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EXAMINATION REPORTOFFIRST PROFESSIONALS INSURANCECOMPANY, INC.JACKSONVILLE, FLORIDAAS OFDECEMBER 31, 2014BY THEFLORIDA OFFICE OF INSURANCE REGULATION

TABLE OF CONTENTSLETTER OF TRANSMITTAL . SCOPE OF EXAMINATION. 1SUMMARY OF SIGNIFICANT FINDINGS . 2CURRENT EXAMINATION FINDINGS . 2PRIOR EXAMINATION FINDINGS . 2COMPANY HISTORY . 2GENERAL . 2DIVIDENDS . 3CAPITAL STOCK AND CAPITAL CONTRIBUTIONS . 4SURPLUS NOTES . 4ACQUISITIONS, MERGERS, DISPOSALS, DISSOLUTIONS AND PURCHASE OR SALES THROUGHREINSURANCE . 4CORPORATE RECORDS . 5CONFLICT OF INTEREST . 5MANAGEMENT AND CONTROL . 5MANAGEMENT . 5DIRECTORS . 6SENIOR OFFICERS . 6AFFILIATED COMPANIES . 7ORGANIZATIONAL CHART . 8MANAGEMENT SERVICES AGREEMENT . 9TAX ALLOCATION AGREEMENT. 9COMMISSION OVERRIDE AGREEMENT .10INTERCOMPANY REINSURANCE POOLING AGREEMENT .10QUOTA SHARE REINSURANCE AGREEMENT .10REINSURANCE ALLOCATION AGREEMENT .11TERRITORY AND PLAN OF OPERATIONS .11TREATMENT OF POLICYHOLDERS .11REINSURANCE .12ASSUMED .12CEDED .12ACCOUNTS AND RECORDS .13ACTUARIAL OPINION OR CERTIFICATION REPORTING FOR CAPTIVE INSURER .13ENTERPRISE RISK REPORTING .13LETTER OF CREDIT(S) .13CUSTODIAL AGREEMENT .14INVESTMENT MANAGEMENT AGREEMENT .14REINSURANCE INTERMEDIARY AUTHORIZATION AGREEMENT .15INDEPENDENT AUDITOR AGREEMENT .15INFORMATION TECHNOLOGY REPORT .16STATUTORY DEPOSITS .16

FINANCIAL STATEMENTS .17ASSETS .18LIABILITIES, SURPLUS AND OTHER FUNDS .19STATEMENT OF INCOME AND CAPITAL AND SURPLUS ACCOUNT .20COMPARATIVE ANALYSIS OF CHANGES IN SURPLUS .21COMMENTS ON FINANCIAL STATEMENTS .22LIABILITIES .22CAPITAL AND SURPLUS .22CONCLUSION .23

April 15, 2016David AltmaierCommissionerOffice of Insurance RegulationState of FloridaTallahassee, Florida 32399-0326Dear Sir:Pursuant to your instructions, in compliance with Section 624.316, Florida Statutes, Rule 69O138.005, Florida Administrative Code, and in accordance with the practices and procedurespromulgated by the National Association of Insurance Commissioners (NAIC), we have conductedan examination as of December 31, 2014, of the financial condition and corporate affairs ofFirst Professionals Insurance Company12724 Gran Bay Parkway West, Suite 400Jacksonville, Florida 32258hereinafter referred to as the “Company.” Such report of examination is herewith respectfullysubmitted.

SCOPE OF EXAMINATIONThis examination covered the period of January 1, 2010 through December 31, 2014. TheCompany was last examined by representatives of the Florida Office of Insurance Regulation(Office) covered the period of January 1, 2006 through December 31, 2009. This examinationcommenced with planning at the Office on November 18, 2015 to November 20, 2015. Thefieldwork commenced on December 14, 2015 and concluded as of April 15, 2016.The examination was a multi-state examination conducted in accordance with the NAICFinancial Condition Examiners Handbook. The Handbook requires that the examination isplanned and performed to evaluate the financial condition, assess corporate governance,identify current and prospective risks of the company and evaluate system controls andprocedures used to mitigate those risks. An examination also includes identifying andevaluating significant risks that could cause an insurer’s surplus to be materially misstated bothcurrently and prospectively.All accounts and activities of the company were considered in accordance with the risk-focusedexamination process. This may include assessing significant estimates made by managementand evaluating management’s compliance with Statutory Accounting Principles.This examination report includes significant findings of fact, as mentioned in Section 624.319,Florida Statutes and general information about the insurer and its financial condition. There maybe other items identified during the examination that, due to their nature (e.g., subjectiveconclusions, proprietary information, etc.), are not included within the examination report butseparately communicated to other regulators and/or the Company.1

