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NORCAL + PRA Transaction: Consideration Distribution FAQ

Introduction

Earlier this year, the demutualization of NORCAL Mutual Insurance Company and subsequent acquisition of NORCAL Insurance Company by ProAssurance Corporation were completed. The following information has been developed to assist eligible policyholders with questions about the distribution of financial consideration and related topics.

Topic: Consideration Payment Mailing

Q: How was my financial consideration distributed?
A: Financial consideration for most eligible policyholders was distributed via the U.S. Postal Service. For eligible policyholders receiving checks greater than $250,000, payment was distributed via Federal Express.

Q: To what address did you send my transaction documents and consideration payment and when were they sent?
A: The transaction documents and consideration payments were sent, as required by NORCAL’s Bylaws, California law, and the Amended and Restated Plan of Conversion, to the Named Insured’s mailing address on file with NORCAL at the time of mailing. Transaction documents were mailed starting February 26, 2021, and consideration payments were mailed starting June 7, 2021.

Topic: Consideration Amount

Q: Why was my consideration amount different from the amount on the election form included in my transaction packet?
A: The materials accompanying the Member Information Statement included your estimated Allocable Equity and consideration amounts. Transaction consideration payments were issued based on the final calculation as described in the Amended and Restated Plan of Conversion. Also, if you received a check and your account was unable to be tax certified, a federal tax withholding of 24% and, if a California resident, a state tax withholding of 7%, have been deducted from your consideration.

Topic: Checks

Q: I elected Choice 1 (a check for the sale of my Conversion Stock to PRA Professional) or Choice 4 (a check for my conversion cash payment) and have not received my check. What should I do?
A: If you selected Choice 1 or Choice 4 and have not received your check and would like it re-sent to your address on file or mailed to a different address, please follow these steps:

Named Insured* Is an Individual  Named Insured* Is an Entity

Upon identity verification (see below under Identity Verification Process), the request may be made over the phone by calling Computershare Shareholder Services at (800) 546-5141. Or, the request may be made in writing by the policyholder. See below under Written Requests for mailing instructions.

Note that if an office or practice manager calls on behalf of the policyholder, the policyholder will need to be on the line to complete the identity verification process and give Computershare permission to speak to that third party.

The request must be made in writing by an authorized party and include either of the following to certify that the requesting person is authorized to act on behalf of the policyholder: (a) an original Corporate Resolution with raised seal that is dated within the past 180 days and certified by someone other than the requesting person or (b) a medallion signature guarantee. See below under Written Requests for mailing instructions.

*The Named Insured is listed on the declarations page of your NORCAL Insurance Company policy.

Please be aware that if a stop is placed on an originally issued check and that original check is subsequently received, it will not be negotiable.

Topic: Statements of Holdings

Q: I elected Choice 2 (receive and hold Conversion Stock) and have not received my Statement of Holdings. What should I do?
A: If you selected Choice 2 and have not received a Statement of Holdings showing your ownership of Conversion Stock in NORCAL Insurance Company and would like it re-sent to your address on file or mailed to a different address, please follow these steps:

Named Insured* Is an Individual  Named Insured* Is an Entity

Upon identity verification (see below under Identity Verification Process), the request may be made over the phone by calling Computershare’s Call Center at (800) 736-3001 (option 1). Or, the request may be made in writing by the policyholder. See below under Written Requests for mailing instructions.

Note that if an office or practice manager calls on behalf of the policyholder, the policyholder will need to be on the line to complete the identity verification process and give Computershare permission to speak to that third party.

The request must be made in writing by an authorized party and include either of the following to certify that the requesting person is authorized to act on behalf of the policyholder: (a) an original Corporate Resolution with raised seal that is dated within the past 180 days and certified by someone other than the requesting person or (b) a medallion signature guarantee. See below under Written Requests for mailing instructions.

*The Named Insured is listed on the declarations page of your NORCAL Insurance Company policy.


Topic: Contribution Certificates

Q: I elected Choice 3 or my election choice was not received by April 27, 2021, and I have not received my Contribution Certificate. What should I do?
A: Please first check your mail for correspondence from ProAssurance that includes a cover letter containing a ProAssurance logo. The Contribution Certificate accompanies this letter and is a nine-page document that resembles a contract. If you are unable to find this correspondence and would like it re-sent to your address on file or mailed to a different address, please follow these steps:

Named Insured* Is an Individual Named Insured* Is an Entity

Upon identity verification (see below under Identity Verification Process), the request may be made over the phone by calling Computershare’s Call Center at (800) 736-3001 (option 1). Subsequent to the call, Computershare will send you an Affidavit Of Non-Receipt, which must be completed and returned to finalize the request.

Or, the request may be made in writing by the policyholder. See below under Written Requests for mailing instructions. The written request must be accompanied by an Affidavit Of Non-Receipt, which may be obtained by calling Computershare’s Call Center at (800) 736-3001 (option 1). The Affidavit must be completed and returned to finalize the request.

