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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST ACTUARIAL REPORT Estimated Reserves as of 12/31/06

NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

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Page 1: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

NEW YORK HEALTHCARE FACILITIES WORKERS

COMPENSATION TRUST

ACTUARIAL REPORTEstimated Reserves as of 12/31/06

Page 2: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

Suite 100 • 9055 Land Grant Place • Brentwood, TN 37027 • 615.369.0753 • 615.369.0754 fax [email protected] • www.bynac.com

April 20, 2009 Mr. Christopher J. Rosetti, CPA, CFE Partner BST Valuation & Litigation Advisors, LLC 26 Computer Drive West Albany, NY 12205 Dear Mr. Rosetti: Enclosed are one unbound and two bound copies of the actuarial report prepared for New York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06 for claims incurred prior to that date. The estimates contained in this report are based on data provided by NCA Comp, BST Valuation & Litigation Advisors, LLC (BST), and Milliman USA. These data and the associated assumptions should be reviewed for their consistency with the internal records of NYHCF. Any discrepancy in the completeness, interpretation, or accuracy of the information used may require a revision to this report. If you have any questions, please call or write. It is a pleasure to be of service to BST. Sincerely,

Lisa Dennison, FCAS, FCA, MAAA President and Consulting Actuary

Mary Jean King, FCAS, FCA, MAAA Consulting Actuary enclosure

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Page 3: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

ACTUARIAL REPORT

TABLE OF CONTENTS

PURPOSE........................................................................................................................... 1

FINDINGS.......................................................................................................................... 2

ESTIMATED REQUIRED RESERVES........................................................................ 2 COMPARISON TO PRIOR REPORT........................................................................... 4

ASSUMPTIONS................................................................................................................. 7

DEFINITIONS................................................................................................................ 7 HISTORICAL INFORMATION.................................................................................... 7 RETENTIONS................................................................................................................ 8

RESERVE ANALYSIS.................................................................................................... 10

OVERVIEW ................................................................................................................. 10 INCURRED LOSS DEVELOPMENT ......................................................................... 11 PAID LOSS DEVELOPMENT .................................................................................... 16 SELECTED ESTIMATED ULTIMATE INCURRED LOSSES ................................. 16 ESTIMATED REQUIRED RESERVES ...................................................................... 16 DISCOUNTED ESTIMATED REQUIRED RESERVES............................................ 24

HISTORICAL PROFITABILITY ANALYSIS ............................................................... 27

QUALIFICATIONS AND LIMITATIONS..................................................................... 33

CONSULTATION............................................................................................................ 35

APPENDICES

INCURRED LOSSES $250,000 AND GREATER ......................................................... 36

AVERAGE SEVERITIES................................................................................................ 38

LOSSES IN EXCESS OF AGGREGATE RETENTION................................................ 40

ESTIMATED ULAE AND ASSESSMENT RESERVES............................................... 45

ESTIMATED REQUIRED RESERVES AS OF 7/31/06 ................................................ 50

ESTIMATED REQUIRED RESERVES AS OF 12/31/06 - HIGH................................. 59

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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

ACTUARIAL REPORT

PURPOSE

By the Numbers Actuarial Consulting, Inc. (BYNAC) prepared this actuarial report to present a

professional analysis of the required reserves retained by New York Healthcare Facilities

Workers Compensation Trust (NYHCF) as of 12/31/06 for claims incurred from 1/1/97 through

12/31/06. The required reserves are estimated excluding and including the effects of anticipated

investment income earned on the reserves until they are paid.

The estimated required reserves are based on estimates of ultimate incurred losses. Ultimate

incurred losses are defined to be the amounts that will be paid to settle all claims occurring

during a policy period. These estimates include a provision for the subsequent development of

known claims and for claims incurred but not yet reported. Incurred but not reported (IBNR)

losses are defined throughout this report to include the additional development on known claims

in addition to claims incurred but not yet reported.

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Page 5: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

FINDINGS

The findings are the product of loss experience, actuarial assumptions, quantitative analysis, and

professional judgment. The estimated required reserves are expressed in terms of ranges that

indicate the reliance on assumptions believed to be reasonable and are subject to all the

limitations expressed herein.

ESTIMATED REQUIRED RESERVES

The required reserves shown in the following table should be used for financial statement

reporting as of that date. These estimates reflect the terms of the specific and aggregate excess

insurance purchased for the policy periods reviewed. However, until all the claims that occurred

on or before 12/31/06 are closed, the actual reserve need remains an estimate. While the

experience of NYHCF indicates that the required reserves will fall within the range established

in this report, the possibility exists that extraordinary or unexpected circumstances could cause

the actual reserve need to be less than or greater than the range. Therefore, the findings cannot

be warranted or guaranteed.

ESTIMATED LOSS AND ALAE RESERVESINCLUDING IBNR FOR 7/1/97-12/31/06 AS OF 12/31/06

Low Expected High

Undiscounted forInvestment Income $16,700,000 $20,270,000 $23,800,000

Discounted at 3.0% perAnnum 15,350,000 18,630,000 21,890,000

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Page 6: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

ESTIMATED ULAE RESERVESFOR 7/1/97-12/31/06 AS OF 12/31/06

Low Expected High

Undiscounted forInvestment Income $2,140,000 $2,600,000 $2,870,000

Discounted at 3.0% perAnnum 1,970,000 2,390,000 2,640,000

ESTIMATED ASSESSMENT RESERVESFOR 7/1/97-12/31/06 AS OF 12/31/06

Low Expected High

Undiscounted forInvestment Income $7,370,000 $8,940,000 $9,850,000

Discounted at 3.0% perAnnum 6,770,000 8,220,000 9,050,000

The low and high figures are judgmental and not intended to establish absolute minimums or

maximums on the estimates, but rather to depict a reasonable range for the establishment of loss

reserves in this particular situation. Figure 1 contains a graphical representation of the estimated

retained loss experience as of 12/31/06 including the undiscounted expected loss reserves for

NYHCF.

As noted, the reserves are estimated on both undiscounted and discounted for investment income

bases. The discount rate of 3.0% per year is shown for illustrative purposes only. BYNAC has

not verified that this rate is appropriate for NYHCF. Establishing loss reserves on a discounted

basis requires that future investment income earned on the loss reserves be added to the reserves

to strengthen them rather than recognized as net income. It also assumes that assets equal to the

present value of the reserves are available for investment as of the 12/31/06 evaluation date. The

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Page 7: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

accuracy of discounted reserves depends upon the accuracy of the undiscounted estimates, the

estimated payout schedule, and the interest rate assumption used to discount the loss payout

schedule. If the discounted estimate is used, the management of NYHCF should carefully

review each of these assumptions to assure that they are in agreement with them.

COMPARISON TO PRIOR REPORT

The ultimate incurred losses estimated in this report are compared to Milliman USA’s

(Milliman’s) 4/11/06 actuarial report in the following table and Figure 2. As shown, the

estimates increased $4,517,654 or 11.4% from the prior report. The increase in the 1/1-12/31/99

through 1/1-12/31/01 and 1/1-12/31/03 periods is due to incurred losses as of 12/31/06 greater

than the prior estimate of ultimate incurred losses.

COMPARISON OF ESTIMATED ULTIMATE INCURREDLOSSES TO PRIOR REPORT

(Limited to Specific and Aggregate Retentions)

CurrentReport Milliman's

Policy (Section B of 4/11/06 PercentPeriod Table 6) Report Change Change

7/1-12/31/97 $ 361,786 $ 457,258 ($ 95,472) (20.9%)1/1-12/31/98 1,237,032 1,081,342 155,690 14.4%1/1-12/31/99 5,364,820 4,363,372 1,001,448 23.0%1/1-12/31/00 5,555,268 5,388,002 167,266 3.1%1/1-12/31/01 6,600,234 6,198,728 401,506 6.5%1/1-12/31/02 4,563,159 4,602,444 ( 39,285) ( 0.9%)1/1-12/31/03 8,007,299 6,437,986 1,569,313 24.4%1/1-12/31/04 5,318,355 5,242,777 75,578 1.4%1/1-12/31/05 7,111,241 5,829,631 1,281,610 22.0%

Total $44,119,194 $39,601,540 $4,517,654 11.4%

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NEW YORK HEALTHCARE FACILITIESWORKERS COMPENSATION TRUST

Figure 1

ESTIMATED ULTIMATE RETAINED LOSSES(Limited to Specific and Aggregate Retentions)

0.4

1.2

5.45.6

6.6

4.6

8.0

5.3

7.1

3.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Policy Period Incepting January 1

0.0

2.0

4.0

6.0

8.0

10.0$ Millions

Paid Case Estimated IBNR

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NEW YORK HEALTHCARE FACILITIESWORKERS COMPENSATION TRUST

Figure 2

COMPARISON OF ESTIMATED ULTIMATE INCURRED LOSSES TO PRIOR REPORT(Limited to Specific and Aggregate Retentions)

0.4

1.2

5.45.6

6.6

4.6

8.0

5.3

7.1

0.5

1.1

4.4

5.4

6.2

4.6

6.4

5.2

5.8

1997 1998 1999 2000 2001 2002 2003 2004 2005

Policy Period Incepting January 1

0.0

2.0

4.0

6.0

8.0

10.0$ Millions

Current Paid Current Case Current IBNRPrior Paid Prior Case Prior IBNR

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Page 10: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

ASSUMPTIONS

DEFINITIONS

Losses in this report include ALAE. ALAE are those expenses that can be directly attributed to a

specific claim, such as litigation costs. Loss adjustment expenses that cannot be directly

associated with an individual claim are known as ULAE. Reserves for unearned premiums,

unpaid administrative expenses, contingencies, catastrophes, or future premium deficiencies are

not included in the estimates.

HISTORICAL INFORMATION

For the periods under review, NYHCF has assumed its members’ losses according to the New

York workers compensation statutes. NYHCF’s unique development patterns are used in

conjunction with industry experience to estimate the ultimate losses expected to be incurred by

NYHCF for the periods analyzed in this report. The industry data includes experience of other

New York self-insured workers compensation groups and information published by the National

Council on Compensation Insurance, Inc. (NCCI) in the 2006 edition of Annual Statistical

Bulletin. This methodology assumes that the historical and industry development patterns are

indicative of the future development expected for the periods considered.

All data are based on information provided by BST Valuation and Litigation Advisors, LLC

(BST), Milliman, and NCA Comp (NCA). The 12/31/06 loss run is used as the basis for the

current evaluation of loss. In addition, Milliman provided loss data for claims closed by a prior

third-party administrator that have not been transferred to subsequent administrators. Milliman

identified duplicate claims which have been excluded from the data. BYNAC compared the data

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Page 11: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

to NCA’s loss run. A minimal amount of duplicates were identified by BYNAC and removed.

It is difficult to ascertain the completeness of the data. These data are reviewed for

reasonableness and used without audit. It is assumed that all data provided is complete and

accurate.

Four different firms have adjusted NYHCF’s claims. Crawford adjusted the claims from

inception until the fall of 2001 when Network Adjusters was retained. Specialty Risk Services,

Inc. (SRS) replaced Network Adjusters in August, 2002. NCA has adjusted the claims since

August, 2006. Each third-party administrator (TPA) employed different philosophies with

respect to closing claims and case reserving. As a result of the TPA changes, NYHCF does not

have consistent historical incurred loss development data. Therefore, BYNAC has relied on

industry incurred loss development factors to estimated ultimate incurred losses for the incurred

method.

RETENTIONS

NYHCF’s specific retentions are summarized in the following table. As of 12/31/06, numerous

claims are reported in excess of the specific retention. The aggregate retention is expected to be

exceeded in each of the 7/1/98-99 through 7/1/01-7/31/04 periods. The limit is expected to be

exhausted or almost exhausted in each of these periods. As almost $11,000,000 is ultimately

expected to be recovered on losses exceeding the aggregate retention in the 7/1/98-99 through

7/1/02-7/31/04 policy periods, the retentions are a critical part of the analysis. BYNAC

understands that the aggregate retentions shown are audited and have been provided by the

carrier.

