2022 PAL/PPL/MISC Binding Authority Narrative

Thanks to the support of underwriters, Dominion's binding authority, renewing March 1st of each year, continues to enjoy profitable acceptance across the United States despite in roads made by Jameson, a major competitor, with the National Association of Patent Practitioners (NAPP) which offers Patent Practitioners Liability (PPL) policies to its members. In response to these competitive forces, we have launched an account initiative for each patent practitioner prospect in our database. As part of this effort, we emphasize the two popular enhanced PPL product offerings: The Patent Agent Liability (PAL) policy and the Patent Lawyer Liability (PLL) policy.

The combined PAL/PLL book, currently sits at $454,990 for 159 policies, down slightly from the prior year's totals of $461,453 for 164 policies, which was up over the two preceding years, which came in at $441,918 for 163 policies in force, and $450,247 on 168 policies, respectively. As is apparent from the foregoing, the rate of loss to Jameson has subsided. Growth in average per policy premium is on the rise as well, from $2,680 three years ago, to $2,711 two years ago, to $2,814 last year and $2,862 this year. We remain confident that we will be able to continue growing the book over the course of the next year.

The PPL/PAL/PLL book has experienced tremendous profitability over the past 25 years. Over the last six years the Net Earned Loss Ratio has been 34.25%. The highest this has ever been was under the B0621P33057016 contract in which the Gross Loss Ratio reached to a 83.71% Net Earned Loss Ratio for that contract period. This uncharacteristic activity resulted from a single claim which involved what the insured called a meritless, pre-suit settlement with $10,454. The insured implicated in that claim has been non-renewed and moved to another program. In subsequent contract periods, 2018 stands at 17.58%, 2019 at 59.17%, 2020 at 2.08% and 2021 at 0.00% Net Earned Loss Ratios. We anticipate that this program will continue its profitable trend moving forward.

The remaining lines, AML, IBL, MPL and LPL, have a combined total gross written premium of $48,135, down from $83,802 last year, $62,441 the prior year and $45,705 the year before that. The per-policy average for LPL stands at $5,042, and for the remaining lines, $2,599. There have been no new claims reported on any of these lines in the past three years.

We genuinely appreciate underwriters continued support and look forward to improving the scope and profitability of all the lines supported under this binding authority moving forward.