Note that if an office or practice manager calls on behalf of the policyholder, the policyholder will need to be on the line to complete the identity verification process and give Computershare permission to speak to that third party.

The request must be made in writing by an authorized party and include either of the following to certify that the requesting person is authorized to act on behalf of the policyholder: (a) an original Corporate Resolution with raised seal that is dated within the past 180 days and certified by someone other than the requesting person or (b) a medallion signature guarantee. See below under Written Requests for mailing instructions.

The written request must be accompanied by an Affidavit Of Non-Receipt, which may be obtained by calling Computershare’s Call Center at (800) 736-3001 (option 1). The Affidavit must be completed and returned to finalize the request.

*The Named Insured is listed on the declarations page of your NORCAL Insurance Company policy.


Q: Should I register my Contribution Certificate with Computershare?

A: While there is no obligation to do so, you have the option to register your Contribution Certificate at www.computershare.com/investor. Through the Computershare Investor Center, accounts for which the Named Insured* is an individual can view account details, update account information, enroll in direct deposit, and opt‐in to receive electronic communications and SMS text messaging. Accounts for which the Named Insured* is an entity have view-only access and cannot make account changes online.

* The Named Insured is listed on the declarations page of your NORCAL Insurance Company policy.

Q: What is the Contribution Certificate and when will it be paid?
A: The Contribution Certificate is a financial instrument that has been issued to eligible policyholders (a) who selected Choice 3 or (b) for whom an election choice was not received by Computershare by April 27, 2021. The Contribution Certificate is equal to 100% of your Allocable Equity and will be payable within 10 years only out of NORCAL Insurance Company’s excess surplus, only with the prior written approval of the California Department of Insurance, and only if following such payment NORCAL will meet specified regulatory surplus guidelines (please refer to the Information Statement for details). Contribution Certificates will bear interest at 3.0% per annum in accordance with the formula provided in the California Insurance Code. The Contribution Certificate is not registered under the federal or state securities laws and is subject to substantial restrictions on transfer. There is no public market for the Contribution Certificates, and it is unlikely that a public market will develop.

Q: Can I change my election to cash instead of a Contribution Certificate?
A: The deadline for submitting or changing consideration elections was April 27, 2021. This deadline was established in compliance with California law and set forth in the Amended and Restated Plan of Conversion, which was approved by the California Department of Insurance and NORCAL policyholders. We are unable to accept any untimely election submissions or changes for any reason.

Q: Why was the Contribution Certificate the default option?
A: The California law governing demutualization of an insurance company requires that if a policyholder’s consideration election is not received by the established deadline, the default consideration for that policyholder must be a Contribution Certificate. As this is required by law, neither NORCAL nor ProAssurance has the power to change the default option.

Q: Since my Contribution Certificate is based on NORCAL Insurance Company’s surplus, is it possible that it could be paid out for less than my Allocable Equity?
A: Pursuant to the terms of the Contribution Certificate, it is due and payable on May 5, 2031; however, NORCAL reserves the right to prepay in whole or in part at any time with the approval of the California Department of Insurance. The Certificate will be paid provided the Principal Payment Conditions set forth in the Certificate are satisfied, including that NORCAL’s surplus post-payment is in an amount that satisfies the minimum surplus floor as set forth in the Certificate. Under certain conditions set forth in the Certificate, ProAssurance Corporation and PRA Professional Liability Group, Inc. have jointly and severally guaranteed payment of the interest and principal then due on the Certificate. NORCAL fully intends to make all interest payments when due and to pay the full face amount of all certificates at or prior to maturity. However, as with any private debt instrument, there is risk of nonpayment.

Topic: Identity Verification

Q: Why do I need to verify my identity when calling Computershare and how can I do this?
A: Computershare has an established identity verification system to protect your personal information and your account. Accordingly, you will be required to verify your identity when calling Computershare for assistance with your account. Before you call Computershare, please ensure you have the following information ready and accessible, as Computershare will not be able to assist you without it. As a reminder, if an office or practice manager calls on behalf of an individual policyholder, the policyholder will need to be on the line to complete the identity verification process and give Computershare permission to speak to that third party. Here is what you need to provide/validate:

  • Company identifier (also referred to as “COY”). The COY for NORCAL policyholders is “NORC”.
  • Name on the account. This is the name of the Named Insured, exactly as it is listed on the declarations page of your NORCAL insurance policy.
  • Account number. This is on the cover letter and consideration election form that you received from Computershare in early March. If you don’t have your account number, please call NORCAL Customer Service at 844.466.7225. You must be an authorized party on the account to obtain this information.
  • Mailing address. This is your mailing address on record with NORCAL as of May 25, 2021. If you subsequently changed your address, while the change may be on record with NORCAL, it will not be on record with Computershare.
  • SSN/TIN (if on the account). This must be the SSN/TIN for the Named Insured. If, for example, you own a practice entity that is the Named Insured on your policy and provide your personal SSN, your ID verification will be rejected. In that instance, you must provide the TIN for the practice entity.

