FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION PRIMARY FIDUCIARY LIABILITY INSURANCE PROPOSAL

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1 INSURANCE COMPANY AIG (National Union Fire Insurance Company of Pittsburg, PA AIG (National Union Fire Insurance Company of Pittsburg, PA A.M. BEST S RATING A+, Superior; Financial Size Category XV ($2,000,000,000 or more) A+, Superior; Financial Size Category XV ($2,000,000,000 or more) as of February 14, 2008 STANDARD & POORS RATING AA+ (Very Strong) AA+ (Very Strong) as March 30, 2005 CALIFORNIA STATUS Admitted Admitted POLICY PERIOD April 30, 2007 to April 30, 2008 April 30, 2008 to April 30, 2009 CONTINUNITY DATE April 30, 2004 April 30, 2004 COVERAGE PROVIDED Primary Fiduciary Liability for Public Employers policy on CLAIMS MADE FORM. Coverage is provided for: Breach of fiduciary duty Counseling employees on an insured Plan Same as Present Page 1 of 6

2 Providing interpretations on an insured Plan Handling records on an insured Plan Activities effecting enrollment, termination or cancellation of participants or beneficiaries on an insured Plan INSURED PLANS Fresno County Employees Retirement Association Fresno County Employees Retirement Association LIMITS $10,000,000 Annual Aggregate including defense costs, charges and expenses $ 100,000 Sublimit of Liability for CAP Penalties $10,000,000 Annual Aggregate including defense costs, charges and expenses $ 100,000 Sublimit of Liability for CAP Penalties Page 2 of 6

3 ENDORSEMENTS Named Plan Endorsement: Fresno County Employee s Retirement Association CA Cancellation/Non-Renewal Endorsement Public Employer-Plan Trustee Endorsement Retention Endorsement: $100,000 Appendix A Employee Benefit Plan Fiduciary Liability Panel Counsel Terrorism Exclusion Waiver of Recourse (if purchased) OFAC Endorsement Forms Index Endorsement HIPAA Extension $25,000 Specific Claims Exclusion: County of Fresno v. Board of Retirement of the County of Fresno; Fresno County Employees Retirement Association Case No. 03 CE CG 01569; Government Claim of Linzie L. Danie Claim #086FRT NR / #086-FR-T RG and all related matters Specific Claim Exclusion: Claim # Letter dated 04/29/05; Claim # Alberto Mestas Carlos Same as Present Page 3 of 6

4 DEDUCTIBLE $100,000 Per claim including defense costs $100,000 Per claim including defense costs PREMIUM $114,343 $ 250 $114,765 Annual Premium (10) Waivers of Recourse Total Premium $114,859 $118,305 Annual premium without TRIA* Annual premium with TRIA* *Does not include Waivers of Recourse DISCOVERY PERIOD EXTENSION OPTION 1 (for policy period from 4/30/2008 to 5/31/2009) Twelve months available for 75% additional premium if the Company or the Insured terminates or cancels Aggregate Limit Sublimit for CAP Penalties Premium with TRIA* Premium without TRIA* $10,000,000 $100,000 $128,357 $124,619 Twelve months available for 75% additional premium if the Company or the Insured terminates or cancels QUOTE VALIED UNTIL Not applicable April 30, 2008 BINDING CONDITIONS: No longer applicable Written request to bind coverage Page 4 of 6

5 Completed, signed and dated Policyholder Disclosure indicating decision to accept or reject Terrorism Attached Notification of acceptance of Waiver of Recourse with number of trustees and names Please note that the information above is required prior to binding coverage. The company is not required to bind coverage prior to receipt, review and underwriting approval of the above information. However, if the Company does bind coverage prior to such approval, it shall be for a temporary period of not more then 30 days. Such temporary binding of coverage shall be null and void ab initio ( from the beginning ) if they have not received reviewed and approved in writing such materials within 30 days from the effective date of the temporary binder. This 30 day temporary conditional binder may be extended only in writing by the Insurer. Payment of premium shall not operate to extend the binding period or nullify the automatic voiding as described above. This indication is strictly conditional upon no material change in the risk occurring between the date of this proposal and the inception date of the proposed policy. In the event of such change in risk, the Insurer may in its sole discretion, whether or not this indication has been already accepted by the Insured, modify and/or withdraw this indication. Page 5 of 6

6 DATE PREPARED April 28, 2008 BROKER ALLIANT INSUANCE SERVICES, INC. Newport Beach CA Ralph Hurst, Vice Chairman Valentin Torres, Account Representative Sunny Schrimsher, Account Representative Commissions are customarily paid by the insurance carriers to their agents and to brokers as a percentage of premiums. In addition to the commissions that Driver Alliant receives, its related entity, Alliant Specialty Insurance Services, Inc. ("ASIS") may receive compensation from Driver Alliant and/or the carrier for providing underwriting services. The financial impact of the compensation received by ASIS is a cost included in the premium. Additionally, the related entities of Driver Signature Services and/or Strategic HR may receive compensation from Driver Alliant and/or the carrier for providing designated, value-added services. Services contracted for by the client directly will be invoiced accordingly. Otherwise, services will be provided at the expense of Driver Alliant and/or the carrier. Further information is available upon written request directed to: Driver Alliant Insurance Services, Attention: Chief Operating Officer, 1620 Fifth Avenue, San Diego, CA Analyzing insurers over-all performance and financial strength is a task that requires specialized skills and in-depth technical understanding of all aspects of insurance company finances and operations. Insurance brokerages such as Driver Alliant typically rely upon rating agencies for this type of market analysis. Both A.M. Best and Standard and Poor have been industry leaders in this area for many decades, utilizing a combination of quantitative and qualitative analysis of the information available in formulating their ratings. A.M. Best has an extensive database of nearly 6,000 Life/Health, Property Casualty and International companies. You can visit them at For additional information regarding insurer financial strength ratings visit Standard and Poor s website at To learn more about companies doing business in California, visit the California Department of Insurance website at NOTE: THIS PROPOSAL IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT AMEND, EXTEND OR ALTER THE POLICY IN ANY WAY. PLEASE REFER TO THE POLICY FORM FOR COMPLETE COVERAGE AND EXCLUSION INFORMATION. Page 6 of 6