QUESTIONS AND ANSWERS

Transcription

1 The Policy provides insurance to the Named Certificate Holder shown in Item 1. of the "Certificate of Insurance" (hereinafter referred to as Registered Representative ) subject to the "Master Policy" Declarations issued to the "Named Insured". Unless otherwise stated, the phrase the Policy or this Policy shall refer only to the insurance evidenced by the "Certificate of Insurance" and shall not refer to the "Master Policy" Declarations. Similarly, the phrase Limits of Liability shall refer to the Limits of Liability identified in the "Certificate of Insurance". 1. Who is Zurich American Insurance Company (a member of the Zurich Financial Services Ltd. and an Admitted Insurer)? The Policy is issued by Zurich American Insurance Company (hereinafter referred to as the Company). The policy is written on an admitted basis. Zurich American Insurance Company is rated A+ by A.M. Best. The information obtained from A.M. Best dated December 1, 2016 is not in any way CalSurance Associates warranty or guaranty of the financial stability of the insurer in question, and that the information is current only as of the date of publication. 2. What is the Financial Sales Professionals Purchasing Group? The State of New York Insurance Department requires that a group policy must be purchased through a Risk Purchasing Group, (RPG). At no additional charge, Securian Financial Group provides for your membership in the Financial Sales Professionals Purchasing Group, a RPG administered by CalSurance Associates and operating pursuant to the Liability Risk Retention Act of 1986 (15 USC et seq.) for the benefit of Financial Professionals insured through CalSurance Associates. 3. Who is CalSurance Associates? CalSurance Associates, a division of Brown & Brown Program Insurance Services, Inc. is the broker selected by H. Beck, Inc. to administer and place coverage with the underwriting marketplace on behalf of the Registered Representatives of H. Beck, Inc. Questions regarding enrollment, coverage, when to file a Claim, or requests for copies of your Certificate of Insurance can be obtained from CalSurance Associates. All questions regarding payment of premium should be directed to H. Beck, Inc. (See contact information Question 4). Lancer Claims Services, a division of Brown & Brown Program Insurance Services, Inc. has been selected by Zurich American Insurance Company as the administrator of Claims that occur under the H. Beck, Inc. sponsored Professional Liability Policy. Lancer Claims Services handles only professional liability claims. Questions regarding when or how to file a Claim or inquiries on Claims already submitted under the program should be directed to Lancer Claims Services. (See contact information Question 4). HBI-FAQ v1 CalSurance Associates, 1 of 14

2 Who is CalSurance Associates (continued) Brown & Brown is one of the largest and most respected independent insurance intermediaries in the nation, with over 70 years of continuous service. The Company is ranked as the sixth largest such organization in the United States by Business Insurance magazine. 4. Important Contact Information These resources are available to Registered Representatives seeking information regarding professional liability coverage: Enrollment, Certificates of Insurance or Coverage Questions: Visit the H. Beck, Inc. website at select the E&O link CalSurance Associates Customer Service: (800) Premium Payment: Sue Gibson H. Beck, Inc. (301) Questions regarding Prior Acts coverage: Scott Thorson H. Beck, Inc. (301) To report a Claim" or Potential claim: First Reports Desk H. Beck, Inc. Lancer Claims Services Ben Cooper, Esq. Phone: (800) , option 1 Phone: (301) FirstReports@lancerclaims.com legal@cfginc.com; or bcooper@cfginc.com 5. What do the Limits of Liability of $2,000,000 / $2,000,000 mean? The first limit stated is the each Claim each Registered Representative limit and is the most the Company will pay for Damages arising out of any one Claim against a Registered Representative. The second limit is the Aggregate each Registered Representative and is the most the Company will pay for all Damages arising out of all Claims made against the Registered Representative. In other words, the Company will not pay over $2,000,000 on any one Claim and it will not pay over a total of $2,000,000 for the entire Certificate Period for each Registered Representative, regardless of the number of Claims made against the Registered Representative during the Certificate Period. HBI-FAQ v1 CalSurance Associates, 2 of 14

