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' COMMERCIAL ACCOUNTS <br /> Contingent and Supplemental Commission Disclosure <br /> Effective October 1, 2009, Arthur J. Gallagher&Co., and its subsidiaries operating as insurance agents/brokers <br /> under the corporate holding company known as Arthur J. Gallagher Brokerage & Risk Management Services, LLC, <br /> resumed participating in contingent commission arrangements which are routinely offered by insurance companies <br /> and intermediaries to agents and brokers, after voluntarily foregoing the benefit of this type of compensation since <br /> January 1, 2005. Contingent commission arrangements provide for additional compensation if certain underwriting, <br /> profitability, volume or retention goals are achieved. Such goals are typically based on the total amount of certain <br /> ' insurance coverages placed by Gallagher with the insurance company and/or through the intermediary, not on an <br /> individual policy basis.As a result, Gallagher may be considered to have an incentive to place your insurance <br /> coverages with a particular insurance company. <br /> ' During the time Gallagher's retail operations did not accept contingent commissions, some insurance markets and <br /> intermediaries, including Gallagher owned intermediaries, modified their commission schedule with Gallagher, <br /> resulting in an increase in some commission rates. The additional commissions, commonly referred to as <br /> ' "supplemental commissions," are known at the effective date of the policy, but some intermediaries and insurance <br /> companies are paying the commission increase apart and later from when the commission is normally paid at policy <br /> issuance. <br /> ' Unlike contingent commissions, supplemental commission payments are determined without regard to any <br /> performance factors which are contingent on future growth, retention, profitability, etc. <br /> Contingent and supplemental commission ranges from less than 1% up to 10% of written or earned premium on <br /> eligible lines of business (not all lines of business qualify). <br /> ' NOTE: Upon request, your Gallagher representative can provide more specific market information regarding <br /> contingent and supplemental commission related to your insurance coverage. <br /> 1 <br /> 1 <br /> ' I:\Users\lmiller\Proposals\Decatur Transit Management 2011.docx 9/9/11 <br />