developer with strong systems and website development background in June 2016 Reviewed and refined numerous existing data processes to increase data efficiency and accuracy Template development for new Federal terrorism data calls Started development of new company website with responsive-design, enhanced security, and more efficient content management system By collecting and processing all policy, statistical and annual financial call data, CAOM continues to fulfill its role as the Designated Advisory Organization for workers compensation insurance in Michigan. The Michigan Financial Data Reporting Application (MIFDRA) continues to be used to collect financial call information. This program allows all member carriers to submit all financial call data via a web based system that provides users the ability to upload, modify, edit, validate, export and submit financial data. MIFDRA has proven to be very successful by helping to prevent reporting errors, ensure quality data, enhancement of reporting and provide immediate feedback of failed data quality checks. CAOM receives all financial calls online, then reviews and when necessary contacts carriers for resubmission or further explanation of the financial calls. In 2016, CAOM provided the State of Michigan s Workers Compensation Agency (WCA) Funds Administration with individual carrier workers compensation premiums for their yearly assessments. These assessments are for the Second Injury Fund, The Silicosis, Dust Disease and Logging Industry Compensation Funds. Section 551 of Public Act 317 recognizes CAOM as the source of data for this purpose.

8 - 4 - In 2016, CAOM continued its participation in the workers compensation medical data collection program. CAOM, through an agreement with the NCCI, participates in the Medical Data for Michigan. Refer to CAOM Circular Letter #257 for further information. CAOM s web site, continues to have increased activity for access to CAOM/Facility data. On-line access to the Data Collection Agency (DCA) pure premiums, CAOM s circular letters and aggregate financial calls along with Facility rates, forms and manuals increased during The Facility Classification Manual continues to be especially popular. This manual allows underwriters, agents and others the ability to look-up classification codes based on employer operation descriptions. The Online Assigned Risk (OAR) application program, introduced in 2011, now accounts for over 94% of new applications to the pool. CAOM s Members Only area on our web site contains our annual reports, status of competition reports, assessment information, financial audits and supporting data for the annual DCA Pure Premium Publication. This area is available for viewing by all registered CAOM members. If you would like to register for and view our Members Only section, click on In March of 2017, CAOM released a new and improved version of our website. CAOM continues to participate in the meetings of the Workers Compensation Insurance Organizations (WCIO). The WCIO provides a forum for the exchange of information about workers compensation insurance among its members. The WCIO has developed specifications for the electronic submission of data between Insurers and Data Collection Organizations. These specifications are available for reporting policies, unit statistical reports, experience modification factors, and assigned risk notices of assignments. The specifications are available on the WCIO web site: CAOM participates in the Electronic Data Interface Committee (EDI), a subcommittee of the WCIO, which is responsible for developing and maintaining the electronic standards for transmitting workers compensation data. CAOM is also a member of the American Cooperative Council on Compensation Technology (ACCCT) and the Compensation Data Exchange (CDX), which are consortiums of workers compensation rating and advisory organizations. The purpose of ACCCT and CDX is to foster software development and technical cooperation on various projects. This collaboration allows the ACCCT members to offer a unified reporting platform to our member insurers and reduce the need to maintain separate reporting interfaces. ACCCT facilitates this cooperation by providing a venue and support for legal services, billing and bookkeeping. CAOM s goal, along with those of our partnering organizations, is to leverage technology to create efficiencies and improve operations for our users and member companies, while meeting our responsibilities to assure timely and accurate data reporting to support the workers compensation insurance industry.

9 - 5 - ACCCT has developed several products which are provided to the insurance industry in general and CAOM s member carriers. Examples are: 1. Bureau Entry and Edit Package (BEEP) which allows insurers to data enter or import Unit Statistical Reports (USRs) in the WCIO WCSTAT format for reporting to DCOs. This includes validation and create submission functions. 2. Compensation Data Exchange (CDX) is the core product as it contains security and controls for all of the products. Its main function is to transfer files from Insurers to DCOs and from DCOs to Insurers. 3. Experience Modifications Worksheets (EXR) which allows insurers to view, print and download individual employers loss history. This information is made available by DCOs for insurers and is based on the WCIO WCRATING format. The EXR product allows CAOM to discontinue the printing and mailing of Experience Rating forms. For further information on CDX s EXR program, visit the ACCCT web site, 4. Policy Entry and Edit Package (PEEP) which allows insurers to data enter or import policy transactions in the WCIO WCPOLS format for reporting to DCOs. This also includes validation and creates submission functions. Significant events and projects started or completed by the CDX and ACCCT teams in 2016: 1. CDX Security Audit 2. CDX Member Verification 3. CDX - Customer Service Survey 4. CDX Online Training Center (OTC) 5. ACCCT Strategic Review 6. ACCCT New Products and Individual State Initiative s Michigan was included in the Workers Compensation Research Institute s (WCRI) 17Th Edition of WCRI s CompScope Medical Benchmarks, released in October This multi-state study compares workers compensation system performance. This report showed that Michigan s costs per workers compensation claim are substantially lower than the other states included in this study, likely a result of Michigan s Medical Fee Schedule. Hospital inpatient, outpatient and nonhospital payments were all lower than other states, with utilization similar to other study states. The report also evaluated Michigan s performance before and after the 2011 legislative changes.