3 6. Can I purchase additional Limits of Liability? Yes. Registered Representatives may purchase a $3,000,000 each Claim each Registered Representative with a $3,000,000 Aggregate each Registered Representative Limit of Liability for an additional premium. This option is only available during the open enrollment period at renewal. 7. Where Do I report a Claim or potential claim? Claims and notice of potential claims should be reported to Lancer Claims Services via one of the following methods: By By Fax: (714) By Mail: FirstReports@lancerclaims.com First Reports Desk Lancer Claims Services 681 S. Parker Street, 3rd Floor Orange, CA Telephone: (800) , Option 1 Please also provide a copy to Ben Cooper, Esq. at H. Beck, Inc.: By legal@cfginc.com; or bcooper@cfginc.com Fax: (301) Telephone: (301) What is a Claim? A Claim is considered to be any written demand for money made against you or someone covered under your Certificate of Insurance. Some examples of what is considered a Claim include: a letter from a client stating you made a mistake and they are requesting money to fix the mistake or to compensate them for the loss due to your alleged mistake; or service of suit (summons and/or complaint); or institution of arbitration proceedings; or FINRA statement of claim; or any notice from a federal or state regulatory body (i.e., a State Insurance Department) written on behalf of a client. HBI-FAQ v1 CalSurance Associates, 3 of 14

4 9. Why should I report a potential Claim? If during the Certificate Period you provide the Company with notice of any act, error, omission or Personal Injury which could reasonably be expected to give rise to a Claim under the Policy, and provided such written notice contains particulars sufficient to identify an Insured and reasonably obtainable information with respect to: the negligent act, error, omission or Personal Injury ; the harm or Personal Injury which has resulted or may result, from such negligent act, error, omission or Personal Injury ; the circumstances by which the Insured first became aware of such negligent act, error, omission or Personal Injury ; and then any Claim for which coverage is provided by this Policy, that may be made against the Insured arising out of such act, error, omission or Personal Injury shall be deemed for the purposes of this insurance to have been made and reported on the date on which the notice was received by the Company. No coverage shall be provided in the event the Insured has any other applicable insurance. 10. What is a Claims Made and Reported policy? Coverage is provided to you on a Claims Made and Reported basis. This means Claims must be first made against you and reported to the Company during the Certificate Period or any applicable Extended Reporting Period of this Policy. In order for the coverage to be triggered all of the following conditions must be met: The Claim arises out of a negligent act, error or omission of the Insured in rendering or failing to render Professional Services (defined in Question 21); and The Registered Representative is currently contracted with H. Beck, Inc. and enrolled in the E&O program or was enrolled in the program at the time their Registered Representative s contract was terminated and is reporting a Claim under an applicable ERP; and The negligent act, error or omission occurred on or after the Retroactive Date (defined in Question 12) and before the Termination of Coverage Date (defined in Question 16); and Prior to the effective date of the of the Registered Representative s enrollment under the Policy, the Registered Representative had no knowledge of any circumstance that could reasonably be expected to result in a Claim and; The Claim is otherwise covered under the terms, conditions and exclusions of the Policy. HBI-FAQ v1 CalSurance Associates, 4 of 14

