UNDERWRITING UNDERWRITING

OVERVIEWOVERVIEW

JILL DOMINGUEZJILL DOMINGUEZVICE PRESIDENTVICE PRESIDENTUNDERWRITINGUNDERWRITING

EIM’S CONCERNS2003 and 2004

All policies will be coming off multi-year programs priced in 1999 or 2000 when premiums were low and limits were high.

Need to manage book to ensure we can continue to provide same products and services.

EIM MANDATE:ADJUST PREMIUMS AND MANAGE LIMITS

Member’s Wishes

Keep a large amount of capacity Keep broadest form available Do not hit all Members with the same

increase in premium- differentiate among the Members

2003 IN REVIEW2003 IN REVIEW

4 New Members Joined EIM 169 Members as of 12/31/03 Gross Premium Earned $179,009,816

General Liability $ 71,529,808D & O $ 64,283,611Property $ 43,196,397

2003 COMPARED TO 2002

2003 2002

Gross Premium Earned $179,009,816 $120,707,000

General Liability $ 71,529,808 $ 54,972,000

D&O $ 64,283,611 $ 24,928,000

Property $ 43,196,397 $ 40,807,000

D&O Average Increase: 300%Range: 4% - 4,000%

GL Average Increase: 53%Range: 5% - 370%

*Not Every Member Given Same Increase

Chesapeake Energy Corp.

International Transmission Company

JEA and FPL Group d/b/a/ St. John’s River Power Park

NRG Energy, Inc.

NEW MEMBERS IN 2003

TOTAL MEMBERSHIP

110

120

130

140

150

160

170

180

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

CHANGES TO 2003 POLICY Brought Discovery Period provision back to one year for

100% of annual premium, in lieu of five years at 100% of annual premium

Separated Fiduciary Liability from Excess GL policy; gave a dedicated $25M limit instead of sharing limit with Excess General Liability

Took automatic reinstatement wording off policies

No major cutbacks in what our policies cover; still full follow form to AEGIS; still the broadest GL, Fiduciary, and D&O coverage available for utilities and Members of the energy services industry

EIM’S PRODUCTS… SUCCESSFUL INMAINTAINING LARGE AMOUNT OF CAPACITY

GENERAL LIABILITY Capacity $100M as of 01/01/04 Availability Depends on Risk

D&O/GENERAL PARTNER Capacity $50M as of 01/01/04 $10M to $50M Available Depending on Risk

EXCESS FIDUCIARY LIABILITY $25M Available Depending on Risk

Property Primary and Excess Quota Share Capacity $15M

UPDATE BYUPDATE BYLINE OF BUSINESSLINE OF BUSINESS

EXCESSEXCESS

DIRECTORSDIRECTORS

AND OFFICERSAND OFFICERS

LIABILITYLIABILITY

EIM’S GOALS AND MEMBER PRIORITIESWITH RESPECT TO EXCESS D & O

Maintain Capacity Maintain Broad Coverage Underwrite and Price Each Risk on Its

Individual Merits - Do Not Take Broad Brush Approach

Adjust Pricing on All Accounts - Book Under Priced

EVALUATION FACTORSHOW DO WE DIFFERENTIATE RISK?

Private Company Low Risk Public Power Gas, Water, E&P Electric, Electric/Gas Nuclear Merchant, Energy Trading High

Risk

SUBMISSIONS ANDADDITIONAL INFORMATION

Applications Financial InformationCorporate GovernanceLoss Information/Litigation ProfileCopies of Underlying Terms and ConditionsChanges Not Reflected in Published Financial

Material/News ReleasesAdditional QuestionsTimely Presentation of Coverage Issues

CORPORATE GOVERNANCE

Board Composition (Independence of Board)

CGQ Score (ISS)

Meetings and Attendance

Evaluation of CommitteesAudit CompensationNominating

Rules Regarding Insider Trading

FINANCIAL INFORMATION

Public or PrivateOverall Financial HealthRatings Agency Actions and EvaluationsComparison to Like CompaniesLiquidity, Debt SituationBusiness Strategy Restatements