SUMMARY OF SIGNIFICANT FINDINGSCurrent Examination FindingsThere were no material findings or exceptions noted during the examination as of December 31,2014.Prior Examination FindingsThe following is a summary of material adverse findings, significant non-compliance findings ormaterial changes in the financial statements in the Office’s prior examination report as ofDecember 31, 2009, along with resulting action taken by the Company in connection therewith.Holding Company System Registration StatementThe Company did not disclose its intercompany pooling agreement with affiliates in the annualfiling of the holding company system registration statement. The Company was not incompliance with Rule 69O-143.046(2) (c) 6, Registration of Insurers, Florida AdministrativeCode.Resolution: The examination team verified that the Company complied with Rule 69O143.046(2) (c) 6, Registration of Insurers, Florida Administrative Code.COMPANY HISTORYGeneralThe Company was incorporated in Florida on October 10, 1985, and organized by conversion ofthe Florida Physician Insurance Reciprocal, a Florida reciprocal insurer, on January 1, 1986.2

Florida Physicians Insurance Reciprocal originally commenced business on December 13, 1976and was authorized to transact insurance coverage in Florida on January 9, 1986. TheCompany changed its name to First Professionals Insurance Company on May 8, 2001.On October 19, 2011, FPIC Insurance Group, Inc., the Company’s parent, was acquired by TheDoctors Company, an Interinsurance Exchange and a California corporation. The Company’semployees and operations were fully integrated into The Doctors Company after theaforementioned acquisition. Effective January 1, 2013, all new direct policies of the Companyand polices that were due for renewal were renewed as polices of The Doctors Company. TheCompany went into and remains in run-off.The Company was authorized to transact the following insurance coverage in Florida onJanuary 9, 1986 and continued to be authorized as of December 31, 2014:Medical MalpracticeOther LiabilityDividendsIn accordance with Section 628.371, Florida Statutes, the Company declared and paiddividends to its parent, FPIC Insurance Group, Inc., in 2010, 2011, 2012 and 2013, in theamounts of 32,000,000, 23,000,000, 21,300,000 and 70,000,000, respectively.Subsequent Event: The Company declared and paid a dividend to its parent, FPIC InsuranceGroup, Inc. in 2015 in the amount of 50,000,000.3

Capital Stock and Capital ContributionsAs of December 31, 2014, the Company’s capitalization was as follows:Number of authorized common capital shares5,000,000Number of shares issued and outstanding5,000,000Total common capital stock 5,000,000Par value per share 1.00Control of the Company was maintained by its parent, FPIC Insurance Group, Inc., who owned100 percent of the stock issued by the Company, who in turn was 100 percent owned by TheDoctors Company, which is wholly owned by its policy holders.Surplus NotesThe Company did not have any surplus notes during the period of this examination.Acquisitions, Mergers, Disposals, Dissolutions and Purchase or Sales throughReinsuranceEffective December 31, 2014, Advocate, MD Insurance of the Southwest, a Texas corporation,merged with the Company (its former parent). The merger was approved by the Office andTexas Department of Insurance. Prior to the merger, effective November 30, 2014, Advocate,MD Insurance of the Southwest entered into an Assumption Reinsurance Agreement with TheDoctors Company whereby, The Doctors Company assumed all the underwriting liabilities ofAdvocate, MD Insurance of the Southwest. Subsequent Event: Effective August 13, 2015,Intermed Insurance Company, a Missouri corporation, was merged with the Company (itsformer parent). The merger was approved by the Office and Missouri Department of Insurance.Prior to the merger, effective December 31, 2014, Intermed Insurance Company entered into anAssumption Reinsurance Agreement with The Doctors Company, whereby, The DoctorsCompany assumed all the underwriting liabilities of Intermed Insurance Company.4