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Page 12: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

EXCESS INSURANCE SUMMARY

Policy Specific Specific Aggregate AggregatePeriod Retention Limit Retention Limit ALAE Carrier

7/1/97-98 $ 250,000 Statutory $ 2,500,000 $ 1,000,000 Prorata Zurich7/1/98-99 250,000 Statutory 2,500,000 1,000,000 Prorata Zurich

7/1/99-6/30/02 250,000 Statutory 16,228,000 5,000,000 Including Hartford7/1/02-7/31/04 350,000 Statutory 12,082,000 5,000,000 Including Hartford

8/1/04-05 5 00,000 Statutory None Including National Union8/1/05-06 5 00,000 Statutory None Including National Union

* Minimum.

The retentions are a critical part of this analysis. It is assumed that the excess insurance will be

collectible on all claims that ultimately develop beyond the retentions. An analysis of the

collectibility of the excess insurance is beyond the scope of this report.

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Page 13: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

RESERVE ANALYSIS

OVERVIEW

To estimate the required reserves, it is first necessary to estimate the ultimate value of the prior

periods based on the current evaluation of loss after limiting the losses to the appropriate

retention. Required reserves are estimated as the difference between the ultimate incurred and

paid losses. The historical payment pattern is analyzed and quantified to determine a unique

payout schedule for NYHCF. This schedule is used to predict when the required reserves will be

paid so that the losses may be discounted to their present value.

Two procedures are used to estimate the ultimate incurred losses to provide a check for

reasonableness and consistency. Following is a brief description of each method and the

circumstances under which each works best.

Incurred loss development is the most widely used method of estimating ultimate incurred losses.

By using the reserves on a claim-by-claim basis, the most recent claims adjusters’ estimates are

included in the analysis in addition to the cumulative paid losses. Inherent in the incurred loss

development technique is the assumption that there are no changes in reserving practices.

A paid loss approach attempts to eliminate distortions that can occur in incurred methods when

there is a suspected change in reserving procedures. Inherent in paid loss development

techniques is the assumption that there are no changes in claims settlement practices.

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Page 14: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

INCURRED LOSS DEVELOPMENT

The ultimate cost of claims incurred for a specific time period is usually not known until several

years after the close of that period. Loss development factors project the additional cost

expected on claims. These factors quantify the late developing aspects of certain losses, such as

claims involving medical complications not recognized in the early stages of treatment or verdict

values for litigated claims that are different than the amount previously reserved to pay the

claims. They also account for losses that occurred during the policy period but are not reported

until a later date.

The calculation and selection of development factors to be applied to incurred losses are shown

in Table 1, beginning with NYHCF’s unlimited losses including ALAE as of different evaluation

dates. For example, Section A of the table shows losses incurred during the 1/1-12/31/00 period

evaluated as of 36, 48, 60, 72, and 84 months after the inception of that period. In general, the

value of incurred losses increases from one evaluation to the next as a result of IBNR.

Section B displays age-to-age factors, the rates by which losses develop from year to year. For

example, the 12 to 24 age-to-age factor for the 1/1-12/31/02 period is 1.878. This is the 24

month incurred amount of $2,531,653 divided by the 12 month incurred amount of $1,347,746.

The age-to-age factor of 1.878 means that losses incurred during the 1/1-12/31/02 period

increased by 87.8% during the 12 to 24 month interval. A loss development factor less than

1.000 indicates that the value of incurred losses declined, possibly due to claims settling for

amounts less than previously reserved.

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Page 15: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

Table 1

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

INCURRED LOSS DEVELOPMENT FACTORS(Unlimited Losses Including ALAE)

A. INCURRED LOSSES

Age of Policy PeriodPolicy 12 24 36 48 60 72 84 96 108 120 132Period Months Months Months Months Months Months Months Months Months Months Months

7/1-12/31/97 368,671 402,971 403,574 402,099 361,7861/1-12/31/98 1,143,242 1,261,173 1,241,914 1,272,361 1,550,9831/1-12/31/99 3,544,306 4,286,520 4,560,793 4,676,756 6,710,9051/1-12/31/00 3,090,180 3,989,471 4,595,276 4,955,502 8,838,2431/1-12/31/01 2,615,692 4,230,748 5,171,805 5,728,892 10,539,8821/1-12/31/02 1,347,746 2,531,653 3,402,015 4,103,041 7,378,2261/1-12/31/03 2,302,762 3,808,620 4,945,366 8,881,3741/1-12/31/04 1,478,640 2,360,909 4,139,7871/1-12/31/05 1,319,938 3,647,5751/1-7/31/06 1,131,483

B. AGE-TO-AGE FACTORS

Policy 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 84 to 96 96 to 108 108 to 120 120 to 132 132 toPeriod Months Months Months Months Months Months Months Months Months Months Ultimate

7/1-12/31/97 1.093 1.001 0.996 0.9001/1-12/31/98 1.103 0.985 1.025 1.2191/1-12/31/99 1.209 1.064 1.025 1.4351/1-12/31/00 1.291 1.152 1.078 1.7841/1-12/31/01 1.617 1.222 1.108 1.8401/1-12/31/02 1.878 1.344 1.206 1.7981/1-12/31/03 1.654 1.298 1.7961/1-12/31/04 1.597 1.7531/1-12/31/05 2.763

Average 1.973 1.503 1.379 1.317 1.271 1.222 1.154 1.108 0.900Wtd Avg 1.915 1.477 1.413 1.308 1.353 1.360 1.327 1.165 0.9003 Yr Avg 2.005 1.465 1.408 1.353 1.327 1.265 1.154NY NCCI 1.552 1.245 1.136 1.076 1.052 1.030 1.021 1.016 1.014 1.011 1.134NY Groups 1.520 1.230 1.120 1.080 1.055 1.050 1.040 1.030 1.020 1.015 1.034Selected 1.540 1.240 1.130 1.080 1.050 1.040 1.030 1.020 1.020 1.010 1.080

C. INCURRED LOSS DEVELOPMENT FACTORS

12 to 24 to 36 to 48 to 60 to 72 to 84 to 96 to 108 to 120 to 132 toUltimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ult imate Ultimate Ultimate

2.975 1.932 1.558 1.379 1.277 1.216 1.169 1.135 1.113 1.091 1.080

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Page 16: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

Averages of the age-to-age factors are shown at the bottom of Section B. The average is the

mean of all the age-to-age factors. The weighted average weights the factors for individual years

by the magnitude of losses for that given year, giving more weight to periods with higher losses.

The weighted average is the sum of the losses from one age divided by the sum of the losses

from the previous age for corresponding periods. The three-year average is the average of the

three most recent factors. The NY NCCI factor is the factor for New York published by the

NCCI. The NY Groups factor is based on experience of other New York workers compensation

self-insured groups. The averages are evaluated, and the factors selected as most representative

of NYHCF’s expected loss development are shown. The historical and expected loss

development patterns are graphically illustrated in Figure 3 by solid and dashed lines,

respectively.

Computation of the loss development factors in Section C is based on the selected age-to-age

factors. For instance, the 12 to ultimate factor is calculated by multiplying the 12 to 24 month

age-to-age factor by the 24 to ultimate loss development factor (2.975 = 1.540 x 1.932).

In Section A of Table 2, incurred losses are limited to the specific retentions. As shown,

numerous claims are currently reported excess of the retention. Ultimate incurred losses are

estimated in Section B by multiplying the limited incurred losses by the loss development

factors. For example, limited incurred losses for the 1/1-7/31/06 period evaluated at $1,131,483

on 12/31/06 are estimated to ultimately cost $2,958,828 ($1,131,483 x 2.615). The loss

development factor of 2.615 means that the losses are expected to ultimately cost 161.5% more

than incurred losses evaluated on 12/31/06.

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NEW YORK HEALTHCARE FACILITIESWORKERS COMPENSATION TRUST

Figure 3

HISTORICAL AND EXPECTED DEVELOPMENT OF INCURRED LOSSES(Unlimited Losses Including ALAE)

12 24 36 48 60 72 84 96 108 120*

Age of Policy Period in Months

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0$ Millions

1/1-12/31/051/1-12/31/04

1/1-12/31/99

* Additional development of 9.1% is expected after 120 months.

1/1-12/31/00

1/1-12/31/06

1/1-12/31/01

1/1-12/31/02

1/1-12/31/03

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Table 2

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED ULTIMATE INCURRED LOSSESINCURRED LOSS DEVELOPMENT

A. LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedIncurred Claims in Incurred in Incurred

Policy Losses as Specific Excess of Excess of Losses asPeriod of 12/31/06 Retention* Retention Retention of 12/31/06

7/1-12/31/97 $ 361,786 $ 250,000 0 $ 0 $ 361,7861/1-12/31/98 1,550,983 250,000 0 0 1,550,9831/1-12/31/99 6,710,905 250,000 6 636,072 6,074,8331/1-12/31/00 8,838,243 250,000 10 2,264,823 6,573,4201/1-12/31/01 10,539,882 250,000 14 2,989,009 7,550,8731/1-12/31/02 7,378,226 250,000 # 4 2,016,148 5,362,0781/1-12/31/03 8,881,374 350,000 3 703,324 8,178,0501/1-12/31/04 4,139,787 350,000 ## 0 0 4,139,7871/1-12/31/05 3,647,575 500,000 0 0 3,647,5751/1-7/31/06 1,131,483 500,000 0 0 1,131,483

Total $53,180,244 37 $8,609,376 $44,570,868

B. ESTIMATED ULTIMATE INCURRED LOSSES

Limited Age of Incurred EstimatedIncurred Policy Loss Ultimate

Policy Losses as Period in Development IncurredPeriod of 12/31/06 Months Factor Losses^

7/1-12/31/97 $ 361,786 117.0 1.096 $ 396,5171/1-12/31/98 1,550,983 108.0 1.113 1,726,2441/1-12/31/99 6,074,833 96.0 1.135 6,692,4351/1-12/31/00 6,573,420 84.0 1.169 7,261,8281/1-12/31/01 7,550,873 72.0 1.216 8,425,8621/1-12/31/02 5,362,078 60.0 1.277 6,542,6741/1-12/31/03 8,178,050 48.0 1.379 10,879,5811/1-12/31/04 4,139,787 36.0 1.558 6,449,7881/1-12/31/05 3,647,575 24.0 1.932 7,047,1151/1-7/31/06 1,131,483 14.5 2.615 2,958,828

Total $44,570,868 $58,380,872

# Changed to $350,000 7/1/02.## Changed to $500,000 7/1/04.

^ Did not develop excess claims.

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PAID LOSS DEVELOPMENT

The paid loss procedure employs an analysis similar to the previous method, but based on paid

loss data. This estimation technique is not influenced by changes in the loss reserve estimates of

the adjusters. However, larger development factors are required at a given age than the incurred

method. This analysis is shown in Table 3, Figure 4, and Table 4.

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES

The results of the methods are compared in Table 5, and the ultimate incurred losses are selected

for each period. Incurred losses are selected for 1/1-12/31/97 since only one claim is open. The

incurred method is selected for 1/1-12/31/99 due to the period’s maturity. The incurred method

is selected for 1/1-7/31/06 due to its immaturity. An average is selected for the remaining

periods since neither method is deemed biased. The selection procedure is depicted in Figure 5.

ESTIMATED REQUIRED RESERVES

The aggregate retention is reflected in Table 6. Estimated ultimate incurred, incurred, and paid

losses in excess of the aggregate retentions are shown in Section A. Losses limited to the

aggregate retention are shown in Section B.

