Structure & Shareholder Involvement

Foundation Health requires that each shareholder appoint a director to the Foundation Health Board of Directors. Every shareholder, regardless of premium size, has one vote and a simple majority governs. The strength of Foundation Health comes from the participation of its Directors.

Foundation Health provides members with the ability to share ideas related to health risk management and wellness. Networking with other like-minded members helps each group gain control of their healthcare spend. These opportunities come at annual board meetings, health risk management workshops, and webinars that are held throughout the year.

Foundation Health shareholder responsibilities include controlling claims and participating in board meetings. Shareholders are also encouraged to educate other high-quality companies about the captive concept. Management strength lies in a strong committee structure and the individual involvement of all directors during meetings held both in the Cayman Islands and other locations outside the United States. Presently, the committees and their primary responsibilities are:

FINANCE COMMITTEE

The Finance Committee will have two purposes and two distinct areas of responsibility. The two areas are discussed below:

Finance and Investment

The Finance Committee’s investment function will be to advise the Board of Directors on all policies for investment of the Company’s assets and to ensure that there is compliance with the approved policies. Due to the nature of the business, the following principles guide the Company’s investment philosophy:

• Preservation of capital
• Liquidity and marketability of holdings
• Return on assets
• Monitoring the timing of investments to ensure adequate cash flow
• Primary emphasis on fixed income investments; secondary emphasis on equities
• Seek predictable rates of return

Audit

The Finance Committee’s audit function will be to ensure that financial information is being fairly and accurately reported to the Board of Directors and, where applicable, is in compliance with generally accepted accounting principles. The following are reports and information that the Finance Committee will review:

• Annual financial statements audited by the independent auditors
• Semi-annual financial statements prepared by the Insurance Manager
• Internal audit of each shareholder insured’s Class Fund

The Finance Committee will also be responsible for reviewing any management letters from the independent auditors and for implementing any recommendations that are deemed appropriate.

HEALTH RISK MANAGEMENT COMMITTEE

The Health Risk Management Committee’s responsibilities will be to:

• Prepare reports for presentation to the Board of Directors on the overall status of the Company from a health risk management standpoint, including detailed reports where necessary.
• Periodically review the health risk management goals of the Company and make recommendations to the Board of Directors on those needing revision.
• Periodically review the shareholder insureds’ satisfaction with the wellness initiative services and claims management services provided to the shareholder insureds.

MEMBERSHIP DEVELOPMENT COMMITTEE

The Membership Development Committee’s mission will be to advise the Board of Directors on program structure.
The Membership Development Committee’s responsibilities will also include:

• Developing programs for the continuing education of Members.
• Referring prospective new Members to the Insurance Program.
• Participating in integrating new Members into the Insurance Program.

NOMINATING COMMITTEE

The Nominating Committee will be responsible for identifying individuals to act as officers and Chairpersons of the Company’s committees and recommending their appointment by the Board of Directors. The members of the Nominatig Committee will typically include the Company’s President, its immediate past President and a representative of the Insurance Consultant.