Disclosure of Compensation Arrangement

Group Coverage, Inc. secures and otherwise facilitates the purchase of insurance coverage for its policyholder clients from a variety of insurance carriers and group benefits providers (collectively “carriers”) and sometimes engages the services of other entities in connection with the issuance of such coverage. In most instances, Group Coverage, Inc. is primarily compensated for the insurance brokerage services that it provides to its policyholder clients through commission payments that are based on the premium charged, and paid for, by the issuing carrier for each policy secured for Group Coverage, Inc.’s clients. The percentage of these commissions varies by insurance carrier and policy type. In addition, Group Coverage, Inc. has entered into contingent compensation arrangements with insurance carriers based on circumstances, including without limitation, the overall volume of premiums paid to or policies issued by or through a particular insurance carrier for Group Coverage, Inc.’s clients; the overall growth, persistency and/or retention of the premiums paid by Group Coverage, Inc.’s clients to or through a particular insurance carrier; and, in certain cases, the profitability of the total premium (i.e., claims history on the coverage) paid by Group Coverage, Inc.’s clients to or through a particular insurance carrier. Documentation currently in Group Coverage, Inc.’s possession evidencing Group Coverage, Inc.’s current compensation agreements with the aforementioned carriers is available for all policyholders’ review at Group Coverage, Inc.’s corporate office; however, if those policyholders or their representatives have any additional questions or require any other information regarding any of the compensation received by Group Coverage, Inc. for any of its insurance brokerage services, please do not hesitate to contact:

William F. Schaake, CIC, CRM, CLCS, ACA Certified, President of Group Coverage, Inc. 2137 Deer Park Ave., Deer Park, NY 11729