Financial Consideration
Distribution FAQ

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 in 2021?
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.

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.

Q: I elected Choice 1 (a check for the sale of my Conversion Stock to PRA Professional), Choice 2 (receive and hold Conversion Stock – check distributed after stock split), 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, Choice 2, 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:

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.

Q: I elected Choice 3 or my election choice was not received by April 27, 2021, and I am unable to find my Contribution Certificate. What should I do?
A: Please first check your records, as the Contribution Certificate does not resemble a traditional certificate. Look for correspondence from ProAssurance that includes a cover letter containing a ProAssurance logo and a nine-page document that resembles a contract. If you are unable to find this correspondence and would like a replacement copy sent to your address on file or mailed to a different address, please follow these steps:

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 Name on the Account* 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 Name on the Account* is an entity have view-only access and cannot make account changes online.

* The Name on the Account is the name (a) of the Named Insured, exactly as it was listed on the declarations page of the NORCAL Insurance Company policy you had in May 2021 or (b) exactly as it is listed on record with Computershare if you have submitted a name change request directly to Computershare.

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: When will interest payments be made and when will I receive my 1099-INT?
A: If approved by the California Department of Insurance for a given year, annual interest payments will be made on April 15th of that year. 1099-INT tax forms for such interest payments will be distributed the following year, in late January or early February. If you have misplaced or have not received your 1099-INT and would like a replacement copy, please call Computershare's Call Center at 1-866-508-8333. Note that you will need to verify your identity in order to initiate the replacement process. Please see below under Identity Verification for instructions on how to verify your identity with Computershare.

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: What can I do to receive payment on the principal of my Contribution Certificate before the maturity date in 2031?
A: There is no option for an individual Contribution Certificate holder to initiate early payment of the principal amount. Early payment may be initiated only by NORCAL, must be distributed to all Certificate holders at the same time (i.e., not to individual Certificate holders upon request), and may be paid only if certain conditions are met, including the approval of the California Department of Insurance. At this time, there are no plans to initiate early payment of all Certificates.

If a Contribution Certificate holder is concerned about waiting until 2031 for payment, they may (a) in certain circumstances, transfer their Certificate to another party, or (b) designate a beneficiary for the Certificate (available to individual Certificate holders only). For more information regarding transfers and beneficiaries, please see below under Consideration Transfer.

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.

Q: It has been reported that no Contingent Consideration will be paid to the individuals who chose to receive NORCAL stock. Will that determination impact my Contribution Certificate payments?
A: The potential Contingent Consideration payment was unrelated to payments issued pursuant to your Contribution Certificate. The amount and schedule of payments will continue pursuant to the terms of your Contribution Certificate through its maturity date in 2031.

Please continue to keep your information updated with Computershare to ensure your payments arrive to the correct location in a timely manner each year.

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 (a) of the Named Insured, exactly as it was listed on the declarations page of the NORCAL insurance policy you had in May 2021 or (b) exactly as it is listed on record with Computershare if you have submitted a name change request directly to Computershare.
• Account number. This can be found on many documents sent to you by Computershare, including, for example, (a) the cover letter and consideration election form that you received from Computershare in early March 2021 and (b) the Form 1099 you receive for tax purposes. Please note that your account number begins with a capital C and is followed by a 10-digit number. It is not your NORCAL policy number. If you don’t have your account number, please call our Customer Experience & Engagement Department at 844-466-7225, option 3 (Billing). You must be an authorized party on the account to obtain this information.
• Mailing address. This is your mailing address (a) on record with NORCAL as of May 25, 2021 or (b) on record with Computershare if you have submitted an address change request directly to Computershare. If you changed your address with NORCAL after May 25, 2021, and did not also submit the address change to Computershare, it will not be on record with Computershare.
• SSN/TIN (if on the account). This must be the SSN/TIN for the Name on the Account*. If, for example, you own a practice entity that is the Name on the Account and provide your personal SSN, your ID verification will be rejected. In that instance, you must provide the TIN for the practice entity. Please note that Computershare only has this information if you mailed in a W-9 and your account was tax certified.