The required reserves are estimated in Table 7. The estimated ultimate incurred, incurred, and

paid losses retained by NYHCF are summarized in Section A. In Section B, the case reserves

are shown as the difference between the incurred and paid losses. IBNR is estimated as the

difference between the estimated ultimate incurred losses and incurred losses. The total required

16

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Table 3

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

PAID LOSS DEVELOPMENT FACTORS(Unlimited Losses Including ALAE)

A. PAID LOSSES

Age of Policy PeriodPolicy 12 24 36 48 60 72 84 96 108 120 132Period Months Months Months Months Months Months Months Months Months Months Months

7/1-12/31/97 9,949 99,910 144,139 190,384 262,728 331,230 335,008 340,899 347,376 354,3861/1-12/31/98 148,414 512,334 694,619 804,206 914,318 1,033,623 1,107,178 1,142,026 1,262,8751/1-12/31/99 597,662 1,466,106 2,085,426 2,657,138 3,235,501 3,550,343 3,839,078 4,168,9191/1-12/31/00 776,185 1,595,177 2,345,706 3,046,720 3,453,957 3,875,152 4,693,1941/1-12/31/01 472,807 1,716,318 2,658,123 3,407,132 4,132,647 4,747,7411/1-12/31/02 562,293 1,457,585 2,309,174 2,975,525 3,496,3791/1-12/31/03 998,730 2,446,356 3,441,595 4,206,1881/1-12/31/04 611,502 1,569,401 2,328,9741/1-12/31/05 615,662 1,594,5261/1-7/31/06 453,277

B. AGE-TO-AGE FACTORS

Policy 12 to 24 24 to 36 36 to 48 48 to 60 60 to 72 72 to 84 84 to 96 96 to 108 108 to 120 120 to 132 132 toPeriod Months Months Months Months Months Months Months Months Months Months Ultimate

7/1-12/31/97 10.042 1.443 1.321 1.380 1.261 1.011 1.018 1.019 1.0201/1-12/31/98 3.452 1.356 1.158 1.137 1.130 1.071 1.031 1.1061/1-12/31/99 2.453 1.422 1.274 1.218 1.097 1.081 1.0861/1-12/31/00 2.055 1.470 1.299 1.134 1.122 1.2111/1-12/31/01 3.630 1.549 1.282 1.213 1.1491/1-12/31/02 2.592 1.584 1.289 1.1751/1-12/31/03 2.449 1.407 1.2221/1-12/31/04 2.566 1.4841/1-12/31/05 2.590

Average 3.537 1.464 1.264 1.210 1.152 1.094 1.045 1.063 1.020Wtd Avg 2.599 1.474 1.264 1.185 1.128 1.135 1.070 1.086 1.0203 Yr Avg 2.535 1.492 1.264 1.174 1.123 1.121 1.0455 Yr Mid Avg 2.583 1.501 1.282 1.175 1.134NY NCCI 2.524 1.550 1.274 1.177 1.118 1.078 1.057 1.046 1.039 1.032 1.305NY Groups 2.370 1.460 1.220 1.130 1.100 1.070 1.050 1.045 1.035 1.025 1.102Selected 2.560 1.500 1.270 1.200 1.130 1.120 1.060 1.060 1.030 1.030 1.305

C. PAID LOSS DEVELOPMENT FACTORS

12 to 24 to 36 to 48 to 60 to 72 to 84 to 96 to 108 to 120 to 132 toUltimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ultimate Ult imate Ultimate Ultimate

11.520 4.500 3.000 2.362 1.968 1.742 1.555 1.467 1.384 1.344 1.305

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NEW YORK HEALTHCARE FACILITIESWORKERS COMPENSATION TRUST

Figure 4

HISTORICAL AND EXPECTED DEVELOPMENT OF PAID LOSSES(Unlimited Losses Including ALAE)

12 24 36 48 60 72 84 96 108 120*

Age of Policy Period in Months

0.0

2.0

4.0

6.0

8.0$ Millions

1/1-12/31/05

1/1-12/31/04

1/1-12/31/99

* Additional development of 34.4% is expected after 120 months.

1/1-12/31/00

1/1-12/31/06

1/1-12/31/01

1/1-12/31/02

1/1-12/31/03

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Table 4

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED ULTIMATE INCURRED LOSSESPAID LOSS DEVELOPMENT

A. LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedPaid Claims in Paid in Paid

Policy Losses as Specific Excess of Excess of Losses asPeriod of 12/31/06 Retention Retention Retention of 12/31/06

7/1-12/31/97 $ 354,386 $ 250,000 0 $ 0 $ 354,3861/1-12/31/98 1,262,875 250,000 0 0 1,262,8751/1-12/31/99 4,168,919 250,000 0 0 4,168,9191/1-12/31/00 4,815,177 250,000 1 121,983 4,693,1941/1-12/31/01 4,872,024 250,000 1 124,283 4,747,7411/1-12/31/02 3,776,807 250,000 # 1 280,428 3,496,3791/1-12/31/03 4,206,188 350,000 0 0 4,206,1881/1-12/31/04 2,328,974 350,000 ## 0 0 2,328,9741/1-12/31/05 1,594,526 500,000 0 0 1,594,5261/1-7/31/06 453,277 500,000 0 0 453,277

Total $27,833,153 3 $ 526,694 $27,306,459

B. ESTIMATED ULTIMATE INCURRED LOSSES

Limited Age of EstimatedPaid Policy Paid Loss Ultimate

Policy Losses as Period in Development IncurredPeriod of 12/31/06 Months Factor Losses^

7/1-12/31/97 $ 354,386 117.0 1.353 $ 479,4841/1-12/31/98 1,262,875 108.0 1.384 1,747,8191/1-12/31/99 4,168,919 96.0 1.467 6,115,8041/1-12/31/00 4,693,194 84.0 1.555 7,159,1671/1-12/31/01 4,747,741 72.0 1.742 8,085,0651/1-12/31/02 3,496,379 60.0 1.968 6,638,8741/1-12/31/03 4,206,188 48.0 2.362 9,935,0161/1-12/31/04 2,328,974 36.0 3.000 6,986,9221/1-12/31/05 1,594,526 24.0 4.500 7,175,3671/1-7/31/06 453,277 14.5 9.099 4,124,367

Total $27,306,459 $58,447,885

# Changed to $350,000 7/1/02.## Changed to $500,000 7/1/04.

^ Did not develop excess claims.

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Table 5

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES(Limited to Specif ic Retention)

SelectedEstimated

Incurred UltimatePolicy Loss Paid Loss IncurredPeriod Development Development Losses

7/1-12/31/97 $ 396,517 $ 479,484 $ 361,786 ^1/1-12/31/98 1,726,244 1,747,819 1,737,032 *1/1-12/31/99 6,692,435 6,115,804 6,692,435 #1/1-12/31/00 7,261,828 7,159,167 7,210,498 *1/1-12/31/01 8,425,862 8,085,065 8,255,464 *1/1-12/31/02 6,542,674 6,638,874 6,590,774 *1/1-12/31/03 10,879,581 9,935,016 10,407,299 *1/1-12/31/04 6,449,788 6,986,922 6,718,355 *1/1-12/31/05 7,047,115 7,175,367 7,111,241 *1/1-7/31/06 2,958,828 4,124,367 2,958,828 #

Total $58,380,872 $58,447,885 $58,043,712

^ Selected incurred losses since only one claim is open.* Selected the average.

@ Selected the incurred method due to the period's maturity.# Selected the incurred method due to the period's immaturity.

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NEW YORK HEALTHCARE FACILITIESWORKERS COMPENSATION TRUST

Figure 5

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES(Losses Limited to Specific Retentions)

0.4

1.7

6.77.2

8.3

6.6

10.4

6.77.1

3.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Policy Period Incepting January 1

0.0

2.0

4.0

6.0

8.0

10.0

12.0$ Millions

Incurred Development Paid Development Selected

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Page 25: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

Table 6

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

LOSSES LIMITED TO AGGREGATE RETENTION(Limited to Specific Retention)

A. LOSSES IN EXCESS OF AGGREGATE

EstimatedUltimate IncurredLosses Losses Paid Los ses

Policy in Excess in Excess of in ExcessPeriod of Aggregate# Aggregate# of Aggregate#

7/1-12/31/97 $ 0 $ 0 $ 01/1-12/31/98 500,000 500,000 248,6011/1-12/31/99 1,327,615 1,030,324 248,6011/1-12/31/00 1,655,230 1,060,647 01/1-12/31/01 1,655,230 1,060,647 01/1-12/31/02 2,027,615 931,752 01/1-12/31/03 2,400,000 802,857 01/1-12/31/04 1,400,000 468,333 01/1-12/31/05 0 0 01/1-7/31/06 0 0 0

Total $10,965,690 $ 5,854,560 $ 497,202

B. LOSSES LIMITED TO AGGREGATE RETENTION

EstimatedUltimate Incurred Paid

Policy Incurred Losses as Losses asPeriod Losses of 12/31/06 of 12/31/06

7/1-12/31/97 $ 361,786 $ 361,786 $ 354,3861/1-12/31/98 1,237,032 1,050,983 1,014,2741/1-12/31/99 5,364,820 5,044,509 3,920,3181/1-12/31/00 5,555,268 5,512,773 4,693,1941/1-12/31/01 6,600,234 6,490,226 4,747,7411/1-12/31/02 4,563,159 4,430,326 3,496,3791/1-12/31/03 8,007,299 7,375,193 4,206,1881/1-12/31/04 5,318,355 3,671,454 2,328,9741/1-12/31/05 7,111,241 3,647,575 1,594,5261/1-7/31/06 2,958,828 1,131,483 453,277

Total $47,078,022 $38,716,308 $26,809,257

# From Appendix C, Exhibit IV allocated to calendar accident year.

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Page 26: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

Table 7

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED REQUIRED RESERVES AS OF 12/31/06(Limited to Specific and Aggregate Retentions)

A. LOSS SUMMARY

EstimatedUltimate Incurred Paid Losses

Policy Incurred Losses as as ofPeriod Losses of 12/31/06 12/31/06

7/1-12/31/97 $ 361,786 $ 361,786 $ 354,3861/1-12/31/98 1,237,032 1,050,983 1,014,2741/1-12/31/99 5,364,820 5,044,509 3,920,3181/1-12/31/00 5,555,268 5,512,773 4,693,1941/1-12/31/01 6,600,234 6,490,226 4,747,7411/1-12/31/02 4,563,159 4,430,326 3,496,3791/1-12/31/03 8,007,299 7,375,193 4,206,1881/1-12/31/04 5,318,355 3,671,454 2,328,9741/1-12/31/05 7,111,241 3,647,575 1,594,5261/1-7/31/06 2,958,828 1,131,483 453,277

Total $47,078,022 $38,716,308 $26,809,257

B. ESTIMATED REQUIRED RESERVES AS OF 12/31/06

EstimatedCase Estimated Required

Policy Reserves as IBNR as Reserves asPeriod of 12/31/06 of 12/31/06 of 12/31/06

7/1-12/31/97 $ 7,400 $ 0 $ 7,4001/1-12/31/98 36,709 186,049 222,7581/1-12/31/99 1,124,191 320,311 1,444,5021/1-12/31/00 819,579 42,495 862,0741/1-12/31/01 1,742,485 110,008 1,852,4931/1-12/31/02 933,947 132,833 1,066,7801/1-12/31/03 3,169,005 632,106 3,801,1111/1-12/31/04 1,342,480 1,646,901 2,989,3811/1-12/31/05 2,053,049 3,463,666 5,516,7151/1-7/31/06 678,206 1,827,345 2,505,551

Total $11,907,051 $ 8,361,714 $20,268,765

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reserves as of 12/31/06 are then estimated by adding the case reserves and IBNR or by

subtracting paid losses from the estimated ultimate incurred losses.

