Statutory Reports
As with all domestic U.S. insurers, EPIC is required to file periodic financial reports in a format stipulated by the National Association of Insurance Commissioner. Such reports must be filed by EPIC with its domiciliary state and all other states in which it does business no later than 45 days following the close of each calendar quarter except for the quarter ending December 31. For each calendar year, EPIC must file an annual financial report by the following March 1st. Statutory reports are public record and can be obtained from the insurance department in the domicile state of the insurer.

Audited Financials
In addition to the statutory financial reports required by the state insurance department, EPIC, like other insurers, must create an annual financial report on a generally accepted accounting principles (GAAP) basis. This report is sent to policyholders each year along with any proxy materials that require the vote of policyholders. Such financial reports are reviewed and audited by the company’s independent auditing firm.

Company Retention
EPIC retains the first $300,000 of each claim against its policyholders and cedes the remaining $700,000 to its reinsurers. Thus, EPIC retains what is called “the frequency risk” while passing off “the severity risk” to reinsurance companies.

Reinsurance
As a new company EPIC requires protection against catastrophic or “shock” losses. Accordingly, EPIC has arranged reinsurance to provide such protection. EPIC’s reinsurance treaty is insured by several syndicates in Lloyd’s of London and three major European reinsurers.