10 - 6 - CAOM assesses a paper policy processing fee, carriers submitting printed paper copies of new and renewal policies are charged $25 per policy (refer to CAOM Circular Letter #211). This fee has led to many carriers changing over from paper policy submissions to electronic submission of policy data. In 2016, 1.4% of all policies received were a paper medium. Since 2014, CAOM charges $20 for printed Experience Modification forms. The previous charge of $5 per modification remains in effect for carriers who receive their new and renewal modifications electronically via the CDX Experience Rating Worksheet Look-Up Product (refer to CAOM Circular Letter #187 & Circular Letter #192). More and more carriers are receiving their mod data electronically. CAOM s Mod Quote System (refer to CAOM Circular Letter #268) continues to provide value to our membership, by giving carriers more control and greater security in obtaining mod quotes. In 2016, CAOM s Online Experience Mod System (OEMS) continued to provide online access to experience modifications. Carriers who subscribe to this service are able to look up mods for all eligible experience and merit rated risks. CAOM Circular Letter #181 provides the details of this program. These services have reduced employee time as well as printing and mailing costs while enhancing our ability to circulate information to more of our members in a timely manner. Under Michigan s open rating system, CAOM maintains programs to produce experience modifications based on each carrier s individual set of rating factors. Each carrier files their own experience rating factors with the Michigan Department of Insurance and Financial Services (DIFS) and separately notifies CAOM of such changes. Several options are offered to the membership to produce their experience modifications. These options include payroll and loss data, special request modifications for prospective risks, renewal modifications and experience modifications on electronically transmitted files. CAOM has a mod quote form on its web site, which allows carriers to request experience rating forms for prospective insureds via the Internet. Once received at CAOM, the quotes are processed and made available to our members on our website. CAOM has also expanded access to electronic payroll and loss data by agents and employers. CAOM distributes renewal experience rating data via electronic transmission. The WCIO s WCRating file specification is utilized to transmit the entire rating to the carrier electronically. The CDX EXR program previously described is the preferred method for carriers to receive their rating forms electronically. In 2016, additional carriers subscribed to CAOM s web based mod look up service. Total experience rating production fees assessed for all mod services during 2016 amounted to $613,495, which is more than previous years due to a mod fee increase effective in the 4 th quarter of 2014.

11 - 7 - The number of risks qualifying for experience and merit rating increased in The three years of experience normally going into a 2016 rating are 2012, 2013 and The minimum annual premium necessary for merit rating is $1,000 and for experience rating $5,000. The following graph illustrates the number of risks qualifying for experience rating by calendar year for the past five years: 100,000 Modification Production 80,000 60,000 40,000 20,000 - Total Merit Experience Modification Production Policy Yr Total Merit Experience ,252 46,268 34, ,503 46,161 35, ,640 46,120 36, ,282 45,742 37, ,262 45,885 39,377

12 - 8 - The breakdown of Regular Experience Rating Modification (over $5,000 in premium) is as follows: 2016 EXPERIENCE MODIFICATION DISTRIBUTION MOD RANGE FACILITY VOLUNTARY MARKET TOTAL ,287 3, ,264 8, ,022 15,892 16, ,519 3, ,024 1, , Total 2,221 37,156 39,377

13 EXPERIENCE MODIFICATION DISTRIBUTION MOD RANGE FACILITY VOLUNTARY MARKET TOTAL HIGHEST MOD LOWEST MOD AVERAGE MEDIAN CREDITS 67.4% 80.0% 79.3% UNITY 4.0% 4.2% 4.2% DEBITS 28.6% 15.7% 16.5% The breakdown of Merit Rating Modifications (between $1,000 & $5,000 in premium) is as follows: 2016 MERIT MODIFICATION DISTRIBUTION Merit Mod Range # Risks in Facility # Risks in Voluntary Market Total ,523 40,296 43, ,645 1, Total 3,843 42,042 45,885 CREDITS 91.7% 95.8% 95.5% UNITY 7.2% 3.9% 4.2% DEBITS 1.2% 0.2% 0.3% 0.95 = No lost time claims 1.00 = One lost time claim 1.05 = Two or more lost time claims