DISCOUNTED ESTIMATED REQUIRED RESERVES

Two types of paid to incurred ratios that check the reasonableness of the estimates are calculated

in Table 8. Section A shows paid losses divided by incurred losses as of different ages. This

analysis assists in detecting changes in reserving and settlement practices. If payment and

reserving procedures are consistent between periods, the numbers within each column should be

relatively consistent.

Section B compares paid losses with the estimates of ultimate incurred losses. These ratios serve

two purposes. First, they test the reasonableness of the selected estimated ultimate incurred

losses. If losses are paid at a consistent rate, there is a sufficient volume of losses, and there are

no distorting effects from large claims, the ratios of paid losses to estimated ultimate incurred

losses are expected to be relatively consistent within each column. The second purpose of

Section B is to provide an estimate of the payout schedule to allocate the reserves to the period in

which they are expected to be paid. The selected payout schedule is shown at the bottom of

Section B.

In Section A of Table 9, the undiscounted reserves are assigned to the period in which they are

expected to be paid based on the selected schedule. In Section B, the payments expected during

the future periods are discounted at a rate of 3.0% per annum as requested by BST. The

payments are assumed to be in the middle of each period. The investment income expected to be

earned on the loss reserves is estimated in Section C.

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Table 8

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

PAID TO INCURRED RATIOS(Unlimited Los ses Including ALAE)

A. PAID/INCURRED LOSSES

Age of Policy PeriodPolicy 12 24 36 48 60 72 84 96 108 120Period Months Months Months Months Months Months Months Months Months Months

7/1-12/31/97 0.898 0.831 0.845 0.864 0.9801/1-12/31/98 0.800 0.820 0.892 0.898 0.8141/1-12/31/99 0.750 0.755 0.778 0.821 0.6211/1-12/31/00 0.759 0.764 0.752 0.782 0.5311/1-12/31/01 0.656 0.628 0.659 0.721 0.4501/1-12/31/02 0.417 0.576 0.679 0.725 0.4741/1-12/31/03 0.434 0.642 0.696 0.4741/1-12/31/04 0.414 0.665 0.5631/1-12/31/05 0.466 0.4371/1-7/31/06 0.401

Average 0.426 0.595 0.665 0.674 0.700 0.746 0.769 0.788 0.839 0.9803 Yr Avg 0.427 0.581 0.646 0.619 0.649 0.670 0.748 0.788

B. PAID/ESTIMATED ULTIMATE INCURRED LOSSES

EstimatedPolicy 12 24 36 48 60 72 84 96 108 120 UltimatePeriod Months Months Months Months Months Months Months Months Months Months Losses*

7/1-12/31/97 0.027 0.276 0.398 0.526 0.726 0.916 0.926 0.942 0.960 0.980 $ 361,7861/1-12/31/98 0.085 0.295 0.400 0.463 0.526 0.595 0.637 0.657 0.727 1,737,0321/1-12/31/99 0.081 0.198 0.282 0.359 0.438 0.480 0.519 0.564 7,393,1741/1-12/31/00 0.080 0.165 0.242 0.314 0.356 0.400 0.484 9,694,8211/1-12/31/01 0.041 0.149 0.231 0.296 0.359 0.412 11,523,3851/1-12/31/02 0.062 0.161 0.255 0.328 0.386 9,068,9131/1-12/31/03 0.088 0.216 0.305 0.372 11,302,3421/1-12/31/04 0.091 0.234 0.347 6,718,3551/1-12/31/05 0.087 0.224 7,111,2411/1-7/31/06 0.153 2,958,828

$67,869,877Average 0.080 0.213 0.308 0.380 0.465 0.561 0.642 0.721 0.844 0.9803 Yr Avg 0.110 0.225 0.302 0.332 0.367 0.431 0.547 0.721NY Groups# 0.157 0.372 0.542 0.662 0.748 0.822 0.880 0.924 0.966 1.000Selected 0.090 0.290 0.430 0.520 0.610 0.690 0.770 0.850 0.930 1.000

* See Appendix D, Exhibit I.# Accelerated to a ten-year payout.

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Table 9

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

DISCOUNTED ESTIMATED REQUIRED RESERVES AS OF 12/31/06(Limited to Specific and Aggregate Retentions)

A. ESTIMATED AMOUNT PAID IN INTERVAL

Policy 1/1/07- 1/1/08- 1/1/09- 1/1/10- 1/1/11- 1/1/12- 1/1/13- 1/1/14- 1/1/15-Period 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Total

7/1-12/31/97 7,400 7,4001/1-12/31/98 222,758 222,7581/1-12/31/99 770,401 674,101 1,444,5021/1-12/31/00 299,852 299,852 262,370 862,0741/1-12/31/01 478,063 478,063 478,063 418,305 1,852,4931/1-12/31/02 218,827 218,827 218,827 218,827 191,473 1,066,7801/1-12/31/03 712,708 633,519 633,519 633,519 633,519 554,329 3,801,1111/1-12/31/04 472,008 472,008 419,562 419,562 419,562 419,562 367,117 2,989,3811/1-12/31/05 1,087,803 699,302 699,302 621,602 621,602 621,602 621,602 543,901 5,516,7151/1-7/31/06 539,790 375,255 259,792 254,019 230,926 230,926 230,926 225,153 158,762 2,505,551

Total 4,809,609 3,850,925 2,971,435 2,565,833 2,097,082 1,826,419 1,219,645 769,055 158,762 20,268,765

B. ESTIMATED AMOUNT PAID IN INTERVAL DISCOUNTED

Discount 1/1/07- 1/1/08- 1/1/09- 1/1/10- 1/1/11- 1/1/12- 1/1/13- 1/1/14- 1/1/15-Rate 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Total

3.0% 4,739,049 3,683,912 2,759,771 2,313,652 1,835,895 1,552,372 1,006,448 616,138 123,489 18,630,726

C. ESTIMATED INVESTMENT INCOME EARNED ON THE LOSS RESERVES

Discount 1/1/07- 1/1/08- 1/1/09- 1/1/10- 1/1/11- 1/1/12- 1/1/13- 1/1/14- 1/1/15-Rate 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Total

3.0% 70,560 167,013 211,664 252,181 261,187 274,047 213,197 152,917 35,273 1,638,039

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HISTORICAL PROFITABILITY ANALYSIS

When evaluating the estimates contained in this report, it is important to review the underwriting

results of each period to evaluate the program’s direction. Section A of Table 10 and Figure 6

present a comparison of the funds available to pay claims to the estimated ultimate incurred

losses. In the 1/1-12/31/05 period, NYHCF’s estimated underwriting income is ($8,006,628).

In Section B, investment income is combined with the underwriting results to estimate net

income by policy period. As shown, the estimated net income for the 1/1-12/31/05 period is

($7,843,625). The estimated surplus as of 12/31/05, or cumulative net income, is ($20,336,242).

This estimate does not include investment income expected to be earned on the loss reserves

from Section C of Table 9.

The underwriting results per $100 payroll are shown in Section C and Figure 7. The

underwriting income is expected to decrease $1.92 ($2.80 - $0.88) from 1/1-12/31/04 to 1/1-

12/31/05 due to a $0.41 ($2.93 - $2.52) decrease in premium, a $0.88 ($2.83 - $1.95) increase in

expenses, and a $0.63 ($2.49 - $1.86) increase in estimated ultimate incurred losses.

Paid, incurred, estimated ultimate incurred, and permissible loss ratios are shown in Table 11 to

further illustrate NYHCF’s underwriting results. Also shown are combined ratios.

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Table 10

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

HISTORICAL PROFITABILITY ANALYSIS

A. ESTIMATED UNDERWRITING INCOME

EstimatedFunds Ultimate Estimated

Policy Audited Operating NYS Available Incurred UnderwritingPeriod Premium* Expenses* Assessments* for Claims Losses Income

7/1-12/31/97 $ 297,324 $ 105,253 $ 0 $ 192,071 $ 361,786 ($ 169,715)1/1-12/31/98 1,126,547 354,017 0 772,530 1,237,032 ( 464,502)1/1-12/31/99 3,255,156 887,419 0 2,367,737 5,364,820 ( 2,997,083)1/1-12/31/00 4,418,870 1,394,097 0 3,024,773 5,555,268 ( 2,530,495)1/1-12/31/01 5,532,664 1,537,158 0 3,995,506 6,600,234 ( 2,604,728)1/1-12/31/02 5,715,582 1,768,441 901,132 3,046,009 4,563,159 ( 1,517,150)1/1-12/31/03 7,323,900 3,714,950 2,251,969 1,356,981 8,007,299 ( 6,650,318)1/1-12/31/04 8,392,026 3,738,568 1,836,231 2,817,227 5,318,355 ( 2,501,128)1/1-12/31/05 7,193,405 3,876,313 4,212,479 ( 895,387) 7,111,241 ( 8,006,628)

Total $43,255,474 $17,376,216 $ 9,201,811 $16,677,447 $44,119,194 ($27,441,747)

B. ESTIMATED FUND BALANCE

Estimated EstimatedEstimated Investment Net Income Net Income

Policy Underwriting and Other Before Assessments AfterPeriod Income Income* Dividends Revenue* Dividends

7/1-12/31/97 ($ 169,715) $ 2,774 ($ 166,941) $ 93,395 # ($ 73,546)1/1-12/31/98 ( 464,502) 14,290 ( 450,212) 251,910 # ( 198,302)1/1-12/31/99 ( 2,997,083) 40,035 ( 2,957,048) 956,961 # ( 2,000,087)1/1-12/31/00 ( 2,530,495) 144,214 ( 2,386,281) 1,245,375 # ( 1,140,906)1/1-12/31/01 ( 2,604,728) 133,068 ( 2,471,660) 1,233,831 # ( 1,237,829)1/1-12/31/02 ( 1,517,150) 204,723 ( 1,312,427) 997,694 # ( 314,733)1/1-12/31/03 ( 6,650,318) 130,469 ( 6,519,849) 1,224,055 # ( 5,295,794)1/1-12/31/04 ( 2,501,128) 269,708 ( 2,231,420) 0 ( 2,231,420)1/1-12/31/05 ( 8,006,628) 163,003 ( 7,843,625) 0 ( 7,843,625)

Total ($27,441,747) $ 1,102,284 ($26,339,463) $ 6,003,221 ($20,336,242)

* From the audited financial statements.# Allocated to policy periods based on the following percentages: 1.5557%, 4.1962%, 15.9408%,

20,7451%, 20.5528%, 16.6193%, and 20.39% for the 1997 through 2003 years, respectively.