CORPORATE RECORDSThe recorded minutes of the Shareholder, Board of Directors (Board) and certain internalcommittees were reviewed for the period under examination. The recorded minutes of the Boardadequately documented its meetings and approval of Company transactions and events, incompliance with the NAIC Financial Condition Examiners Handbook adopted by Rule 69O138.001, Florida Administrative Code, including the authorization of investments as required bySection 625.304, Florida Statutes.Conflict of InterestThe Company adopted a policy statement requiring periodic disclosure of conflicts of interest inaccordance with the NAIC Financial Condition Examiners Handbook adopted by Rule 69O138.001, Florida Administrative Code.MANAGEMENT AND CONTROLManagementThe annual shareholder meeting for the election of directors was held in accordance withSection 628.231, Florida Statutes. Directors serving as of December 31, 2014 are shown onthe following page.5

DirectorsName and LocationPrincipal OccupationRichard Elliott Anderson, MDYountville, CaliforniaChief Executive OfficerThe Doctors CompanyRobert David FrancisNapa, CaliforniaChief Operating OfficerThe Doctors CompanyDennis Bryan Lawton, Ph. DSausalito, CaliforniaChief Governance OfficerThe Doctors CompanyDavid Armand McHaleGranite Bay, CaliforniaSenior Vice President,Chief CounselThe Doctors CompanyDavid Gerard PreimesbergerNapa, CaliforniaChief Financial OfficerThe Doctors CompanyIn accordance with the Company’s bylaws, the Board appointed the following senior officers:Senior OfficersNameTitleRichard Elliott Anderson, MDChairman andChief Executive OfficerRobert Elwood White, Jr.PresidentRobert David FrancisChief Operating OfficerDavid Gerard PreimsbergerTreasurer andChief Financial OfficerDavid Armand McHaleSecretaryDouglas Charles WillVice PresidentDouglas William BoltzAssistant Vice President6

The Company’s Board appointed several internal committees from the Board of Governors of itsultimate parent, The Doctors Company, to act on the Company’s behalf. Following were theprincipal Board of Governors committees and their members as of December 31, 2014:Governance CommitteeAudit CommitteeInvestment CommitteeKenneth R. Chrisman 1Richard E. Anderson, MDEugene M. BullisCharles R. Kossman, MDKathleen D. RicordRonald H. Wender, MDRobert W. Pike 1Richard E. Anderson, MDEugene M. BullisKenneth R. ChrismanCharles R. Kossman, MDMary Ann ThodeRonald H. Wender, MDSteven J. BensingerDavid M. Charles, MD 1Richard E. Anderson, MDEugene M. BullisCharles R. Kossman, MDRobert W. PikeMary Ann ThodeSteven J. BensingerFinance CommitteeEugene M. Bullis 1Richard E. Anderson, MDKenneth R. ChrismanDonald J. Palmisano, MDRobert W. PikeKathleen D. RicordWilliam C. Rupp, MDRonald H. Wender, MD1ChairThe Company maintained an audit committee, as required by Section 624.424(8) (c), FloridaStatutes.Affiliated CompaniesThe most recent holding company registration statement was filed with the Office on February24, 2015, as required by Section 628.801, Florida Statutes, and Rule 69O-143.046, FloridaAdministrative Code.7

First Professionals Insurance CompanyOrganizational ChartDecember 31, 2014The Doctors Company(CA)AmericanHealthcareIndemnityCompany ompany (OH)FPICInsuranceGroup,Inc.(FL)TDC SpecialRisksInsuranceCompany (DC)FirstProfessionalsInsuranceCompany (FL)IntermedInsuranceCompany (MO)8The DoctorsManagementCompany (CA)The DoctorsCompanyInsuranceServices, LLC(CA)