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 (updated 9/16/2022):

Regular mail (USPS):
Computershare
P.O. BOX 43006
Providence, RI 02949-3006

Courier delivery (UPS, FedEx):
Computershare
150 Royall St., Suite 101
Canton, MA 02021

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).

Q: How can I update my address on file with Computershare?
A: If you would like to change the address you have on file with Computershare, please follow these steps:

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.

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 2021. If you don’t have your Account Number, please call our Customer Experience & Engagement Department at 844-466-7225, option 3 (Billing). You must be an authorized party on the account to obtain this information.

Q: How can I transfer my financial consideration to another individual or entity?
A: Individuals have the option of immediately transferring their financial consideration to a third party (subject to certain limitations) or transferring their financial consideration to a beneficiary on death. Entities may immediately transfer their financial consideration to a third party (subject to certain limitations). The forms required can be found on Computershare’s website:

• General Transfer Request Form: Use this form if you are an individual or entity that wants to transfer your financial consideration to a third party (subject to certain limitations).
• Beneficiary Designation Form: Use this form if you are an individual who wants to designate a beneficiary to whom or which your financial consideration will be transferred upon your death.

If your consideration is in the form of a Contribution Certificate, please return your Certificate to Computershare along with the completed form.

For assistance with the transfer of your financial consideration, please contact Computershare by telephone at 1-866-508-8333 or by email at Web.Queries@Computershare.com. Note that you will need to verify your identity in order to initiate the consideration transfer process. Please see above under Identity Verification for instructions on how to verify your identity with Computershare.

Q: What is the Contingent Consideration (i.e. second payment) and am I eligible for it?
A: The Contingent Consideration was a potential payment based on the development of NORCAL’s ultimate 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. Only policyholders who selected Choice 1 (receive and sell Conversion Stock to ProAssurance) or Choice 2 (receive and hold Conversion Stock – sold after stock split) were eligible for the Contingent Consideration. Note that the Contingent Consideration was so named because its existence and amount were contingent on the occurrence of certain events explained in the Member Information Statement. For more information, policyholders should refer to page 15, Question 15 in the Member Information Statement.

Q: When will I know whether there will be a Contingent Consideration payment?
A: As communicated via letter to the affected individuals, no Contingent Consideration will be paid. In accordance with the terms of the Acquisition Agreement between ProAssurance and NORCAL, an independent actuarial analysis was completed and a corresponding written report was issued to ProAssurance and a committee designated by NORCAL prior to the acquisition. The analysis concluded that NORCAL’s estimated ultimate losses as of December 31, 2023 were higher than estimated in 2020, meaning no Contingent Consideration would be due. ProAssurance and the NORCAL committee reviewed and accepted the conclusions of the independent actuary.

Q: Why was it determined that no Contingent Consideration was payable?
A: The Contingent Consideration was payable if NORCAL’s ultimate net losses as of December 31, 2020 proved to be lower than ProAssurance’s estimate of those losses at the time the acquisition agreement was executed. After three years of development, losses did not develop favorably versus ProAssurance’s original estimate. The adverse severity trends in medical malpractice insurance arising from economic and social inflation continue unabated.

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, and there were references on NORCAL’s website since February 2020. This transaction documentation can now be found at www.ProAssurance.com/about-us/norcal-transaction.

Q: Who should I contact if I have additional questions?
A: If you have any additional questions, please call the Customer Experience & Engagement Department at 844-466-7225, option 3 (Billing), send an email to Billing@ProAssurance.com, or write to NORCAL Insurance Company, P.O. Box 2080, Mechanicsburg, PA 17055.

Q: I have retired or am insured by a company other than NORCAL. Should I still reach out to the Billing team to answer my additional questions?
A: Yes, as the Billing team members in the Customer Experience & Engagement Department have been designated to answer questions about the transaction. Depending on your specific question, they may answer it directly, refer you to Computershare, or take a message and consult with another department.