14 In accordance with the Michigan Workers Compensation Statistical Plan, CAOM receives a unit statistical report for each policy issued. Timely submission of unit statistical data by carriers is needed in order for CAOM to issue experience and merit modifications in advance of the policy renewal date. As a percentage of all 2016 ratings, 96% were promulgated at least one month in advance of their policy renewal date, 95% at least two months, and 82% were at least three months in advance of their renewal date. The month of January distorts the >90 Days metric, due to the fact that the newly approved rating values aren t available until early October. Taking this into account, the timeliness metric for 2016, excluding the month of January, was 93% vs 82%. Policy Period >90 Days Days Days Other* Total > 30 Days (Though June Eff Dates) Experience Rating Timeliness - Mod Promulgation Range % 13% 2% 4% 100% 96% (Full Year) % 13% 1% 4% 100% 96% (Full Year) % 20% 2% 2% 100% 98% * The Other column refers to policies or USR's that were not submitted on time or contained submission errors. CAOM has a system of fining carriers for delinquent unit statistical reports. Unit reports overdue by days result in a $50 fine and reports overdue by more than three months are fined $100. During 2016, two carriers were fined for delinquent unit reports. Overdue Unit Statistical Report Fines $2,750 $0 - $0 - $0 - $ Amount Carriers

15 CAOM also fines for late submission of corrected statistical reports resulting from the electronic criticisms. In 2016, 40 carriers were fined a total of $15,300 for late submission of corrected statistical reports. Overdue WC Criticism Fines $54,000 $35,900 $35,000 $34,050 $15, Amount Carriers CAOM also has a fine system for delinquent financial calls. The Policy Year, Calendar-Accident Year, Reconciliation, and Large Loss calls are due to CAOM on April 1 st. The Countrywide Loss Adjustment Expense call is due on May 1 st. The following graph shows the number of carriers fined for late submissions and the amount collected by CAOM. Financial Call Fines $17,900 $7,625 $9,850 $9,500 $3, Amount Carriers

16 Every other month, CAOM issues a report to each carrier identifying overdue unit statistical reports (USRs). The following graph illustrates the number of overdue stat reports during the past five years. The total number of unit statistical reports received after the due date was 706. This was a 36% increase from Delinquent Unit Statistical Reports

17 CAOM receives requests for rating data from carriers, insureds, agents and other authorized representatives. The following graph shows requests received in 2016 compared to prior years. Experience Rating Data Requests 33,770 33,784 31,855 30,758 33, Experience Rating Data Requests New Letters of Mod Payroll & Policy Yr Carrier Authority Quotes Losses Total ,780 29,699 1,647 33, ,644 28,746 3,105 33, ,610 27,057 1,898 31, ,445 26,887 1,410 30, ,408 30, ,490 As required by the Michigan s Workers Compensation Statistical Plan, the Compensation Advisory Organization of Michigan receives a copy of all voluntary and assigned risk policies and unit statistical reports. The proper handling of this data is very important to CAOM s ability to issue experience modifications and supply statistical data to its member carriers, committees, state regulators and other concerned parties.

18 In 2016, 99.0% of all policies and endorsements were submitted electronically. Policy counts received by the Compensation Advisory Organization of Michigan during the 2016 year and the prior four years are identified in the following chart, along with tables that include endorsement counts below. Endorsements were higher in 2015 as carriers had to take into account the changes in the Federal Terrorism filing. Policy Counts 169, , , , ,045 15,279 17,552 18,540 20,323 20, Voluntary Facility Policy Counts Policy Yr Voluntary Facility Total ,911 15, , ,102 17, , ,279 18, , ,520 20, , ,045 20, ,807 Endorsements Policy Yr Voluntary Facility Total ,624 11, , ,478 11, , ,052 13, , ,463 23, , ,011 12, ,892

19 CAOM also collects fees related to hard-copy policy processing charges. The following table shows these charges over the last five years. Hard Copy Policy Charges $ 53,175 $ 37,400 $ 76,325 $ 97,725 $ 53,625 The following figures represent unit statistical reports processed by CAOM during the last five years for both the Facility and the Voluntary market. Unit Statistical Reports (CAOM & Facility) 204, , , , , The WCIO Workers Compensation Data Specifications Manual contains specifications by which carriers can submit policies and unit statistical reports electronically to each rating organization. This manual is available on the WCIO web site, Michigan follows the same specifications used by the National Council on Compensation Insurance and the other independent states. CAOM receives policy and statistical data via several electronic file transfer methods including ACCCT s Compensation Data Exchange (CDX). The use of electronic transmission of data has proven to be a very efficient and highly accurate means of transferring data. We urge all member carriers to consider utilizing these forms of data submission for both unit statistical reports and policy information. In 2016, CAOM, in its capacity as the Designated Advisory Organization, submitted extensive documentation to the Michigan Department of Insurance and Financial Services (DIFS) to assist the Director in monitoring the status of competition in the workers compensation insurance market. These reports can be found on our web site in the Member s Only section.