28

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Table 10 (Continued)

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

HISTORICAL PROFITABILITY ANALYSIS

C. ESTIMATED UNDERWRITING INCOME PER $100 PAYROLL

EstimatedFunds Ultimate Estimated

Policy Audited Operating NYS Available Incurred UnderwritingPeriod Premium Expenses Assessments for Claims Losses Income

7/1-12/31/97 $2.27 $0.80 $0.00 $1.47 $2.77 ($1.30)1/1-12/31/98 1.78 0.56 0.00 1.22 1.96 ( 0.74)1/1-12/31/99 1.40 0.38 0.00 1.02 2.30 ( 1.28)1/1-12/31/00 1.54 0.49 0.00 1.05 1.93 ( 0.88)1/1-12/31/01 1.88 0.52 0.00 1.36 2.25 ( 0.89)1/1-12/31/02 1.79 0.55 0.28 0.96 1.43 ( 0.47)1/1-12/31/03 2.21 1.12 0.68 0.41 2.42 ( 2.01)1/1-12/31/04 2.93 1.31 0.64 0.98 1.86 ( 0.88)1/1-12/31/05 2.52 1.36 1.47 ( 0.31) 2.49 ( 2.80)

D. PAYROLL

Policy AuditedPeriod Payroll (100)

7/1-12/31/97 $ 130,8181/1-12/31/98 631,6791/1-12/31/99 2,330,7021/1-12/31/00 2,872,3271/1-12/31/01 2,938,5831/1-12/31/02 3,191,8981/1-12/31/03 3,313,1261/1-12/31/04 2,859,6831/1-12/31/05 2,856,458

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NEW YORK HEALTHCARE FACILITIESWORKERS COMPENSATION TRUST

Figure 6

HISTORICAL PROFITABILITY ANALYSIS(Excluding Investment Income)

0.5

1.6

6.36.9

8.1

7.2

14.0

10.9

15.2

0.3

1.1

3.3

4.4

5.5 5.7

7.3

8.4

7.2

1997 1998 1999 2000 2001 2002 2003 2004 2005

Policy Period Incepting January 1

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0$ Millions

Estimated Ultimate Losses Operating ExpensesNYS Assessments Premium

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NEW YORK HEALTHCARE FACILITIESWORKERS COMPENSATION TRUST

Figure 7

HISTORICAL PROFITABILITY ANALYSIS(Excluding Investment Income)

3.57

2.522.68

2.42

2.77

2.26

4.22

3.81

5.32

2.27

1.78

1.401.54

1.88 1.79

2.21

2.93

2.52

1997 1998 1999 2000 2001 2002 2003 2004 2005

Policy Period Incepting January 1

0.00

1.00

2.00

3.00

4.00

5.00

6.00$ per $100 Payroll

Estimated Ultimate Losses Operating ExpensesNYS Assessments Premium

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Table 11

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

LOSS RATIOS(Limited to Specific and A ggregate Retentions)

Permissible CombinedIncurred Estimated Loss Ratio Ratio

Paid Los s Loss Ratio Ultimate (Funds [(Losses+Policy Ratio as as of Incurred Available/ Expenses)/Period of 12/31/06 12/31/06 Loss Ratio Premium) Premium]

7/1-12/31/97 1.192 1.217 1.217 0.646 1.5711/1-12/31/98 0.900 0.933 1.098 0.686 1.4121/1-12/31/99 1.204 1.550 1.648 0.727 1.9211/1-12/31/00 1.062 1.248 1.257 0.685 1.5731/1-12/31/01 0.858 1.173 1.193 0.722 1.4711/1-12/31/02 0.612 0.775 0.798 0.533 1.1081/1-12/31/03 0.574 1.007 1.093 0.185 1.6011/1-12/31/04 0.278 0.437 0.634 0.336 1.0791/1-12/31/05 0.222 0.507 0.989 (0.124) 1.527

Total 1.020 0.386 1.422

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QUALIFICATIONS AND LIMITATIONS

The estimates contained in this report depend upon the following:

• The actuarial assumptions, quantitative analysis, and professional judgment expressed in this report.

• The reliability of loss experience to serve as an indicator of future losses.

• The completeness and accuracy of data provided by BST.

• The completeness and accuracy of the discussion of NYHCF’s excess insurance expressed in this report.

• The appropriateness of the discount rate.

While estimates are shown for each year, the actual losses incurred for a particular year may be

lower or higher than the amounts shown. However, the amount shown for the total of all years is

expected to be reasonable.

The information used in this report should be reviewed for its consistency and accuracy with the

internal records of NYHCF. Material changes in any of the assumptions or information upon

which the findings are based will require a re-evaluation of the results of this report and a

possible revision of those findings.

The quantitative methodologies and actuarial factors used in this report are specifically

developed for the losses and time periods described above and may not be appropriate for any

other losses or periods. As NYHCF’s loss experience matures and new business is written, it is

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important to update this analysis at least annually. Such a report should review changes in the

prior periods’ losses as well as any new information that might become available.

This report is intended for the use of NYHCF and its auditors, service providers, and regulators.

If the report is released to any third party, it should be released in its entirety. Please advise

BYNAC if this report is distributed to any other third party.

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CONSULTATION

The professional opinion given in this report is based on the judgment and experience of

BYNAC. An analysis by another actuary may not arrive at the same conclusion. In the event

that another actuary is consulted regarding the findings of this report, both actuaries should make

themselves available for supplemental advice and consultation.

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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

APPENDIX A

INCURRED LOSSES $250,000 AND GREATER

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Appendix A

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

INCURRED LOSSES $250,000 AND GREATER

Incurred Paid Los sLoss and and ALAE

Policy Accident ALAE as asPeriod Claimant Date Status of 12/31/06 of 12/31/06

7/1/98-99 1/25/99 Open 353,435 146,9774/14/99 Open 439,256 181,828

792,691 328,805

7/1/99-00 8/8/99 Open 272,074 129,26510/29/99 Open 310,706 70,65512/1/99 Open 466,264 132,20012/31/99 Open 294,337 78,3662/28/00 Open 437,431 246,5883/1/00 Open 432,863 112,1023/17/00 Open 629,794 157,4324/14/00 Open 367,336 145,0844/20/00 Open 900,219 371,9834/20/00 Open 534,027 168,7335/29/00 Open 468,150 148,7326/26/00 Open 269,344 102,487

5,382,545 1,863,627

7/1/00-01 11/8/00 Open 395,421 166,22512/6/00 Open 330,237 154,6391/26/01 Open 415,154 100,0271/29/01 Open 363,862 60,0492/21/01 Open 619,512 200,8593/24/01 Open 260,923 129,8793/26/01 Open 293,766 122,3694/26/01 Open 386,745 165,8594/27/01 Open 729,403 374,2834/29/01 Open 266,033 113,792

4,061,056 1,587,981

7/1/01-02 7/4/01 Open 297,644 148,3697/20/01 Open 590,357 88,8429/11/01 Open 382,883 83,2349/19/01 Open 656,423 124,31410/4/01 Open 402,672 111,87210/20/01 Open 823,632 158,6622/26/02 Open 1,027,001 530,4283/22/02 Open 252,735 109,3344/9/02 Open 458,557 109,215

4,891,904 1,464,270

7/1/02-03 7/13/02 Open 1,377,855 158,8937/29/02 Open 349,385 134,2343/31/03 Open 795,802 126,6886/12/03 Open 293,233 121,228

2,816,275 541,043

7/1/03-04 7/25/03 Open 422,086 127,1948/28/03 Open 303,772 32,98610/22/03 Open 535,437 63,5362/17/04 Open 259,575 97,196

1,520,870 320,912

7/1/04-05 5/5/05 Open 297,804 112,487

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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

APPENDIX B

AVERAGE SEVERITIES

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Appendix B

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED ULTIMATE CLAIM COUNT AND AVERAGE SEVERITY(Unlimited Losses Including ALAE)

(Including Claims Closed without Payment)

A. ESTIMATED ULTIMATE CLAIMS

Age of IndustryReported Policy Claim Count Estimated

Policy Claims as of Period in Development Ult imatePeriod of 12/31/06 Months Factor Claims

7/1-12/31/97 36 117.0 1.000 361/1-12/31/98 166 108.0 1.000 1661/1-12/31/99 528 96.0 1.000 5281/1-12/31/00 545 84.0 1.000 5451/1-12/31/01 545 72.0 1.000 5451/1-12/31/02 503 60.0 1.000 5031/1-12/31/03 539 48.0 1.001 5401/1-12/31/04 404 36.0 1.003 4051/1-12/31/05 340 24.0 1.010 3431/1-7/31/06 152 14.5 1.070 163

Total 3,758 3,774

B. ESTIMATED ULTIMATE AVERAGE SEVERITY

Estimated EstimatedUltimate Estimated Ultimate

Policy Incurred Ultimate AveragePeriod Losses Claims Severity

7/1-12/31/97 $ 361,786 36 $10,0501/1-12/31/98 1,737,032 166 10,4641/1-12/31/99 7,393,174 528 14,0021/1-12/31/00 9,694,821 545 17,7891/1-12/31/01 11,523,385 545 21,1441/1-12/31/02 9,068,913 503 18,0301/1-12/31/03 11,302,342 540 20,9301/1-12/31/04 6,718,355 405 16,5891/1-12/31/05 7,111,241 343 20,7321/1-7/31/06 2,958,828 163 18,152

Total $67,869,877 3,774

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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

APPENDIX C

LOSSES IN EXCESS OF AGGREGATE RETENTION

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Appendix C, Exhibit I

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED ULTIMATE INCURRED LOSSESINCURRED LOSS DEVELOPMENT

A. LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedIncurred Claims in Incurred in Incurred

Policy Losses as Specif ic Excess of Excess of Losses asPeriod of 12/31/06 Retention* Retention Retention of 12/31/06

7/1/97-98 $ 1,079,787 $ 250,000 0 $ 0 $ 1,079,7877/1/98-99 4,322,750 250,000 2 292,691 4,030,0597/1/99-00 9,886,291 250,000 12 2,382,546 7,503,7457/1/00-01 6,922,125 250,000 10 1,561,055 5,361,0707/1/01-02 9,187,031 250,000 9 2,641,905 6,545,1267/1/02-03 8,544,951 350,000 2 1,473,656 7,071,295

7/1/03-7/31/04 6,940,847 350,000 2 257,523 6,683,3248/1/04-6/30/05 3,848,744 500,000 0 0 3,848,744

8/1/05-06 2,447,719 500,000 0 0 2,447,719

Total $53,180,245 37 $8,609,376 $44,570,869

B. ESTIMATED ULTIMATE INCURRED LOSSES

Limited Age of Incurred EstimatedIncurred Policy Loss Ultimate

Policy Losses as Period in Development IncurredPeriod of 12/31/06 Months Factor Losses^

7/1/97-98 $ 1,079,787 114.0 1.101 $ 1,188,8457/1/98-99 4,030,059 102.0 1.123 4,464,2567/1/99-00 7,503,745 90.0 1.151 8,183,8107/1/00-01 5,361,070 78.0 1.191 5,907,5347/1/01-02 6,545,126 66.0 1.244 7,593,1377/1/02-03 7,071,295 54.0 1.322 9,122,852

7/1/03-7/31/04 6,683,324 41.5 1.463 9,453,6038/1/04-6/30/05 3,848,744 29.5 1.723 6,631,386

8/1/05-06 2,447,719 18.0 2.280 5,580,799

Total $44,570,869 $58,126,222

^ Did not develop excess claims.

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Appendix C, Exhibit II

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED ULTIMATE INCURRED LOSSESPAID LOSS DEVELOPMENT

A. LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedPaid Claims in Paid in Paid

Policy Losses as Specif ic Excess of Excess of Losses asPeriod of 12/31/06 Retention Retention Retention of 12/31/06

7/1/97-98 $ 907,402 $ 250,000 0 $ 0 $ 907,4027/1/98-99 2,997,202 250,000 0 0 2,997,2027/1/99-00 5,316,385 250,000 1 121,983 5,194,4027/1/00-01 3,874,375 250,000 1 124,283 3,750,0927/1/01-02 4,190,637 250,000 1 280,428 3,910,2097/1/02-03 4,150,715 350,000 0 0 4,150,715

7/1/03-7/31/04 3,478,470 350,000 0 0 3,478,4708/1/04-6/30/05 1,911,622 500,000 0 0 1,911,622

8/1/05-06 1,006,344 500,000 0 0 1,006,344

Total $27,833,152 3 $ 526,694 $27,306,458

B. ESTIMATED ULTIMATE INCURRED LOSSES

Limited Age of EstimatedPaid Policy Paid Los s Ultimate

Policy Losses as Period in Development IncurredPeriod of 12/31/06 Months Factor Losses^

7/1/97-98 $ 907,402 114.0 1.363 $ 1,236,7897/1/98-99 2,997,202 102.0 1.423 4,265,0187/1/99-00 5,194,402 90.0 1.508 7,706,1587/1/00-01 3,750,092 78.0 1.641 5,993,6517/1/01-02 3,910,209 66.0 1.845 7,003,0867/1/02-03 4,150,715 54.0 2.143 8,894,982

7/1/03-7/31/04 3,478,470 41.5 2.662 9,259,6878/1/04-6/30/05 1,911,622 29.5 3.661 6,998,448

8/1/05-06 1,006,344 18.0 6.840 6,883,393

Total $27,306,458 $58,241,212

^ Did not develop excess claims.