5 11. Am I covered for acts committed or alleged prior to the effective date of my Certificate of Insurance? Coverage is provided for acts that occurred on or after the Retroactive Date and before the end of your Certificate Period as long as the following requirements are satisfied: Prior to the effective date of the Registered Representative s enrollment under the current Policy, the Registered Representative had no knowledge of any circumstance that could reasonably be expected to result in a Claim ; and you have no other valid and collectible insurance available for any such Claim ; and the act or Personal Injury occurred after the Retroactive Date (defined in Question 12); and the act, error or omission involves a covered Professional Service (defined in Question 21); and The Claim is first made against you during the Certificate Period or any applicable Extended Reporting Period; and The Claim is otherwise covered under the terms and conditions of the Policy. 12. What is the Retroactive Date (or Prior Acts Coverage) under the Policy? The Retroactive Date (prior acts coverage) provided under the Policy is the effective date of the Registered Representative s date of contract with H. Beck, Inc. If the act, error, omission or Personal Injury occurred prior to the effective date of this Certificate Period, coverage will only apply if there is no other valid and collectible insurance available to you. Coverage prior to the Registered Representative s date of contract with H. Beck, Inc. may be provided by endorsement. Coverage must be applied for with Scott Thorson at H. Beck, Inc. (see Question 4 for contact information) and is subject to underwriting review and acceptance. 13. Does the Policy pay for the expenses to defend a Claim? The Company has the right and duty to defend you when a Claim is made against you seeking Damages for a negligent act, error, omission or Personal Injury while rendering or failing to render Professional Services. The cost to defend you is paid in addition to your each Claim Limit of Liability and is not subject to a deductible (see exceptions below regarding Claims involving H. Beck, Inc. and Claims as an approved unaffiliated RIA or involving approved life settlements). This means the Company will pay for the first dollar of your Defense Costs if the Claim is covered under the Policy. Claims involving approved Life Settlements or through a Registered Representative s approved unaffiliated RIA are subject to higher deductibles and are also applicable to Defense Costs. (See Question 14 to determine when you will owe a deductible). HBI-FAQ v1 CalSurance Associates, 5 of 14

6 Does the Policy pay for the expenses to defend a Claim (continued)? Without the written consent of the Company, you may not: incur any expense; or demand or agree to arbitration of any Claim ; or make any payment, admit liability, settle any Claim or assume any obligation. Please be aware there is no obligation to defend or continue to defend any Claim or suit, after the per Claim Limit of Liability has been exhausted by payment of Damages. 14. How does my Deductible work? Your deductible is based on the type of product or service that triggers the Claim. The following deductibles are applicable to the payment of Damages only. This means your deductible does not apply if the only cost paid under the Policy is related to your Defense Costs. Proprietary non- Securities products Securian Financial Group. and its Subsidiaries There is a $1,000 Damages only deductible for each Claim involving proprietary products of Securian Financial Group and its Subsidiaries. This deductible does not apply to Claims involving Securities other than annuities. Outside non- Securities products There is a $2,000 Damages only deductible for each Claim involving products that are not proprietary products of Securian Financial Group and its Subsidiaries. This includes Claims involving disability products of Standard Insurance Company and MetLife Insurance, long term care products of John Hancock, and for products sold through The Bisys Group or directly with other insurers. This deductible does not apply to Securities other than annuities. Securities (other than annuities) There is a $5,000 Damages only deductible for each Claim involving Securities other than annuities. The following deductibles apply to Registered Representatives who are approved by H. Beck, Inc. to engage in such activity. These deductibles are applicable to the payment of Damages and Defense Costs. This means you are responsible for the amount of your Claim up to your deductible regardless of whether such amount is based on the cost to defend you or payment of Damages to a third party. Approved Unaffiliated Registered Investment Advisor There is a $5,000 Damages and Defense Costs deductible for each Claim involving a Registered Representative s approved Registered Investment Advisor. HBI-FAQ v1 CalSurance Associates, 6 of 14

