RTW Obtains License for Second Insurance Subsidiary

September 21, 2005

Minnesota-based RTW Inc., a provider of products and services to cost-effectively manage insured workers’ compensation programs and self-insured disability and absence programs, reported that it received its Minnesota insurance license for a second insurance subsidiary, Bloomington Compensation Insurance Company.

Jeffrey Murphy, president and CEO of RTW, noted, “I am pleased to announce that on September 8, 2005, the Minnesota Department of Commerce approved our license to operate Bloomington Compensation Insurance Company (BCIC), our second insurance subsidiary. BCIC will complement our existing insurance company, American Compensation Insurance Company (ACIC). We generally underwrite workers’ compensation insurance through ACIC for employers whose loss experience is worse than the industry in which the employer operates. These employers typically have higher claims frequency or higher average claim costs than their competitors. RTW has successfully reduced the insurance cost for these employers using its core competencies, ID15®, the RTW Solution® and proprietary technology solutions and, as a result, these employers become more attractive to other insurance carriers. ACIC is often unable to quote competitively on these ‘transformed’ employers as it is limited under state law in the range of pricing that it can offer based on its filed rates. We believe that through BCIC, we will be able to quote competitively where it makes sense and retain a greater share of those employers that ACIC has spent several years improving. BCIC will begin writing policies on October 1, 2005.

“Additionally, our independent insurance agents will benefit by having access to an alternative price and service model for their best clients – customers who understand and can execute return-to-work processes within their operation. Although BCIC will commence operations in Minnesota, we anticipate that BCIC will also write insurance in our other geographic markets in the future.”

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