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Appendix C, Exhibit I II

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES(Limited to Specific Retention)

A. PRIOR TO AGGREGATE

SelectedEstimated

Incurred UltimatePolicy Loss Paid Loss IncurredPeriod Development Development Losses

7/1/97-98 $ 1,188,845 $ 1,236,789 $ 1,212,817 *7/1/98-99 4,464,256 4,265,018 4,364,637 *7/1/99-00 8,183,810 7,706,158 7,944,984 *7/1/00-01 5,907,534 5,993,651 5,950,593 *7/1/01-02 7,593,137 7,003,086 7,298,112 *7/1/02-03 9,122,852 8,894,982 9,008,917 *

7/1/03-7/31/04 9,453,603 9,259,687 9,356,645 *8/1/04-6/30/05 6,631,386 6,998,448 6,814,917 *

8/1/05-06 5,580,799 6,883,393 6,092,090 *

Total $58,126,222 $58,241,212 $58,043,712

B. LIMITED TO AGGREGATE

Estimated Estimated EstimatedUltimate Ult imate UltimateLosses Losses Losses

Policy Prior to Aggregate Aggregate Limited to in ExcessPeriod Aggregate Retention Limit Aggregate of Aggregate

7/1/97-98 $ 1,212,817 $ 2,500,000 $ 1,000,000 $ 1,212,817 $ 07/1/98-99 4,364,637 2,500,000 1,000,000 3,364,637 @# 1,000,000

7/1/99-6/30/02 21,193,689 16,228,000 5,000,000 16,228,000 @ 4,965,6897/1/02-7/31/04 18,365,562 12,082,000 5,000,000 13,365,562 @# 5,000,000

Total $45,136,705 $33,310,000 $12,000,000 $34,171,016 $10,965,689

* Selected the average.^ Selected the incurred method due to the period's immaturity.

@ Losses exceeded the aggregate.# The aggregate limit is expected to be exceeded.

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Appendix C, Exhibit IV

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

INCURRED AND PAID LOSSES IN EXCESS OF AGGREGATE RETENTION(Limited to Specific Retention)

A. INCURRED IN EXCESS OF AGGREGATE

IncurredIncurred Losses Incurred in

Policy Losses as Aggregate Aggregate Limited to Excess of Period of 12/31/06 Retention Limit Aggregate Aggregate

7/1/97-98 $ 1,079,787 $ 2,500,000 $ 1,000,000 $ 1,079,787 $ 07/1/98-99 4,030,059 2,500,000 1,000,000 3,030,059 @# 1,000,000

7/1/99-6/30/02 19,409,941 16,228,000 5,000,000 16,228,000 @ 3,181,9417/1/02-7/31/04 13,754,619 12,082,000 5,000,000 12,082,000 @ 1,672,619

Total $38,274,406 $33,310,000 $12,000,000 $32,419,846 $ 5,854,560

B. PAID IN EXCESS OF AGGREGATE

Paid Paid LossesPolicy Losses as Aggregate Aggregate Limited to Paid in ExcessPeriod of 12/31/06 Retention Limit Aggregate of Aggregate

7/1/97-98 $ 907,402 $ 2,500,000 $ 1,000,000 $ 907,402 $ 07/1/98-99 2,997,202 2,500,000 1,000,000 2,500,000 @ 497,202

7/1/99-6/30/02 12,854,703 16,228,000 5,000,000 12,854,703 07/1/02-7/31/04 7,629,185 12,082,000 5,000,000 7,629,185 0

Total $24,388,492 $33,310,000 $12,000,000 $23,891,290 $ 497,202

* Selected the average. @ Losses exceeded the aggregate.

# The aggregate limit is expected to be exceeded.

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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

APPENDIX D

ESTIMATED ULAE AND ASSESSMENT RESERVES

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Appendix D, Exhibit I

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES(Unlimited Losses Including ALAE)

Limited SelectedEstimated Limited Unlimited EstimatedUltimate Incurred Incurred Ultimate

Policy Incurred Losses as Losses as IncurredPeriod Losses of 12/31/06 of 12/31/06 Losses*

7/1-12/31/97 $ 361,786 $ 361,786 $ 361,786 $ 361,7861/1-12/31/98 1,737,032 1,550,983 1,550,983 1,737,0321/1-12/31/99 6,692,435 6,074,833 6,710,905 7,393,1741/1-12/31/00 7,210,498 6,573,420 8,838,243 9,694,8211/1-12/31/01 8,255,464 7,550,873 10,539,882 11,523,3851/1-12/31/02 6,590,774 5,362,078 7,378,226 9,068,9131/1-12/31/03 10,407,299 8,178,050 8,881,374 11,302,3421/1-12/31/04 6,718,355 4,139,787 4,139,787 6,718,3551/1-12/31/05 7,111,241 3,647,575 3,647,575 7,111,2411/1-7/31/06 2,958,828 1,131,483 1,131,483 2,958,828

Total $ 58,043,712 $ 44,570,868 $ 53,180,244 $ 67,869,877

* Estimated to equal the limited estimated ult imate incurred losses divided by the limited incurredlosses multiplied by the unlimited incurred losses.

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Appendix D, Exhibit II

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED REQUIRED RESERVES AS OF 12/31/06(Unlimited Losses Including ALAE)

A. LOSS SUMMARY

EstimatedUltimate Incurred

Policy Incurred Losses as of Paid LossesPeriod Losses 12/31/06 as of 12/31/06

7/1-12/31/97 $ 361,786 $ 361,786 $ 354,3861/1-12/31/98 1,737,032 1,550,983 1,262,8751/1-12/31/99 7,393,174 6,710,905 4,168,9191/1-12/31/00 9,694,821 8,838,243 4,815,1771/1-12/31/01 11,523,385 10,539,882 4,872,0241/1-12/31/02 9,068,913 7,378,226 3,776,8071/1-12/31/03 11,302,342 8,881,374 4,206,1881/1-12/31/04 6,718,355 4,139,787 2,328,9741/1-12/31/05 7,111,241 3,647,575 1,594,5261/1-7/31/06 2,958,828 1,131,483 453,277

Total $ 67,869,877 $ 53,180,244 $27,833,153

B. ESTIMATED REQUIRED RESERVES AS OF 12/31/06

EstimatedCase Estimated Required

Policy Reserves as IBNR as of Reserves asPeriod of 12/3 1/06 12/31/06 of 12/31/06

7/1-12/31/97 $ 7,400 $ 0 $ 7,4001/1-12/31/98 288,108 186,049 474,1571/1-12/31/99 2,541,986 682,269 3,224,2551/1-12/31/00 4,023,066 856,578 4,879,6441/1-12/31/01 5,667,858 983,503 6,651,3611/1-12/31/02 3,601,419 1,690,687 5,292,1061/1-12/31/03 4,675,186 2,420,968 7,096,1541/1-12/31/04 1,810,813 2,578,568 4,389,3811/1-12/31/05 2,053,049 3,463,666 5,516,7151/1-7/31/06 678,206 1,827,345 2,505,551

Total $25,347,091 $14,689,633 $40,036,724

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Appendix D, Exhibit III

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED MEDICAL, INDEMNITY, ALAE, AND ULAE RESERVES

A. ESTIMATED MEDICAL, INDEMNITY, AND ALAE RESERVES

LimitedEstimated Estimated Estimated EstimatedRequired Medical Indemnity ALAE

Policy Reserves as Reserves# Reserves# Reserves#Period of 12/3 1/06 33% 58% 9%

7/1-12/31/97 $ 7,400 $ 2,442 $ 4,292 $ 6661/1-12/31/98 222,758 73,510 129,200 20,0481/1-12/31/99 1,444,502 476,686 837,811 130,0051/1-12/31/00 862,074 284,484 500,003 77,5871/1-12/31/01 1,852,493 611,323 1,074,446 166,7241/1-12/31/02 1,066,780 352,037 618,732 96,0101/1-12/31/03 3,801,111 1,254,367 2,204,644 342,1001/1-12/31/04 2,989,381 986,496 1,733,841 269,0441/1-12/31/05 5,516,715 1,820,516 3,199,695 496,5041/1-7/31/06 2,505,551 826,832 1,453,220 225,500

Total $20,268,765 $6,688,693 $11,755,884 $1,824,188

B. ESTIMATED ULAE RESERVE

EstimatedEstimated as Estimated ULAE

Reserve of 12/31/06* ULAE Ratio# Reserve

Case $25,347,091 0.065 $ 1,647,561Estimated IBNR 14,689,633 0.065 954,826

Total $40,036,724 $ 2,602,387

* Based on unlimited losses.# Selected judgmentally.

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Appendix D, Exhibit IV

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED RESERVE FOR ASSESSMENTS

EstimatedRate Applied Ratio Estimated

Claims through to Indemnity Indemnity AssessmentReserve 12/31/06 Losses* Losses Reserve

Case $25,347,091 0.385 0.580 $ 5,660,005Estimated IBNR 14,689,633 0.385 0.580 3,280,195

Total $40,036,724 $ 8,940,200

* Based on a five-year average of the assessments for 50-5, 151, IDP, 25A, and 15-8.

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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

APPENDIX E

ESTIMATED REQUIRED RESERVES AS OF 7/31/06

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Appendix E, Exhibit I

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

INCURRED AND PAID LOSSES AS OF 7/31/06

A. INCURRED LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedIncurred Claims in Incurred in Incurred

Policy Losses as Specif ic Excess of Excess of Losses asPeriod of 7/31/06 Retention* Retention Retention of 7/31/06

7/1-12/31/97 $ 471,643 $ 250,000 0 $ 0 $ 471,6431/1-12/31/98 1,611,917 250,000 0 0 1,611,9171/1-12/31/99 6,530,188 250,000 6 485,781 6,044,4071/1-12/31/00 8,442,772 250,000 10 1,834,034 6,608,7381/1-12/31/01 8,744,114 250,000 9 1,293,008 7,451,1061/1-12/31/02 5,930,436 250,000 # 2 736,010 5,194,4261/1-12/31/03 7,454,598 350,000 0 0 7,454,5981/1-12/31/04 4,067,170 350,000 ## 0 0 4,067,1701/1-12/31/05 3,165,342 500,000 0 0 3,165,3421/1-7/31/06 732,794 500,000 0 0 732,794

Total $47,150,974 27 $4,348,833 $42,802,141

B. PAID LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedPaid Claims in Paid in Paid

Policy Losses as Specif ic Excess of Excess of Losses asPeriod of 7/31/06 Retention* Retention Retention of 7/31/06

7/1-12/31/97 $ 353,972 $ 250,000 0 $ 0 $ 353,9721/1-12/31/98 1,253,390 250,000 0 0 1,253,3901/1-12/31/99 4,030,744 250,000 0 0 4,030,7441/1-12/31/00 4,638,690 250,000 1 95,061 4,543,6291/1-12/31/01 4,632,159 250,000 1 109,262 4,522,8971/1-12/31/02 3,516,356 250,000 # 1 183,978 3,332,3781/1-12/31/03 4,013,812 350,000 0 0 4,013,8121/1-12/31/04 2,101,604 350,000 ## 0 0 2,101,6041/1-12/31/05 1,281,926 500,000 0 0 1,281,9261/1-7/31/06 236,701 500,000 0 0 236,701