20 PERSONNEL In 2016, CAOM had one longtime employee retire that was a manager of our Rating Services department. One new Information Services employee was hired in June of 2016, and this has paid dividends with regard to strengthening the IS development process. STAFFING CAOM started 2016 with a staff of thirty employees and ended with a staff of twenty-nine employees. The table below shows staffing levels by department, as of December 31 st of the year. 2009* 2010** 2011** 2012** 2013** 2014** 2015* 2016** Customer Services Data Services Policy Services Rating Services Managers Corporate Total CAOM is currently operating with 27 full-time employees and 2 part-time employees. * CAOM employed one part-time employee ** CAOM employed two part-time employees TRAINING CAOM has always emphasized cross-training of employees to enhance operational efficiency through the best usage of all employees. As job requirements change, employees undertake additional or new job functions with little disruption to the performance of the organization. During 2016, some employees received training in Microsoft software applications to assist in developing skills to make their everyday job more efficient. Additionally, more employees were offered and took advantage of this opportunity through an online training hub.

21 YEARS OF SERVICE The Compensation Advisory Organization maintained an experienced staff during Average service as of December 31, 2016 is 29.7 years. Years of Service Number of Employees 1 year or less 1 2 to 4 years 2 5 to 9 years 0 10 to 14 years 1 15 to 19 years 2 20 to 24 years 0 25 to 29 years years 19 FINANCES The financial records of the Compensation Advisory Organization of Michigan have been audited by UHY LLC, an independent public accounting firm. Copies of the financial statements for 2016, when finalized and approved, will be made available in the Members Only area of our web site. MICHIGAN OPERATING EXPENSE RATIO CAOM/Facility Year Total Premium Expense Expense Ratio ,160,165,082 5,775, % ,147,792,457 6,269, % ,787,622 6,478, % ,173,857 5,322, % ,950,998 4,922, % ,015,169,215 4,642, % ,128,329,533 4,573, % 2013* 1,209,966,184 4,668, % 2014* 1,253,131,194 4,652, % 2015* 1,246,528,195 4,691, % 2016* 1,197,244,087 4,632, % * Ultimate Total Standard Premium projected as of March 16, 2017

22 CIRCULAR LETTERS The Compensation Advisory Organization of Michigan published seven circulars in 2016 dealing with Michigan Statistical Plan Manual Changes, Financial Calls, Special Class Code Mapping, Notice of Annual Meeting, Reapportionment, Pure Premium Publication, and 2017 Experience Rating. A complete Circular Letter Index is attached to this report. CAOM and Facility circular letters are available for viewing on our web site MEMBERS Attached to this report is an exhibit displaying a complete list of Members of the Compensation Advisory Organization of Michigan as of December 31, At year s end, there were 380 companies affiliated with the Compensation Advisory Organization of Michigan. This report reflects the operation of the Compensation Advisory Organization of Michigan for the 2016 calendar year. We would like to thank the Board of Governors of the Compensation Advisory Organization of Michigan for their direction, the Data Coordination Committee for their technical assistance and all other organizations that provided assistance, cooperation and technical support throughout the year. I thank CAOM s entire membership for their continued support. I especially thank all of our employees, and those individuals who served as company representatives on CAOM committees, for their guidance and assistance throughout the year. I also wish to express my gratitude to the Department of Insurance and Financial Services, the (Michigan) Workers Compensation Agency, and all other organizations that provided assistance during the course of the year. I look forward to continuing our progress in building and maintaining the country s best worker s compensation system. Very truly yours, Jon Heikkinen Jon Heikkinen President

23 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN 2016 Circular Letter List Circular Number Date Description /01/16 Financial Calls for the State of Michigan /14/16 Notice of Annual Meeting with Proxy /24/16 Michigan WC Statistical Plan Update /01/16 Reapportionment /06/16 Special Class Code Mapping Chart /09/16 DCA Voluntary Advisory Pure Premium Filing /30/ Experience Ratings

24 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, ST CENTURY CENTENNIAL INSURANCE COMPANY 21ST CENTURY SECURITY INSURANCE COMPANY ACADIA INSURANCE COMPANY ACCIDENT FUND GENERAL INSURANCE COMPANY ACCIDENT FUND INSURANCE COMPANY OF AMERICA ACCIDENT FUND NATIONAL INSURANCE COMPANY ACE AMERICAN INSURANCE COMPANY ACE FIRE UNDERWRITERS INS CO ACE PROPERTY & CASUALTY INS CO ACIG INSURANCE COMPANY ACUITY A MUTUAL INSURANCE COMPANY ADDISON INSURANCE CO ADVANTAGE WORKERS COMPENSATION INS CO AIG PROPERTY CASUALTY COMPANY AIU INSURANCE COMPANY ALL AMERICA INSURANCE COMPANY ALLIANZ GLOBAL RISKS US INSURANCE COMPANY ALLIED EASTERN INDEMNITY COMPANY ALLIED PROPERTY AND CASUALTY INSURANCE COMPANY ALLIED WORLD INSURANCE COMPANY ALLMERICA FINANCIAL ALLIANCE INSURANCE COMPANY ALLMERICA FINANCIAL BENEFIT INSURANCE COMPANY AMCO INSURANCE COMPANY AMERICAN ALTERNATIVE INSURANCE CORPORATION AMERICAN AUTOMOBILE INSURANCE COMPANY AMERICAN BUSINESS & PERSONAL INS MUTUAL AMERICAN CASUALTY COMPANY OF READING PA AMERICAN COMPENSATION INSURANCE COMPANY AMERICAN COUNTRY INSURANCE COMPANY AMERICAN ECONOMY INSURANCE COMPANY AMERICAN EUROPEAN INSURANCE COMPANY AMERICAN FAMILY HOME INSURANCE COMPANY AMERICAN FIRE AND CASUALTY COMPANY AMERICAN GUARANTEE AND LIABILITY INSURANCE CO AMERICAN HOME ASSURANCE COMPANY AMERICAN INSURANCE COMPANY AMERICAN INTERSTATE INSURANCE COMPANY AMERICAN MINING INSURANCE COMPANY AMERICAN MODERN HOME INSURANCE COMPANY AMERICAN SELECT INSURANCE COMPANY AMERICAN STATES INSURANCE COMPANY AMERICAN ZURICH INSURANCE COMPANY

