Affiliates Risk Management Services Inc.

“Policyholders' trust is the sole member of affiliates risk management services, inc.”

“The board of directors is elected at the annual meeting of the member of arms.”

“The member must approve any amendments to the certificate of incorporation of arms if the amendment relates to the composition and tenure of the board of arms.”

“The form 990 is provided to each of the directors for their review, and the 990 is filed only after the board either formally approves the 990 at a meeting or none of the directors protest the draft 990 as provided, or otherwise raises any questions or issues regarding the draft form, within a prescribed time period.”

“Arms maintains a written conflict of interest policy, which is annually reviewed by management. The board of directors and officers of the organization are required to certify annually that they have read and understand the conflict of interest policy and submit a written questionnaire each year disclosing any known conflicts. The responses to the questionnaires are reviewed by management. Management explains the form annually at a board of director's meeting. Management also monitors all transactions during the normal course of business to identify other potential conflicts. Individuals who believe they are in a potential conflict are required to recuse themselves from the deliberation and decision-making process.”

“For the ceo's compensation, prior to any increase in compensation or benefits, or changes to the terms of the ceo's employment contract, the board (i) evaluates the ceo's accomplishments and work performance and (ii) commissions an independent salary review by an outside consultant and/or reviews comparability data of other similarly-situated non-profit and for-profit organizations to determine the reasonableness of the proposed compensation and/or contract terms in light of the comparability data. The ceo recuses herself from the meetings during such deliberations. The board then votes regarding any changes to the compensation following such deliberation, with the ceo abstaining from such vote and not in attendance. Minutes of the meetings at which such vote is taken are drafted and signed by the chairman or secretary prior to the next board meeting.”

“Arms provides its governing documents, conflict of interest policy, financial statements and 990 to the public upon request.”

“Other professional fees: program service expenses 1,657,707. Management and general expenses 169,583. Fundraising expenses 0. Total expenses 1,827,290.”

“The process has not changed from the prior year. The process is reviewed by the audit committee.”