7 How does my Deductible work? (continued) Approved Life Settlements There is a $10,000 Damages and Defense Costs deductible for each Claim involving the purchase or sale of or the giving of advice regarding approved Life Settlements. 15. How do I obtain coverage for my staff? The Registered Representative s coverage extends to the following (Please see Question 28 for coverage as it relates to a Registered Representative s approved unaffiliated Registered Investment Advisor ): Any corporation, partnership or other business entity which engages in Professional Services and which is either owned or controlled by the Registered Representative but only with respect to those operations of the business entity related to the Professional Services provided by the Registered Representative ; Any person acting on behalf of the Registered Representative, who was or is a partner, officer, director or stockholder of the Registered Representative s business entity, provided such person is not a party to a contract with any other insurance company, and then only with respect to Professional Services provided by the Registered Representative ; Any person acting on behalf of the Registered Representative, who was or is an employee of the Registered Representative or their business entity, but only while acting within the scope of their duties as an employee of the Registered Representative or their entity with respect to Professional Services provided by the Registered Representative. Coverage does not extend to an employee s direct solicitation of any insurance or Securities personally or on behalf of the Registered Representative, regardless of the method of compensation; Heirs, executors, administrators or legal representatives of the Registered Representative in the event of the Registered Representative s death, incapacity or bankruptcy; and The spouse of a Named Certificate Holder but only for a Claim arising out of their status as such, and where such Claim seeks damages from marital community property, jointly held property or property transferred from the Named Certificate Holder to the spouse. No coverage is provided for any Claim arising out of a negligent act, error or omission of a spouse or any Personal Injury offense committed by a spouse. For purposes of this Subsection, the term spouse shall include any natural person qualifying as a domestic partner under any applicable federal, state, local or foreign law. Those individuals or entities listed above share in the each Claim and Aggregate Limit of Liability of the Registered Representative. They do not have a separate Limit of Liability. HBI-FAQ v1 CalSurance Associates, 7 of 14

8 16. What does Termination of Coverage mean? Termination of Coverage means the earlier of the following: 1. The nonrenewal of the Policy; 2. The cancellation of the Policy; or 3. The termination of a written contract between a Registered Representative and H. Beck, Inc. or the Registered Representative s change in status to a Split Only Representative. 17. What happens if my Registered Representative s contract with H. Beck, Inc. is terminated during the Certificate Period? In the event of Termination of Coverage due to the termination of a Registered Representative s contract with H. Beck, Inc., the insurance under this Policy shall continue until the last day of the month in which the Registered Representative s contract with H. Beck, Inc. terminates. There will be no return of premium. The Registered Representative shall have a free Automatic Extended Reporting Period of sixty (60) days after such date to report in writing to the Company any Claim which is first made during said Automatic Extended Reporting Period of sixty (60) days and arises out of a negligent act, error, omission or Personal Injury which occurred before such date and on or after the Registered Representative s Retroactive Date. This Automatic Extended Reporting Period shall be included within the Optional Extended Reporting Period, if such is purchased. No coverage shall be provided if the Registered Representative cancels this Policy before the end of the Certificate Period or if the Registered Representative s contract was terminated for failure to comply with the policies and procedures of H. Beck, Inc. 18. What happens if my Registered Representative s contract with H. Beck, Inc. is terminated during the Certificate Period due to retirement, disablement or death? Coverage under the Policy ceases upon termination of the Registered Representative s contract with H. Beck, Inc. Registered Representatives who become disabled, deceased or who retire from the business of providing Professional Services and transition their business to another H. Beck, Inc. Registered Representative will be provided with a free Automatic Extended Reporting Period of two (2) years from the date of their Termination of Coverage due to retirement, disablement, or death in which to report in writing to the Company any "Claim" which is first made during said Automatic Extended Reporting Period of two (2) years and arises out of any negligent act, error or omission or "Personal Injury" which occurred before such date and on or after the "Retroactive Date". No coverage shall be provided in the event the Registered Representative contracts with another Broker/Dealer or renews their license. This Automatic Extended Reporting Period of two (2) years shall be included within the Optional Extended Reporting Period, if such is purchased. No coverage shall be provided if the Registered Representative cancels this Policy before the end of the "Policy Period". HBI-FAQ v1 CalSurance Associates, 8 of 14