Topic: Written Requests

Q: How can I make a written request to Computershare?
A: All written requests can be sent directly to Computershare at one of the following addresses:

Regular mail (USPS):
Computershare
PO BOX 505000
Louisville, KY 40233-5000

Expedited delivery (UPS, FedEx):
Computershare
462 South 4th Street
Suite 1600
Louiseville, KY 40202

It is recommended that all written requests—especially if including original or medallion stamped documents—are sent via traceable mail (USPS registered mail, FedEx or UPS).

Topic: Medallion Signature Guarantee

Q: What is a medallion signature guarantee, when do I need one, and how can I get it?
A: A medallion signature guarantee is a special certification stamp that guarantees a signature that authorizes any action—such as a check or Contribution Certificate reissue or change of address request—on a Computershare account is authentic. A medallion signature guarantee is required for service requests on any accounts in which (a) the Named Insured (name on the policy declarations page) is an entity or (b) a third-party (anyone other than the policyholder or policy owner) is requesting a change. You can typically obtain a medallion signature guarantee at the financial institution where you are already a customer. Another source for a medallion signature guarantee is eSignature Guarantee (esignatureguarantee.com).

Q: Are there any alternatives to a medallion signature guarantee for corporate policyholders?
A: In lieu of a medallion signature guarantee, Computershare will accept a written request to re-send a corporate policyholder’s consideration if it is signed by an authorized individual of the corporation and accompanied by an original Corporate Resolution with a raised seal that is dated within the prior 180 days and states the requesting person is authorized to act on behalf of the policyholder. Note that the Corporate Resolution may not be certified by the requesting person. Also, note this exception does not apply to policyholders requesting to transfer their consideration. Any policyholder requesting a transfer will be required to attach a medallion signature guarantee.

Topic: Computershare Account Number

Q: Why can't Computershare tell me my Account Number?
A: This information cannot be obtained from Computershare because it is a key identity verification point needed by Computershare to ensure only authorized individuals have access to your account. Policyholder Account Numbers were included on the cover letter and consideration election form that were mailed to you by Computershare in early March. If you don’t have your Account Number, please call NORCAL Customer Service at 844.466.7225. You must be an authorized party on the account to obtain this information.

Topic: Georgeson

Q: Can Georgeson assist me if I have questions?
A: As noted in the Member Information Statement, Georgeson served as the information agent for the transaction through April 30, 2021. Questions regarding ongoing transaction matters should be directed to Computershare or NORCAL, as described above.

Topic: Contingent Consideration

Q: What is the Contingent Consideration (i.e. second payment), am I eligible for it, and, if so, when will I receive it?
A: The Contingent Consideration will be determined based on the development of NORCAL’s ultimate net losses over the period from December 31, 2020 to December 31, 2023, for accident years ended on or before December 31, 2020, as determined by an independent actuarial consultant. The actuarial analysis will be performed in the first half of 2024, and any contingent consideration determined to be due will be paid thereafter. Only policyholders who selected Choice 1 (receive and sell Conversion Stock to ProAssurance) are eligible for the Contingent Consideration. Note that the Contingent Consideration is so named because its existence and amount are contingent on the occurrence of certain events explained in the Member Information Statement. If these events do not occur, Contingent Consideration will not be paid. For more information, policyholders should refer to page 15, Question 15 in the Member Information Statement.

Topic: Policyholder Communications

Q: What did NORCAL send out regarding the demutualization?
A: NORCAL went to considerable lengths to make its policyholders aware of the transaction and the applicable deadlines. Between February 26, 2021 and March 3, 2021, transaction packets that included, among other documents, a Member Information Statement and the Amended and Restated Plan of Conversion, were mailed to NORCAL policyholders. As required by NORCAL’s Bylaws, California law, and the Amended and Restated Plan of Conversion, transaction packets were mailed to the address NORCAL had on file for eligible policyholders at the time of mailing. Also, due to a change in the date of the Special Meeting of Members to approve the transaction, an additional information packet regarding the Special Meeting (which also included information about the transaction) was mailed on March 9, 2021. Additionally, NORCAL distributed ten separate communications to policyholders regarding the transaction between February 2020 and May 2021. The transaction materials also were publicly available at www.norcal-group.com/pra (where they can still be viewed), and there have been references on NORCAL Group’s website since February 2020.

Topic: Additional Questions

Q: Who should I contact if I have additional questions?
A: If you have any additional questions, please call the Customer Service Department at 844.466.7225, send an email to customerservice@norcal-group.com, or write to NORCAL Insurance Company, P.O. Box 2080, Mechanicsburg, PA 17055.