25 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 AMERISURE INSURANCE COMPANY AMERISURE MUTUAL INSURANCE COMPANY AMERISURE PARTNERS INSURANCE COMPANY AMERITRUST INSURANCE CORPORATION AMGUARD INSURANCE COMPANY AMTRUST INSURANCE COMPANY OF KANSAS ANSUR AMERICA INSURANCE COMPANY ARCH INSURANCE COMPANY ARGONAUT GREAT CENTRAL INSURANCE COMPANY ARGONAUT INSURANCE COMPANY ARGONAUT MIDWEST INSURANCE COMPANY ARROWOOD INDEMNITY COMPANY ASHMERE INSURANCE COMPANY ASSOCIATED INDEMNITY CORPORATION ATLANTIC SPECIALTY INSURANCE CO ATLANTIC STATES INSURANCE COMPANY AUTO OWNERS INSURANCE COMPANY AUTOMOBILE INSURANCE COMPANY OF HARTFORD CT AXIS INSURANCE COMPANY BADGER MUTUAL INSURANCE COMPANY BANKERS STANDARD INSURANCE COMPANY BEDIVERE INSURANCE COMPANY BENCHMARK INSURANCE COMPANY BERKLEY NATIONAL INSURANCE COMPANY BERKLEY REGIONAL INSURANCE COMPANY BERKSHIRE HATHAWAY DIRECT INSURANCE COMPANY BERKSHIRE HATHAWAY HOMESTATE INSURANCE COMPANY BITCO GENERAL INSURANCE CORPORATION BITCO NATIONAL INSURANCE COMPANY BLOOMINGTON COMPENSATION INSURANCE COMPANY BROTHERHOOD MUTUAL INSURANCE COMPANY CAPITOL INDEMNITY CORPORATION CAROLINA CASUALTY INSURANCE COMPANY CENTRAL MUTUAL INSURANCE COMPANY CENTURY INDEMNITY COMPANY CHARTER OAK FIRE INSURANCE COMPANY CHEROKEE INSURANCE COMPANY CHUBB INDEMNITY INSURANCE COMPANY CHUBB NATIONAL INSURANCE COMPANY CHURCH MUTUAL INSURANCE COMPANY CINCINNATI CASUALTY COMPANY

26 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 CINCINNATI INDEMNITY COMPANY CINCINNATI INSURANCE COMPANY CITIZENS INSURANCE COMPANY OF AMERICA CITIZENS INSURANCE COMPANY OF OHIO CITIZENS INSURANCE COMPANY OF THE MIDWEST COLONIAL AMERICAN CASUALTY AND SURETY COMPANY COMMERCE & INDUSTRY INSURANCE COMPANY COMPWEST INSURANCE COMPANY CONIFER INSURANCE COMPANY CONSOLIDATED INSURANCE COMPANY CONTINENTAL CASUALTY COMPANY CONTINENTAL INDEMNITY COMPANY CONTINENTAL INSURANCE COMPANY CONTINENTAL WESTERN INSURANCE COMPANY COREPOINTE INSURANCE COMPANY CRUM & FORSTER INDEMNITY COMPANY DAKOTA TRUCK UNDERWRITERS DEPOSITORS INSURANCE COMPANY DIAMOND STATE INSURANCE COMPANY DISCOVER PROPERTY & CASUALTY INSURANCE CO DONEGAL MUTUAL INSURANCE COMPANY EASTERN ADVANTAGE ASSURANCE COMPANY EASTERN ALLIANCE INSURANCE COMPANY EASTGUARD INSURANCE COMPANY ELECTRIC INSURANCE COMPANY EMCASCO INSURANCE COMPANY EMPLOYERS ASSURANCE COMPANY EMPLOYERS COMPENSATION INSURANCE COMPANY EMPLOYERS FIRE INSURANCE COMPANY EMPLOYERS INSURANCE COMPANY OF WAUSAU EMPLOYERS MUTUAL CASUALTY COMPANY EMPLOYERS PREFERRED INSURANCE COMPANY ENDURANCE ASSURANCE CORPORATION EVEREST NATIONAL INSURANCE CO FALLS LAKE NATIONAL INSURANCE COMPANY FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN FARMERS INSURANCE EXCHANGE FARMINGTON CASUALTY COMPANY FARMLAND MUTUAL INSURANCE COMPANY