9 19. What happens if I convert from a producing Registered Representative to a Split Rep Only (or SRO ) during the Certificate Period due to retirement? Coverage under the Policy ceases when Registered Representative converts from a producing Registered Representative to a SRO with H. Beck, Inc. Registered Representatives who convert to a SRO due to their retirement from the business of providing Professional Services and transition their business to another H. Beck, Inc. Registered Representative will be provided with a free Automatic Extended Reporting Period of two (2) years from the date of their Termination of Coverage due to retirement and conversion to a SRO in which to report in writing to the Company any "Claim" which is first made during said Automatic Extended Reporting Period of two (2) years and arises out of any negligent act, error or omission or "Personal Injury" which occurred before such date and on or after the "Retroactive Date". No coverage shall be provided in the event the Registered Representative contracts with another Broker/Dealer or re-commences providing Professional Services. This Automatic Extended Reporting Period of two (2) years shall be included within the Optional Extended Reporting Period, if such is purchased. No coverage shall be provided if the Registered Representative cancels this Policy before the end of the "Policy Period". If you have elected SRO status and you are still actively providing Professional Services (including life insurance sales), you will not be covered by the Policy. 20. Do I have any Extended Reporting Period options? In the event of Termination of Coverage based on either the termination of the Registered Representative s contract with H. Beck, Inc. (other than Registered Representatives who are terminated for failure to comply with the policies and procedures of H. Beck, Inc.) or the Registered Representative s change in status to a Split-Only Representative, the Registered Representative or their estate, may elect to purchase an Optional Extended Reporting Period as follows: Three (3) years from the Termination of Coverage as defined above, if the Registered Representative or their estate pays an additional premium equal to 200% of the Registered Representative s last annual premium. Five (5) years from the Termination of Coverage as defined above, if the Registered Representative or their estate pays an additional premium equal to 300% of the Registered Representative s last annual premium. Unlimited from the Termination of Coverage as defined above, if the Registered Representative or their estate pays an additional premium equal to 400% of the Registered Representative s last annual premium. HBI-FAQ v1 CalSurance Associates, 9 of 14

10 Do I have any Extended Reporting Period options (continued)? The Extended Reporting Periods do not reinstate or increase the Registered Representative s Limits of Liability beyond the Limits of Liability available on your Certificate of Insurance, nor extend your Certificate Period. Claims for any negligent act, error, omission or Personal Injury which are first received and reported during an Extended Reporting Period, if applicable, will be deemed to have been made on the last day of the Certificate Period. If you have other insurance against the loss covered by this Policy, this Policy shall be excess over any other valid and collectible insurance and shall then apply only in the amount by which the applicable Limit of Liability of this Policy exceeds the sum of the applicable Limit of Liability of all such other insurance. This provision will not apply if you have other insurance with the Company, or one of its affiliates. In this event, you must elect the Policy under which the Claim will be made. In the event a Registered Representative or their estate wishes to purchase this additional Extended Reporting Period, an Extended Reporting Period Election form and payment must be submitted to CalSurance Associates within sixty (60) days of the Termination of Coverage (See Contact Information Question 4). 21. What Professional Services does the Policy cover? Coverage under the Policy applies to Claims arising out of the rendering or failing to render Professional Services for others as a Registered Representative, licensed life, accident and health agent, broker, or notary public, while there is in effect a valid contract between the Registered Representative and H. Beck, Inc. Professional Services shall mean the following, provided the Registered Representative is approved by H. Beck, Inc. to engage in such activities. In the event a Registered Representative has requested and has been approved for extended prior acts, Professional Services shall also include products or services of the Registered Representative s prior broker-dealer provided the product/service was/is on the approved product list or was an approved service of H. Beck, Inc.: 1. The solicitation, sale or servicing of: a. Life insurance, accident and health insurance (including Blue Cross/Blue Shield Organizations), managed health care organization contracts, disability income insurance, and fixed or indexed annuities; b. Employee benefit plans, other than Placement of Coverage with Multiple Employer Welfare Arrangements, including but not limited to, Self-Funded Plans, group plans, group or ordinary pension or profit sharing plans, retirement annuities, life, accident and health, and/or disability plans; c. Pharmacy benefit management plans either approved by Centers for Medicare and Medicaid Services or that are sold in conjunction with a group or individual medical plan; d. Workers compensation as part of a 24-hour accident and health insurance product; HBI-FAQ v1 CalSurance Associates, 10 of 14