Total $26,059,354 3 $ 388,301 $25,671,053

# Changed to $350,000 7/1/02.## Changed to $500,000 7/1/04.

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Appendix E, Exhibit II

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

INCURRED AND PAID LOSSES AS OF 7/31/06

A. INCURRED LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedIncurred Claims in Incurred in Incurred

Policy Losses as Specif ic Excess of Excess of Losses asPeriod of 7/31/06 Retention* Retention Retention of 7/31/06

7/1/97-98 $ 1,188,644 $ 250,000 0 $ 0 $ 1,188,6447/1/98-99 4,595,725 250,000 3 297,838 4,297,8877/1/99-00 8,962,548 250,000 11 1,785,908 7,176,6407/1/00-01 6,578,086 250,000 8 1,133,425 5,444,6617/1/01-02 7,512,993 250,000 5 1,131,662 6,381,3317/1/02-03 6,829,809 350,000 0 0 6,829,809

7/1/03-7/31/04 6,078,274 350,000 0 0 6,078,2748/1/04-6/30/05 3,526,942 500,000 0 0 3,526,942

8/1/05-06 1,877,953 500,000 0 0 1,877,953

Total $47,150,974 27 $4,348,833 $42,802,141

B. PAID LOSSES LIMITED TO SPECIFIC RETENTION

Unlimited Number of LimitedPaid Claims in Paid in Paid

Policy Losses as Specif ic Excess of Excess of Losses asPeriod of 7/31/06 Retention* Retention Retention of 7/31/06

7/1/97-98 $ 900,947 $ 250,000 0 $ 0 $ 900,9477/1/98-99 2,902,665 250,000 0 0 2,902,6657/1/99-00 5,135,863 250,000 1 95,061 5,040,8027/1/00-01 3,759,237 250,000 1 109,262 3,649,9757/1/01-02 3,876,138 250,000 1 183,978 3,692,1607/1/02-03 3,953,289 350,000 # 0 0 3,953,289

7/1/03-7/31/04 3,257,139 350,000 0 0 3,257,1398/1/04-6/30/05 1,615,878 500,000 ## 0 0 1,615,878

8/1/05-06 658,198 500,000 0 0 658,198

Total $26,059,354 3 $ 388,301 $25,671,053

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Appendix E, Exhibit III

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

INCURRED AND PAID LOSSES IN EXCESS OF AGGREGATE RETENTION(Limited to Specific Retention)

A. INCURRED IN EXCESS OF AGGREGATE

IncurredIncurred Losses Incurred in

Policy Losses as Aggregate Aggregate Limited to Excess of Period of 7/31/06 Retention Limit Aggregate Aggregate

7/1/97-98 $ 1,188,644 $ 2,500,000 $ 1,000,000 $ 1,188,644 $ 07/1/98-99 4,297,887 2,500,000 1,000,000 3,297,887 @# 1,000,000

7/1/99-6/30/02 19,002,632 16,228,000 5,000,000 16,228,000 @ 2,774,6327/1/02-7/31/04 12,908,083 12,082,000 5,000,000 12,082,000 @ 826,083

Total $37,397,246 $33,310,000 $12,000,000 $32,796,531 $ 4,600,715

B. PAID IN EXCESS OF AGGREGATE

Paid Paid LossesPolicy Losses as Aggregate Aggregate Limited to Paid in ExcessPeriod of 7/31/06 Retention Limit Aggregate of Aggregate

7/1/97-98 $ 900,947 $ 2,500,000 $ 1,000,000 $ 900,947 $ 07/1/98-99 2,902,665 2,500,000 1,000,000 2,500,000 @ 402,665

7/1/99-6/30/02 12,382,937 16,228,000 5,000,000 12,382,937 07/1/02-7/31/04 7,210,428 12,082,000 5,000,000 7,210,428 0

Total $23,396,977 $33,310,000 $12,000,000 $22,994,312 $ 402,665

@ Losses exceeded the aggregate.# The aggregate limit is expected to be exceeded.

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Appendix E, Exhibit IV

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

LOSSES LIMITED TO AGGREGATE RETENTION(Limited to Specific Retention)

A. LOSSES IN EXCESS OF AGGREGATE

EstimatedUltimate IncurredLosses Losses Paid Los ses

Policy in Excess in Excess of in ExcessPeriod of Aggregate# Aggregate# of Aggregate#

7/1-12/31/97 $ 0 $ 0 $ 01/1-12/31/98 500,000 500,000 201,3331/1-12/31/99 1,327,615 962,439 201,3331/1-12/31/00 1,655,230 924,877 01/1-12/31/01 1,655,230 924,877 01/1-12/31/02 2,027,615 660,699 01/1-12/31/03 2,400,000 396,520 01/1-12/31/04 1,400,000 231,303 01/1-12/31/05 0 0 01/1-7/31/06 0 0 0

Total $10,965,690 $ 4,600,715 $ 402,666

B. LOSSES LIMITED TO AGGREGATE RETENTION

EstimatedUltimate Incurred Paid

Policy Incurred Losses as Losses asPeriod Losses of 7/31/06 of 7/31/06

7/1-12/31/97 $ 361,786 $ 471,643 $ 353,9721/1-12/31/98 1,237,032 1,111,917 1,052,0571/1-12/31/99 5,364,820 5,081,968 3,829,4111/1-12/31/00 5,555,268 5,683,861 4,543,6291/1-12/31/01 6,600,234 6,526,229 4,522,8971/1-12/31/02 4,563,159 4,533,727 3,332,3781/1-12/31/03 8,007,299 7,058,078 4,013,8121/1-12/31/04 5,318,355 3,835,867 2,101,6041/1-12/31/05 7,111,241 3,165,342 1,281,9261/1-7/31/06 2,958,828 732,794 236,701

Total $47,078,022 $38,201,426 $25,268,387

# From Appendix C, Exhibit IV allocated to calendar accident year.

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Appendix E, Exhibit V

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED REQUIRED RESERVES AS OF 7/31/06(Limited to Specific and Aggregate Retentions)

A. LOSS SUMMARY

EstimatedUltimate Incurred Paid

Policy Incurred Losses as Losses asPeriod Losses of 7/31/06 of 7/31/06

7/1-12/31/97 $ 361,786 $ 471,643 $ 353,9721/1-12/31/98 1,237,032 1,111,917 1,052,0571/1-12/31/99 5,364,820 5,081,968 3,829,4111/1-12/31/00 5,555,268 5,683,861 4,543,6291/1-12/31/01 6,600,234 6,526,229 4,522,8971/1-12/31/02 4,563,159 4,533,727 3,332,3781/1-12/31/03 8,007,299 7,058,078 4,013,8121/1-12/31/04 5,318,355 3,835,867 2,101,6041/1-12/31/05 7,111,241 3,165,342 1,281,9261/1-7/31/06 2,958,828 732,794 236,701

Total $47,078,022 $38,201,426 $25,268,387

B. ESTIMATED REQUIRED RESERVES AS OF 7/31/06

EstimatedCase Estimated Required

Policy Reserves as IBNR as Reserves asPeriod of 7/31/06 of 7/31/06 of 7/31/06

7/1-12/31/97 $ 117,671 ($ 109,857) $ 7,8141/1-12/31/98 59,860 125,115 184,9751/1-12/31/99 1,252,557 282,852 1,535,4091/1-12/31/00 1,140,232 ( 128,593) 1,011,6391/1-12/31/01 2,003,332 74,005 2,077,3371/1-12/31/02 1,201,349 29,432 1,230,7811/1-12/31/03 3,044,266 949,221 3,993,4871/1-12/31/04 1,734,263 1,482,488 3,216,7511/1-12/31/05 1,883,416 3,945,899 5,829,3151/1-7/31/06 496,093 2,226,034 2,722,127

Total $12,933,039 $8,876,596 $21,809,635

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Appendix E, Ex hibit VI

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED REQUIRED RESERVES AS OF 7/31/06(Unlimited Losses Including ALAE)

A. LOSS SUMMARY

EstimatedUltimate Incurred

Policy Incurred Losses as of Paid LossesPeriod Losses 7/31/06 as of 7/31/06

7/1-12/31/97 $ 361,786 $ 471,643 $ 353,9721/1-12/31/98 1,737,032 1,611,917 1,253,3901/1-12/31/99 7,393,174 6,530,188 4,030,7441/1-12/31/00 9,694,821 8,442,772 4,638,6901/1-12/31/01 11,523,385 8,744,114 4,632,1591/1-12/31/02 9,068,913 5,930,436 3,516,3561/1-12/31/03 11,302,342 7,454,598 4,013,8121/1-12/31/04 6,718,355 4,067,170 2,101,6041/1-12/31/05 7,111,241 3,165,342 1,281,9261/1-7/31/06 2,958,828 732,794 236,701

Total $ 67,869,877 $ 47,150,974 $26,059,354

B. ESTIMATED REQUIRED RESERVES AS OF 7/31/06

EstimatedCase Estimated Required

Policy Reserves as IBNR as of Reserves asPeriod of 7/31/06 7/31/06 of 7/31/06

7/1-12/31/97 $ 117,671 ($ 109,857) $ 7,8141/1-12/31/98 358,527 125,115 483,6421/1-12/31/99 2,499,444 862,986 3,362,4301/1-12/31/00 3,804,082 1,252,049 5,056,1311/1-12/31/01 4,111,955 2,779,271 6,891,2261/1-12/31/02 2,414,080 3,138,477 5,552,5571/1-12/31/03 3,440,786 3,847,744 7,288,5301/1-12/31/04 1,965,566 2,651,185 4,616,7511/1-12/31/05 1,883,416 3,945,899 5,829,3151/1-7/31/06 496,093 2,226,034 2,722,127

Total $21,091,620 $20,718,903 $41,810,523

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Appendix E, Exhibit VII

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED MEDICAL, INDEMNITY, ALAE, AND ULAE RESERVES

A. ESTIMATED MEDICAL, INDEMNITY, AND ALAE RESERVES

LimitedEstimated Estimated Estimated EstimatedRequired Medical Indemnity ALAE

Policy Reserves as Reserves# Reserves# Reserves#Period of 7/31/06 33% 58% 9%

7/1-12/31/97 $ 7,814 $ 2,579 $ 4,532 $ 7031/1-12/31/98 184,975 61,042 107,286 16,6481/1-12/31/99 1,535,409 506,685 890,537 138,1871/1-12/31/00 1,011,639 333,841 586,751 91,0481/1-12/31/01 2,077,337 685,521 1,204,855 186,9601/1-12/31/02 1,230,781 406,158 713,853 110,7701/1-12/31/03 3,993,487 1,317,851 2,316,222 359,4141/1-12/31/04 3,216,751 1,061,528 1,865,716 289,5081/1-12/31/05 5,829,315 1,923,674 3,381,003 524,6381/1-7/31/06 2,722,127 898,302 1,578,834 244,991

Total $21,809,635 $7,197,181 $12,649,589 $1,962,867

B. ESTIMATED ULAE RESERVE

EstimatedEstimated as Estimated ULAE

Reserve of 7/31/06* ULAE Ratio# Reserve

Case $21,091,620 0.065 $ 1,370,955Estimated IBNR 20,718,903 0.065 1,346,729

Total $41,810,523 $ 2,717,684

* Based on unlimited losses.# Selected judgmentally.

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Appendix E, Exhibit VIII

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED RESERVE FOR ASSESSMENTS

EstimatedRate Applied Ratio Estimated

Claims through to Indemnity Indemnity AssessmentReserve 7/31/06 Losses* Losses Reserve

Case $21,091,620 0.385 0.580 $ 4,709,759Estimated IBNR 20,718,903 0.385 0.580 4,626,531

Total $41,810,523 $ 9,336,290

* Based on a five-year average of the assessments for 50-5, 151, IDP, 25A, and 15-8.