LITIGATION

Claims Reported to EIM and Their Status

Litigation Disclosed in 10Ks and 10Qs

Any New Litigation

EXCESSEXCESS

FIDUCIARYFIDUCIARY

LIABILITYLIABILITY

EXCESS FIDUCIARY LIABILITY-         Maximum Limit of Liability Offered to

Members: $25M  Member Must Have at Least $35M in

Underlying Limits

31 Members purchase Excess Fiduciary

SUBMISSION REQUIREMENTS

Underlying carrier application and attachments

5500 or annual plan report for Defined Benefit and Defined Contribution plans (not health and welfare)

Company 10K or Annual Report (if not already supplied)

EXCESS FIDUCIARY LIABILITY

Plan Assets Number of Participants Benefit Plan Types Defined Benefit (Pension Plans) Defined Contribution (401k Type Plans) Health and Welfare Plans

EXCESS FIDUCIARY LIABILITYALL PLANS

Plan Asset SizeDiversification of AssetsQuality of Plan Assets (Blue Chip Companies, High Tech,etc.)Percentage of Company Stock in PlanAsset Type (Stocks, Bonds, Real Estate, Party in Interest Transactions)

DEFINED BENEFITOver Funded or Under Funded Meeting Contribution Requirements

DEFINED CONTRIBUTIONCompany Match – Stock or Cash?Restriction(s) on Trading on AccountsNumber of Investment Options AvailableAbility of Participants to Buy/Sell Asset Classes

PROPERTYPROPERTY

PROPERTY

CURRENTLY INVOLVED WITH 75 TOTAL PROGRAMS

EIM $ 1,612,000

EIM and NEIL $24,531,000

NEIL Fronts $ 7,124,000

PROPERTY

PARTICIPATION INMEMBERS’ PROGRAMS

12/31/2001 1712/31/2002 2512/31/2003 40

PROPERTY

OPEN CLAIMS ACTIVITY2001 12002 62003 11

PROPERTY

Please consider advising your broker to send EIM your property submission.

If a large portion of your property risk is with a direct writer or one carrier, we ask that you consider EIM’s involvement.

EIM SUBMISSION PROCEDURE Submission at Least 45–60 Days Lead Time Detailed Loss Prevention Inspection Reports A Minimum of Five Years Loss Experience A Listing (Preferably Electronic) of Locations and Values

Including Detailed Address Information Business Interruption Worksheets Sample Policy Form Current and Proposed Specs and Limits

COVERAGE CAN BE CONSIDERED ON A PRIMARY BASIS IF:

The Account is a Quality-Engineered and Maintained Risk

Deductibles Meet Minimum Guidelines for Equipment at Risk and Coverage Requested

Rates Contemplate the Exposures Presented by the Risk, Claims Experience, and Form

UNDERWRITING LIMITS Capacity Provided on a Quota Share Basis Only

Maximum Capacity is $15M

Earthquake, Flood, and Wind Exposures Will Be Monitored

Accounts with Zone A Flood and/or Catastrophe Exposures May Be Subject to Reduced Capacity and/or Limits and/or Higher Deductibles

Earthquake and Flood Must Be Written with Annual Aggregates

EXCESSEXCESS

GENERALGENERAL

LIABILITYLIABILITY

EXCESS GENERAL LIABILITY

Excess form can also include: Excess EPLI Excess Workers Comp Excess Professional Liability

($65M max sublimit)

EXCESS GENERAL LIABILITY

Exposure Changes - Operations Safety and Maintenance Dam Inspection Reports AEGIS Risk Assessment Reports if

Available Tariffs – information on liability for FTS DOT 7100 Reports for Pipelines Loss Information

EIM TERRORISM POSITION

CASUALTY PROPERTY

•TRIA-Certified is offered. •TRIA-Certified is offered.

•Do not exclude non- certified, but cap GL to $25M per Member/$125M EIM-wide.

•Non-certified is offered only for U.S. and Puerto Rico.

HOW ARE WE DOING?2003 RISK MANAGERS SURVEY

EIM follows reasonable, prudent and sound underwriting practices:

97% Agree/Strongly Agree

HOW ARE WE DOING?2003 RISK MANAGERS SURVEY

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

Overall, EIM meets my expectations in breadth of coverage and level of service:

90% Agree/Strongly Agree

96% Agree/Strongly Agree