11 What Professional Services does the Policy cover (continued)? e. Securities, including variable annuities, equities, fixed income instruments, options, investment companies, certificates of deposit, exchange funds, 529 Plans, publicly registered offerings and private placement Securities sold by a Registered Representative through H. Beck, Inc.; 2. Notary public services. 3. Financial Planning Activities which shall mean the recommendation or preparation of a financial program for a client involving the client s present and anticipated assets and liabilities, and shall include recommendations regarding savings, investments, insurance, anticipated retirement, estate planning or other employee benefits. 4. The consultation with participants in an employee benefit plan in order to explain the provisions of such plan and the administration and handling of day-to-day ministerial functions required by such plan, including without limitation; enrollment, record keeping and filing reports with governmental agencies; or 5. Investment Advisory Services which shall mean advisory services provided by an Associated Person of H. Beck, Inc. pursuant to the Investment Advisors Act of 1940 (any amendments thereto) or any applicable state law; Coverage under the Policy also applies to Claims arising out of a negligent act, error or omission of a Registered Principal s training or supervising anyone in the conduct of their profession as listed above. Unaffiliated Registered Investment Advisors (subject to a $5,000 Damages and Defense Costs deductible and an amended definition of Professional Services as outlined in Question 28). Life Settlements (subject to a $10,000 Damages and Defense Costs deductible). The purchase or sale of or the giving of advice regarding life settlements arranged through a provider or broker approved by H. Beck, Inc. provided that: All beneficiaries of the life insurance policy must agree and sign a waiver acknowledging that the life settlement will occur; All joint policyholders of the life insurance policy must agree and sign a waiver stating their agreement with the purchase and sale agreement of the life settlement; All Registered Representatives purchasing coverage provided by this endorsement must be licensed by FINRA (formerly the NASD) with a series 7 registration; The life settlement transaction complies with the rules and guidelines of H. Beck Inc. s Compliance Department; and The life settlement does not involve terminally ill clients. HBI-FAQ v1 CalSurance Associates, 11 of 14

12 What Professional Services does the Policy cover (continued)? The Policy does not apply to any Claim based upon, arising out of, or attributable to an Insured Selling Away. 22. Am I covered for the fixed life, accident, and health products I may do business with outside of H. Beck, Inc.? Yes, provided you: have a valid contract in effect with H. Beck, Inc.; and are appropriately licensed; and have an Outside Business Activities form accepted by H. Beck, Inc. s Compliance Department disclosing this activity before transacting outside business; and the act occurred prior to your Termination of Coverage under this Policy and after your Retroactive Date. However, be aware the deductible for outside covered products (excluding Securities ) is $2, Does the Policy provide coverage for Claims related to the insolvency of an insurance carrier? The Policy excludes coverage for Claims alleging, arising out of, based upon or attributable to any bankruptcy, insolvency, conservatorship, receivership or liquidation of, or suspension of payment or refusal to pay by any broker or dealer in securities or commodities, clearing agency, or any bank or banking firm, or any insurance or reinsurance entity or any Insured ; However, this exclusion shall not apply if the Claim is based upon a negligent act, error or omission or Personal Injury solely in connection with any Insured s investment on behalf of the claimant in the stock of any of the foregoing entities and Claims based upon, arising out of, due to or involving, directly or indirectly, the insolvency, receivership, bankruptcy, liquidation, or financial inability to pay of, or suspension of payment by, any insurance company that was rated A- or better by A.M. Best Company at the time of placement of such insurance coverage or bond. 24. Is the sale and servicing of property/casualty products covered? No. 25. Am I covered to render Professional Accounting Services? No. However coverage for this activity can be added subject to review and approval of an application per Registered Representative. For an application and coverage guidelines, please contact CalSurance Associates (see Question 4.) HBI-FAQ v1 CalSurance Associates, 12 of 14

