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• 11 <br /> line of business—professional liability coverage for engineers—Best will not assign it an <br /> actual rating higher than"A,"regardless of its imputed rating and superior BCAR score. <br /> Please see the following link for a video addressing this issue: <br /> http://www.voutube.com/watch?v=WKT04ZgtKdM <br /> Terra's Limited Exposure and Strong Reinsurance <br /> The structure of Terra's reinsurance and the strength of our reinsurer are additional factors that <br /> should reassure your client. Our current reinsurance arrangement limits Terra's exposure to a <br /> maximum of$200,000 per.claim on the primary$1 million of coverage. And for <br /> policyholders that have higher limits,Terra's exposure on the second million in coverage is <br /> limited to 30%of any loss in the second$1 million. Fi nally,Terra completely covers all <br /> losses in excess layers above$2 million with reinsurance that involves no exposure to Terra. <br /> As stated above,A.M.Best rates Terra's reinsurers,Everest Reinsurance Company,"A+," <br /> Class"XV". With this reinsurance arrangement,if a Terra policyholder reports a claim,the <br /> reinsurance company is liable beyond the first$200,000 of the first million, 70%of the second <br /> million of exposure, and 100%beyond that level—regardless of the status of the primary <br /> insurance carrier(i.e.,Terra). In other words,Terra has significant assets,equity and <br /> reinsurance support to fund any given claim. <br /> Terra Has Nation's Longest Continuous Record Covering Geotechnical Engineers <br /> As mentioned above,Terra companies have a 45-year,uninterrupted history of insuring <br /> engineers in the United States. Although we are the second oldest provider of PL insurance to <br /> engineers,we are the single oldest rather specializing in insuring geotechnical engineers. <br /> We insure some of the nation's premier engineers,including approximately a dozen companies <br /> that appear in the Engineering News Record's list of the country's 500 largest design firms. <br /> And,perhaps most importantly,Terra has never failed to pay a claim. <br /> I hope that the information in this letter answers any questions regarding Terra's A.M. Best <br /> rating. <br /> Veily yours, <br /> • <br /> isa D. Gan In ,Esq. <br /> ice Presides , Claims &Risk Management <br /> 133 <br /> {00115239.DOC; 1} <br />