27 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 FCCI INSURANCE COMPANY FEDERAL INSURANCE COMPANY FEDERATED MUTUAL INSURANCE COMPANY FEDERATED RURAL ELECTRIC INSURANCE EXCHANGE FEDERATED SERVICE INSURANCE COMPANY FIDELITY & DEPOSIT COMPANY OF MARYLAND FIDELITY & GUARANTY INSURANCE COMPANY FIDELITY & GUARANTY INSURANCE UNDERWRITERS FIREMANS FUND INSURANCE COMPANY FIREMENS INSURANCE COMPANY OF WASHINGTON, D.C. FIRST DAKOTA INDEMNITY COMPANY FIRST LIBERTY INSURANCE CORPORATION FIRST NATIONAL INSURANCE COMPANY OF AMERICA FLORISTS MUTUAL INSURANCE COMPANY FOREMOST INSURANCE COMPANY OF GRAND RAPIDS MICHIGAN FOREMOST PROPERTY AND CASUALTY INSURANCE COMPANY FOREMOST SIGNATURE INSURANCE COMPANY FRANK WINSTON CRUM INSURANCE INC FRANKENMUTH MUTUAL INSURANCE COMPANY FREEDOM SPECIALTY INSURANCE COMPANY FREMONT INSURANCE COMPANY GATEWAY INSURANCE COMPANY GENERAL CASUALTY COMPANY OF WISCONSIN GENERAL INSURANCE COMPANY OF AMERICA GENESIS INSURANCE COMPANY GRANGE INSURANCE COMPANY OF MICHIGAN GRANITE STATE INSURANCE COMPANY GRAY INSURANCE COMPANY GREAT AMERICAN ALLIANCE INSURANCE COMPANY GREAT AMERICAN ASSURANCE COMPANY GREAT AMERICAN INSURANCE CO OF NY GREAT AMERICAN INSURANCE COMPANY GREAT AMERICAN SECURITY INSURANCE COMPANY GREAT AMERICAN SPIRIT INSURANCE COMPANY GREAT DIVIDE INSURANCE COMPANY GREAT MIDWEST INSURANCE COMPANY GREAT NORTHERN INSURANCE COMPANY GREAT WEST CASUALTY COMPANY GREATER NEW YORK MUTUAL INSURANCE COMPANY GREENWICH INSURANCE COMPANY GUARANTEE INSURANCE COMPANY GUIDEONE MUTUAL INSURANCE COMPANY

28 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 HAMILTON MUTUAL INSURANCE COMPANY HANOVER AMERICAN INSURANCE COMPANY HANOVER INSURANCE COMPANY HARCO NATIONAL INSURANCE COMPANY HARLEYSVILLE INSURANCE COMPANY HARLEYSVILLE LAKE STATES INSURANCE COMPANY HARLEYSVILLE PREFERRED COMPANY HARLEYSVILLE WORCESTER INSURANCE COMPANY HARTFORD ACCIDENT AND INDEMNITY COMPANY HARTFORD CASUALTY INSURANCE COMPANY HARTFORD FIRE INSURANCE COMPANY HARTFORD INSURANCE COMPANY OF THE MIDWEST HARTFORD UNDERWRITERS INS CO HASTINGS MUTUAL INSURANCE COMPANY HDI GLOBAL INSURANCE COMPANY HIGHMARK CASUALTY INSURANCE COMPANY HOME OWNERS INSURANCE COMPANY ILLINOIS NATIONAL INSURANCE COMPANY IMPERIUM INSURANCE COMPANY INDEMNITY INSURANCE COMPANY OF NORTH AMERICA INDIANA INSURANCE COMPANY INDIANA LUMBERMENS MUTUAL INSURANCE COMPANY INSURANCE COMPANY OF GREATER NEW YORK INSURANCE COMPANY OF ILLINOIS INSURANCE COMPANY OF NORTH AMERICA INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA INSURANCE COMPANY OF THE WEST INTREPID INSURANCE COMPANY LAMORAK INSURANCE COMPANY LIBERTY INSURANCE CORPORATION LIBERTY MUTUAL FIRE INSURANCE COMPANY LIBERTY MUTUAL INSURANCE COMPANY LM INSURANCE CORPORATION MANUFACTURERS ALLIANCE INS CO MANUFACTURING TECHNOLOGY MUTUAL INSURANCE COMPANY MARKEL INSURANCE COMPANY MASSACHUSETTS BAY INSURANCE COMPANY MEMIC INDEMNITY COMPANY MERCHANTS MUTUAL INSURANCE COMPANY