13 26. Am I covered for my activities as a financial planner? Yes. Coverage is provided for Financial Planning Activities provided you are approved by H. Beck, Inc. to engage in such activity and have the appropriate registration, whether or not a fee is charged, including the recommendation or preparation of a financial program for a client involving the client s present and anticipated assets and liabilities, and shall include recommendations regarding savings, investments, insurance, anticipated retirement, estate planning or other employee benefits. 27. Am I covered as an Investment Advisor Representative of H. Beck, Inc. s RIA? Yes. You are covered for your Investment Advisory Services conducted through H. Beck s Inc. s Registered Investment Advisor. Coverage is provided for advisory services pursuant to the Investment Advisors Act of 1940 (any amendments thereto) and shall include: The creation and giving of a financial plan or investment management contract; Asset Management or asset allocation services; or Referral of no load mutual funds. 28. Am I covered as an approved unaffiliated Registered Investment Advisor? You are covered for rendering or failing to render Professional Services for others in your conduct as an approved, unaffiliated Registered Investment Advisor while you are contracted with H. Beck, Inc. and such negligent act, error or omission occurred on or after your Retroactive Date and before the end of your Certificate Period. Professional Services with respect to approved, unaffiliated Registered Investment Advisors are limited to the following: Professional Services means the following services if rendered in connection with an Approved Activity : The purchase or sale of Securities, including investment companies The purchase or sale of annuities or variable annuities The purchase or sale of life or accident and health insurance providing brokerage services for individual retirement accounts (IRA s), Keogh retirement plans and employee benefit plans (other than multiple employer or multi-employee welfare arrangements) services performed as a Registered Investment Advisor Approved Activity means a service or activity performed by the Registered Representative in his/her capacity as a Registered Investment Advisor that: has been approved by H. Beck, Inc., and is HBI-FAQ v1 CalSurance Associates, 13 of 14

14 Am I covered as an approved unaffiliated Registered Investment Advisor (continued)? in connection with the purchase or sale of a specific security, annuity or insurance product which has been approved by H. Beck, Inc. to be transacted through the Registered Representative, and for which the Registered Representative has obtained all licenses required by H. Beck, Inc. or applicable law or regulation. The Registered Representative s coverage is limited under the unaffiliated Registered Investment Advisor to extend only to the following Insureds : Any corporation, partnership or other business entity which engages in Professional Services and which is either owned or controlled by the Registered Representative or in which the Registered Representative is an employee, and then only with respect to those operations of the business entity related to the Professional Services provided by the Registered Representative ; Heirs, executors, administrators or legal representatives of the Registered Representative in the event of the Registered Representative s death, incapacity or bankruptcy; and The spouse of a Registered Representative but only for a Claim arising solely out of their status as such, and where such Claim seeks damages from marital community property, jointly held property or property transferred from the Registered Representative to the spouse. No coverage is provided for any Claim arising out of a negligent act, error or omission of a spouse or any Personal Injury offense committed by a spouse. For purposes of this Subsection, the term spouse shall include any natural person qualifying as a domestic partner under any applicable federal, state, local or foreign law. Those individuals or entities listed above share in the per Claim and Aggregate Limit of Liability of the Registered Representative. They do not have a separate Limit of Liability. There is no coverage under the approved unaffiliated Registered Investment Advisor for acts committed by anyone not an Insured under the Policy. Be aware that there is a $5,000 deductible applicable to both Damages and Defense Costs. (Please see the Exclusions for limitations regarding discretionary authority.) HBI-FAQ v1 CalSurance Associates, 14 of 14