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NEW YORK HEALTHCARE FACILITIES WORKERS COMPENSATION TRUST

APPENDIX F

ESTIMATED REQUIRED RESERVES AS OF 12/31/06 - HIGH

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Appendix F, Exhibit I

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES - HIGH(Limited to Specific Retention)

Selected Estimated SelectedEstimated Ult imate Estimated

Incurred Ultimate Losses UltimatePolicy Loss Paid Loss Incurred in Excess IncurredPeriod Development Development Losses* of Aggregate Losses

7/1-12/31/97 $ 396,517 $ 479,484 $ 365,404 $ 0 $ 365,4041/1-12/31/98 1,726,244 1,747,819 1,771,773 500,000 1,271,7731/1-12/31/99 6,692,435 6,115,804 6,893,208 1,333,333 5,559,8751/1-12/31/00 7,261,828 7,159,167 7,498,918 1,666,667 5,832,2511/1-12/31/01 8,425,862 8,085,065 8,668,237 1,666,667 7,001,5701/1-12/31/02 6,542,674 6,638,874 6,986,220 2,033,333 4,952,8871/1-12/31/03 10,879,581 9,935,016 11,135,810 2,400,000 8,735,8101/1-12/31/04 6,449,788 6,986,922 7,255,823 1,400,000 5,855,8231/1-12/31/05 7,047,115 7,175,367 7,751,253 0 7,751,2531/1-7/31/06 2,958,828 4,124,367 3,284,299 0 3,284,299

Total $58,380,872 $58,447,885 $61,610,945 $11,000,000 $50,610,945

* Selected ranges of 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, and 11% for 7/1-12/31/97 through1/1-7/31/06, respectively.

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Appendix F, Exhibit I I

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED REQUIRED RESERVES AS OF 12/31/06 - HIGH(Limited to Specific and Aggregate Retentions)

A. LOSS SUMMARY

EstimatedUltimate Incurred Paid Losses

Policy Incurred Losses as as ofPeriod Losses of 12/31/06 12/31/06

7/1-12/31/97 $ 365,404 $ 361,786 $ 354,3861/1-12/31/98 1,271,773 1,050,983 1,014,2741/1-12/31/99 5,559,875 5,044,509 3,920,3181/1-12/31/00 5,832,251 5,512,773 4,693,1941/1-12/31/01 7,001,570 6,490,226 4,747,7411/1-12/31/02 4,952,887 4,430,326 3,496,3791/1-12/31/03 8,735,810 7,375,193 4,206,1881/1-12/31/04 5,855,823 3,671,454 2,328,9741/1-12/31/05 7,751,253 3,647,575 1,594,5261/1-7/31/06 3,284,299 1,131,483 453,277

Total $50,610,945 $38,716,308 $26,809,257

B. ESTIMATED REQUIRED RESERVES AS OF 12/31/06 - HIGH

EstimatedCase Estimated Required

Policy Reserves as IBNR as Reserves asPeriod of 12/3 1/06 of 12/31/06 of 12/31/06

7/1-12/31/97 $ 7,400 $ 3,618 $ 11,0181/1-12/31/98 36,709 220,790 257,4991/1-12/31/99 1,124,191 515,366 1,639,5571/1-12/31/00 819,579 319,478 1,139,0571/1-12/31/01 1,742,485 511,344 2,253,8291/1-12/31/02 933,947 522,561 1,456,5081/1-12/31/03 3,169,005 1,360,617 4,529,6221/1-12/31/04 1,342,480 2,184,369 3,526,8491/1-12/31/05 2,053,049 4,103,678 6,156,7271/1-7/31/06 678,206 2,152,816 2,831,022

Total $11,907,051 $11,894,637 $23,801,688

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Appendix F , Exhibit III

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

DISCOUNTED ESTIMATED REQUIRED RESERVES AS OF 12/31/06 - HIGH(Limited to Specific and Aggregate Retentions)

A. ESTIMATED AMOUNT PAID IN INTERVAL

Policy 1/1/07- 1/1/08- 1/1/09- 1/1/10- 1/1/11- 1/1/12- 1/1/13- 1/1/14- 1/1/15-Period 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Total

7/1-12/31/97 11,018 11,0181/1-12/31/98 257,499 257,4991/1-12/31/99 874,430 765,127 1,639,5571/1-12/31/00 396,194 396,194 346,670 1,139,0571/1-12/31/01 581,633 581,633 581,633 508,929 2,253,8291/1-12/31/02 298,771 298,771 298,771 298,771 261,425 1,456,5081/1-12/31/03 849,304 754,937 754,937 754,937 754,937 660,570 4,529,6221/1-12/31/04 556,871 556,871 494,996 494,996 494,996 494,996 433,122 3,526,8491/1-12/31/05 1,214,003 780,430 780,430 693,716 693,716 693,716 693,716 607,001 6,156,7271/1-7/31/06 609,909 424,001 293,539 287,016 260,924 260,924 260,924 254,401 179,385 2,831,022

Total 5,649,632 4,557,964 3,550,976 3,038,365 2,465,997 2,110,206 1,387,761 861,402 179,385 23,801,688

B. ESTIMATED AMOUNT PAID IN INTERVAL DISCOUNTED

Discount 1/1/07- 1/1/08- 1/1/09- 1/1/10- 1/1/11- 1/1/12- 1/1/13- 1/1/14- 1/1/15-Rate 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Total

3.0% 5,566,748 4,360,286 3,298,031 2,739,742 2,158,863 1,793,577 1,145,177 690,123 139,531 21,892,078

C. ESTIMATED INVESTMENT INCOME EARNED ON THE LOSS RESERVES

Discount 1/1/07- 1/1/08- 1/1/09- 1/1/10- 1/1/11- 1/1/12- 1/1/13- 1/1/14- 1/1/15-Rate 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Total

3.0% 82,884 197,678 252,945 298,623 307,134 316,629 242,584 171,279 39,854 1,909,610

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Appendix F, Exhibit IV

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

SELECTED ESTIMATED ULTIMATE INCURRED LOSSES - HIGH(Unlimited Losses Including ALAE)

Limited SelectedEstimated Limited Unlimited EstimatedUltimate Incurred Incurred Ultimate

Policy Incurred Losses as Losses as IncurredPeriod Losses of 12/31/06 of 12/31/06 Losses*

7/1-12/31/97 $ 365,404 $ 361,786 $ 361,786 $ 365,4041/1-12/31/98 1,771,773 1,550,983 1,550,983 1,771,7731/1-12/31/99 6,893,208 6,074,833 6,710,905 7,614,9691/1-12/31/00 7,498,918 6,573,420 8,838,243 10,082,6141/1-12/31/01 8,668,237 7,550,873 10,539,882 12,099,5541/1-12/31/02 6,986,220 5,362,078 7,378,226 9,613,0471/1-12/31/03 11,135,810 8,178,050 8,881,374 12,093,5061/1-12/31/04 7,255,823 4,139,787 4,139,787 7,255,8231/1-12/31/05 7,751,253 3,647,575 3,647,575 7,751,2531/1-7/31/06 3,284,299 1,131,483 1,131,483 3,284,299

Total $ 61,610,945 $ 44,570,868 $ 53,180,244 $ 71,932,242

* Estimated to equal the limited estimated ult imate incurred losses divided by the limited incurredlosses multiplied by the unlimited incurred losses.

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Appendix F, Exhibit V

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED REQUIRED RESERVES AS OF 12/31/06(Unlimited Losses Including ALAE)

A. LOSS SUMMARY

EstimatedUltimate Incurred

Policy Incurred Losses as of Paid LossesPeriod Losses 12/31/06 as of 12/31/06

7/1-12/31/97 $ 365,404 $ 361,786 $ 354,3861/1-12/31/98 1,771,773 1,550,983 1,262,8751/1-12/31/99 7,614,969 6,710,905 4,168,9191/1-12/31/00 10,082,614 8,838,243 4,815,1771/1-12/31/01 12,099,554 10,539,882 4,872,0241/1-12/31/02 9,613,047 7,378,226 3,776,8071/1-12/31/03 12,093,506 8,881,374 4,206,1881/1-12/31/04 7,255,823 4,139,787 2,328,9741/1-12/31/05 7,751,253 3,647,575 1,594,5261/1-7/31/06 3,284,299 1,131,483 453,277

Total $ 71,932,242 $ 53,180,244 $27,833,153

B. ESTIMATED REQUIRED RESERVES AS OF 12/31/06

EstimatedCase Estimated Required

Policy Reserves as IBNR as of Reserves asPeriod of 12/3 1/06 12/31/06 of 12/31/06

7/1-12/31/97 $ 7,400 $ 3,618 $ 11,0181/1-12/31/98 288,108 220,790 508,8981/1-12/31/99 2,541,986 904,064 3,446,0501/1-12/31/00 4,023,066 1,244,371 5,267,4371/1-12/31/01 5,667,858 1,559,672 7,227,5301/1-12/31/02 3,601,419 2,234,821 5,836,2401/1-12/31/03 4,675,186 3,212,132 7,887,3181/1-12/31/04 1,810,813 3,116,036 4,926,8491/1-12/31/05 2,053,049 4,103,678 6,156,7271/1-7/31/06 678,206 2,152,816 2,831,022

Total $25,347,091 $18,751,998 $44,099,089

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Appendix F, Exhibit VI

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED MEDICAL, INDEMNITY, ALAE, AND ULAE RESERVES - HIGH

A. ESTIMATED MEDICAL, INDEMNITY, AND ALAE RESERVES

LimitedEstimated Estimated Estimated EstimatedRequired Medical Indemnity ALAE

Policy Reserves as Reserves# Reserves# Reserves#Period of 12/3 1/06 33% 58% 9%

7/1-12/31/97 $ 11,018 $ 3,636 $ 6,390 $ 9921/1-12/31/98 257,499 84,975 149,349 23,1751/1-12/31/99 1,639,557 541,054 950,943 147,5601/1-12/31/00 1,139,057 375,889 660,653 102,5151/1-12/31/01 2,253,829 743,764 1,307,221 202,8451/1-12/31/02 1,456,508 480,648 844,775 131,0861/1-12/31/03 4,529,622 1,494,775 2,627,181 407,6661/1-12/31/04 3,526,849 1,163,860 2,045,572 317,4161/1-12/31/05 6,156,727 2,031,720 3,570,902 554,1051/1-7/31/06 2,831,022 934,237 1,641,993 254,792

Total $23,801,688 $7,854,558 $13,804,979 $2,142,152

B. ESTIMATED ULAE RESERVE

EstimatedEstimated as Estimated ULAE

Reserve of 12/31/06* ULAE Ratio# Reserve

Case $25,347,091 0.065 $ 1,647,561Estimated IBNR 18,751,998 0.065 1,218,880

Total $44,099,089 $ 2,866,441

* Based on unlimited losses.# Selected judgmentally.

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Page 69: NEW YORK HEALTHCARE FACILITIES WORKERS …...York Healthcare Facilities Workers Compensation Trust (NYHCF) at your request. This report estimates the required reserves as of 12/31/06

Appendix F, Exhibit VII

NEW YORK HEALTH CARE FACILITIESWORKERS COMPENSATION TRUST

ESTIMATED RESERVE FOR ASSESSMENTS

EstimatedRate Applied Ratio Estimated

Claims through to Indemnity Indemnity AssessmentReserve 12/31/06 Losses* Losses Reserve

Case $25,347,091 0.385 0.580 $ 5,660,005Estimated IBNR 18,751,998 0.385 0.580 4,187,321

Total $44,099,089 $ 9,847,326

* Based on a five-year average of the as sessments for 50-5, 151, IDP, 25A, and 15-8.

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