29 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 MERCHANTS PREFERRED INSURANCE COMPANY MERIDIAN SECURITY INSURANCE COMPANY MHA INSURANCE COMPANY MICHIGAN COMMERCIAL INSURANCE MUTUAL MICHIGAN INSURANCE COMPANY MICHIGAN MILLERS MUTUAL INSURANCE COMPANY MID CENTURY INSURANCE COMPANY MIDDLESEX INSURANCE COMPANY MIDWEST EMPLOYERS CASUALTY COMPANY MILWAUKEE CASUALTY INSURANCE COMPANY MITSUI SUMITOMO INS CO OF AMERICA MITSUI SUMITOMO INSURANCE USA INC MONROE GUARANTY INSURANCE COMPANY MOTORISTS COMMERCIAL MUTUAL INSURANCE COMPANY MOTORISTS MUTUAL INSURANCE COMPANY MUNICH REINSURANCE AMERICA INC NATIONAL AMERICAN INSURANCE COMPANY NATIONAL CASUALTY COMPANY NATIONAL FIRE INSURANCE COMPANY OF HARTFORD NATIONAL GENERAL INSURANCE COMPANY NATIONAL INDEMNITY COMPANY NATIONAL INTERSTATE INSURANCE CO NATIONAL INTERSTATE INSURANCE COMPANY OF HAWAII INC NATIONAL LIABILITY AND FIRE INSURANCE COMPANY NATIONAL SPECIALTY INSURANCE COMPANY NATIONAL SURETY CORPORATION NATIONAL TRUST INSURANCE COMPANY NATIONAL UNION FIRE INS CO OF PITTSBURG NATIONWIDE AGRIBUSINESS INSURANCE COMPANY NATIONWIDE MUTUAL FIRE INSURANCE COMPANY NATIONWIDE MUTUAL INSURANCE COMPANY NATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY NETHERLANDS INSURANCE COMPANY NEW HAMPSHIRE INSURANCE COMPANY NEW YORK MARINE & GENERAL INSURANCE COMPANY NGM INSURANCE COMPANY NORGUARD INSURANCE COMPANY NORTH AMERICAN ELITE INSURANCE COMPANY NORTH AMERICAN SPECIALTY INSURANCE COMPANY NORTH POINTE INSURANCE COMPANY NORTH RIVER INSURANCE COMPANY NOVA CASUALTY COMPANY

30 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 OAK RIVER INSURANCE COMPANY OBI AMERICA INSURANCE COMPANY OBI NATIONAL INSURANCE COMPANY OHIO CASUALTY INSURANCE COMPANY OHIO FARMERS INSURANCE COMPANY OHIO SECURITY INSURANCE COMPANY OLD REPUBLIC GENERAL INSURANCE CORPORATION OLD REPUBLIC INSURANCE COMPANY PACIFIC EMPLOYERS INSURANCE COMPANY PACIFIC INDEMNITY COMPANY PACIFIC INSURANCE COMPANY LIMITED PATRIOT GENERAL INSURANCE COMPANY PEERLESS INDEMNITY INSURANCE COMPANY PEERLESS INSURANCE COMPANY PENN AMERICA INSURANCE COMPANY PENN MILLERS INSURANCE CO PENNSYLVANIA LUMBERMENS MUTUAL INSURANCE CO PENNSYLVANIA MANUFACTURERS ASSOCIATION INSURANCE CO PENNSYLVANIA MANUFACTURERS INDEMNITY PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE PETROLEUM CASUALTY COMPANY PHARMACISTS MUTUAL INSURANCE COMPANY PHOENIX INSURANCE COMPANY PIONEER STATE MUTUAL INSURANCE COMPANY PLATTE RIVER INSURANCE COMPANY PLAZA INSURANCE COMPANY PRAETORIAN INSURANCE COMPANY PREFERRED PROFESSIONAL INSURANCE COMPANY PROPERTY AND CASUALTY INSURANCE CO OF HARTFORD PROTECTIVE INSURANCE COMPANY QBE INSURANCE CORPORATION REDWOOD FIRE AND CASUALTY INSURANCE COMPANY REGENT INSURANCE COMPANY REPUBLIC FRANKLIN INSURANCE COMPANY REPUBLIC INDEMNITY COMPANY OF AMERICA REPWEST INSURANCE COMPANY RETAILERS INSURANCE COMPANY RIVERPORT INSURANCE COMPANY RLI INSURANCE COMPANY

