Reciprocal Of America and The Reciprocal Group,
In Receivership For Liquidation

Termination Of Agents And Agent Compensation

Question:

How has the Companies’ receivership affected agents, brokers, or marketing representatives (collectively, the "Agents")?

Answer:

As discussed in the MORATORIUM ON ALL NEW AND RENEWAL INSURANCE POLICIES section, the Deputy Receiver's Second Directive Imposing Moratorium on New Business (the "Second Directive") prohibits solicitation or issuance of any new contracts or policies of insurance by ROA on or after January 29, 2003 (the date of receivership). In his Fourth Directive of Deputy Receiver Terminating Agents and Agent Compensation (the "Fourth Directive"), consistent with the terms of the Second Directive, the Deputy Receiver terminated all Agents effective February 23, 2003.

Question:

How has Agents' compensation been affected?

Answer:

Pursuant to the Deputy Receiver’s Fourth Directive, Agent compensation from the Companies was terminated as of February 23, 2003, and there will be no continuing payment obligations to the Agents by the Companies.