31 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 ROCKWOOD CASUALTY INSURANCE COMPANY RURAL TRUST INSURANCE COMPANY SAFECO INSURANCE COMPANY OF AMERICA SAFETY FIRST INSURANCE COMPANY SAFETY NATIONAL CASUALTY CORPORATION SAGAMORE INSURANCE COMPANY SAMSUNG FIRE & MARINE INSURANCE CO LTD SEABRIGHT INSURANCE COMPANY SECURA INSURANCE A MUTUAL COMPANY SECURA SUPREME INSURANCE COMPANY SECURITY NATIONAL INSURANCE COMPANY SELECT INSURANCE COMPANY SELECTIVE INSURANCE CO OF AMERICA SELECTIVE INSURANCE COMPANY OF SOUTH CAROLINA SELECTIVE INSURANCE COMPANY OF THE SOUTHEAST SELECTIVE WAY INSURANCE COMPANY SENECA INSURANCE COMPANY INC SENTINEL INSURANCE COMPANY LTD SENTRY CASUALTY COMPANY SENTRY INSURANCE A MUTUAL COMPANY SENTRY SELECT INSURANCE COMPANY SEQUOIA INSURANCE COMPANY SFM MUTUAL INSURANCE COMPANY SOMPO JAPAN FIRE & MARINE INS CO OF AMERICA SOMPO JAPAN INSURANCE COMPANY OF AMERICA SOUTHERN INSURANCE COMPANY ST PAUL FIRE & MARINE INSURANCE COMPANY ST PAUL GUARDIAN INSURANCE COMPANY ST PAUL MERCURY INSURANCE COMPANY ST PAUL PROTECTIVE INSURANCE COMPANY STANDARD FIRE INSURANCE COMPANY STAR INSURANCE COMPANY STARNET INSURANCE COMPANY STARR INDEMNITY & LIABILITY COMPANY STARSTONE NATIONAL INSURANCE COMPANY STATE AUTO PROPERTY & CASUALTY INSURANCE COMPANY STATE AUTOMOBILE MUTUAL INSURANCE COMPANY STATE FARM FIRE AND CASUALTY COMPANY STATE NATIONAL INSURANCE COMPANY INC STONINGTON INSURANCE COMPANY STRATHMORE INSURANCE COMPANY SUSSEX INSURANCE COMPANY

32 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 T.H.E. INSURANCE COMPANY TECHNOLOGY INSURANCE COMPANY TNUS INSURANCE COMPANY TOKIO MARINE AMERICA INSURANCE COMPANY TRANS PACIFIC INSURANCE COMPANY TRANSGUARD INSURANCE COMPANY OF AMERICA TRANSPORTATION INSURANCE COMPANY TRAVELERS CASUALTY & SURETY COMPANY TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA TRAVELERS CASUALTY COMPANY TRAVELERS CASUALTY COMPANY OF CONNECTICUT TRAVELERS CASUALTY INS CO OF AMERICA TRAVELERS COMMERCIAL CASUALTY COMPANY TRAVELERS COMMERCIAL INSURANCE COMPANY TRAVELERS CONSTITUTION STATE INSURANCE COMPANY TRAVELERS INDEMNITY COMPANY TRAVELERS INDEMNITY COMPANY OF AMERICA TRAVELERS INDEMNITY COMPANY OF CONNECTICUT TRAVELERS INSURANCE COMPANY TRAVELERS PROPERTY CASUALTY CO OF AMERICA TRI STATE INSURANCE CO OF MN TRIANGLE INSURANCE COMPANY INC TRUCK INSURANCE EXCHANGE TRUMBULL INSURANCE COMPANY TWIN CITY FIRE INSURANCE COMPANY U S SPECIALTY INSURANCE COMPANY UNION INSURANCE COMPANY UNITED FIRE & CASUALTY COMPANY UNITED NATIONAL SPECIALTY INSURANCE COMPANY UNITED STATES FIDELITY AND GUARANTY COMPANY UNITED STATES FIRE INSURANCE COMPANY UNITED WISCONSIN INSURANCE COMPANY UNIVERSAL UNDERWRITERS INSURANCE COMPANY UTICA MUTUAL INSURANCE COMPANY VALLEY FORGE INSURANCE COMPANY VANLINER INSURANCE COMPANY VIGILANT INSURANCE COMPANY WAUSAU BUSINESS INSURANCE COMPANY WAUSAU UNDERWRITERS INSURANCE COMPANY

33 COMPENSATION ADVISORY ORGANIZATION OF MICHIGAN Membership as of December 31, 2016 WESCO INSURANCE COMPANY WEST AMERICAN INSURANCE COMPANY WEST BEND MUTUAL INSURANCE COMPANY WESTFIELD INSURANCE COMPANY WESTFIELD NATIONAL INSURANCE COMPANY WESTPORT INSURANCE CORPORATION WILLIAMSBURG NATIONAL INSURANCE COMPANY WORK FIRST CASUALTY COMPANY WRM AMERICA INDEMNITY COMPANY XL INSURANCE AMERICA INC XL SPECIALTY INSURANCE COMPANY ZENITH INSURANCE COMPANY ZURICH AMERICAN INSURANCE COMPANY ZURICH AMERICAN INSURANCE COMPANY OF ILLINOIS