STATE OF OREGON DEPARTMENT OF CONSUMER & BUSINESS SERVICES INSURANCE DIVISION

Transcription

1 STATE OF OREGON DEPARTMENT OF CONSUMER & BUSINESS SERVICES INSURANCE DIVISION REPORT OF FINANCIAL EXAMINATION OF FARMERS INSURANCE COMPANY OF OREGON HILLSBORO, OREGON ASOF DECEMBER 31, 2013

2 STATE OF OREGON DEPARTMENT OF CONSUMER AND BUSINESS SERVICES INSURANCE DIVISION REPORT OF FINANCIAL EXAMINATION OF FARMERS INSURANCE COMPANY OF OREGON HILLSBORO, OREGON NAIC COMPANY CODE ASOF DECEMBER 31, 2013

3 TABLE OF CONTENTS SALUTATION... 3 SCOPE OF EXAMINATION... 4 COMP ANY HISTORY... 4 Capital Stock... 5 Dividends to Stockholders and Other Distributions... 5 Surplus Note... 5 CORPORATE RECORDS... 6 Board of Director Minutes... :... 6 Articles of Incorporation Bylaws... 6 MANAGEMENT AND CONTROL... 7 Board of Directors... 7 Officers... 8 Conflict of Interest... 8 Insurance Company Holding System... 8 INTERCOMPANY AGREEMENTS FIDELITY BOND AND OTHER INSURANCE TERRITORY AND PLAN OF OPERATION GROWTH OF THE COMPANY LOSS EXPERIENCE REINSURANCE Intercompany Reinsurance and Pooling Agreement Risk Retention and Transfer Insolvency Clause ACCOUNTS AND RECORDS STATUTORY DEPOSITS COMPLIANCE WITH PRIOR EXAMINATION RECOMMENDATIONS SUBSEQUENT EVENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS Note 1 -Investments Note 2 -Actuarial Reserves SUMMARY OF COMMENTS AND RECOMMENDATIONS CONCLUSION ACKNOWLEDGMENT AFFIDAVIT... 23

4 SALUTATION May29, 2015 Honorable Laura N. Cali, Commissioner Department of Consumer and Business Services State of Oregon 350 Winter Street NE Salem, Oregon Dear Commissioner: In accordance with your instructions and guidelines in the National Association of Insurance Commissioners (NAIC) Examiners Handbook, pursuant to ORS and , respectively, we have examined the business affairs and financial condition of FARMERS INSURANCE COMPANY OF OREGON NW Bennett Street Hillsboro, Oregon NAIC Company Code hereinafter referred to as the "Company." The following report is respectfully submitted. 3

5 SCOPE OF EXAMINATION We have performed our multi -state examination of Farmers Insurance Company of Oregon. This examination was conducted as part of the coordinated examination of the underwriting pool of Farmers Group, Inc., under the lead of the California Department of Insurance. The last examination of this property and casualty insurer was completed as of December 31, This is a full-scope examination covering the period January 1, 2010, to December 31, All accounts and activities of the Company were considered in accordance with the risk-focused examination approach. We conducted our examination pursuant to ORS and in accordance with ORS (1) which allows the examiners to consider the guidelines and procedures in the NAIC Financial Condition Examiners Handbook. The handbook requires that we plan and perfonn the examination to evaluate the financial condition and identify prospective risks of the Company by obtaining information about the Company, including corporate governance, identifying and assessing inherent risks within the Company, and evaluating system controls and procedures used to mitigate those risks. An examination also includes assessing the principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation, management's compliance with statntory accounting principles, annual statement instructions, and Oregon statutes and administrative rules. COMPANY HISTORY The Company was incorporated in Oregon in 1970 and received a Certificate of Authority on September 15, 1970, to transact property, casualty (excluding workers' compensation), marine and transportation, and surety lines of business. An amended Certificate of Authority was issued on December 23, 1987, adding the authority to transact workers' compensation. 4

6 In September 1998, the Company's ultimate parent was acquired by Zurich Insurance Company as part of a dual holding company structure under the name Zurich Financial Services Group. In October 2000, this strncture was simplified under a single holding company based in Switzerland. Capital Stock Under Article II of the Restated Article of Incorporation, the Company is authorized to issue 100,000 shares of common stock of $100 par value per share. The outstanding common stock certificates are as follows: Certificate Number Total Date Issued 2/28/1992 6/23/ /27/2001 9/30/2008 Common Shares 8,000 12,800 2,600 2, Capital Stock $ 800,000 1,280, , ,000 $ Owner Farmers Insurance Exchange Farmers Insurance Exchange Trnck Insurance Exchange Trnck Insurance Exchange During the period under examination, there were no changes in the Company's paid in and contributed surplus account. Dividends to Stockholders and Other Distributions During the period under examination, the Company did not declare or pay any dividend to its stockholder or malce any distribution. Surplus Note In December 2003, the Company issued surplus notes in the amount of $87.5 million to Farmers New World Life Insurance Company, an affiliate, at an interest rate of 6.15% with a due date of December 31, On October 10, 2005, the surplus note was transferred to Farmers Group, Inc., and transferred again to Zurich Group Holdings on November 21, On June 30, 2008, the surplus note was assigned by Zurich Group Holdings to Zurich 5

7 American Insurance Company. Interest on the notes total $2,690,625 semi-annually, with no principal payments due imtil maturity. Three interest payments amounting to $8,071,875 were made during the period under examination and each were properly approved by the director pursuant to ORS (1) and OAR The surplus note was paid in full, plus accrued interest, on August 31, 2011, with the approval of the Oregon Insurance Division. CORPORATE RECORDS Board o(director Minutes In general, the review of the Board meeting minutes of the Company, as well as the executive and finance committees authorized by the Board, indicated the minutes support the transactions of the Company and clearly describe the actions taken by its directors and officers. A quorum, as defined by ORS , met at all of the meetings held during the period under review. Articles of Incorporation The restated Articles of Incorporation were filed with the Oregon Insurance Division on June 23, No changes were made during the period under examination. The Articles of Incorporation conformed to the Oregon Insurance code. Bvlaws The Company's Bylaws were adopted on August 21, 1970, and restated twice; once in 1981 and again in The Bylaws were not amended during the period under examination. The Bylaws conformed to Oregon statutes. 6

8 MANAGEMENT AND CONTROL Board o(directors Management and control of the Company was vested in a Board of Directors. The Company's Bylaws, in Section 11, stated that the Board shall be comprised of seven (7) members. Section 14 described a quorum as a majority of the number of directors. As of December 31, 2013, the Company was governed by a seven member Board of Directors as follows: Name and Address Kenneth W. Bentley Douglas A. Blanc Dale A. Marlin Principal Affiliation Insurance Executive Farmers Insurance Group Head of Sales Farmers Insurance Northwest Territory Retired Member Since Ronald G. Myhan Laguna Beach, CA Larry M. Pratt Donald E Rodriguez JohnT. Wou Exec. VP and Treasurer Farmers Insurance Group VP Sales & Distribution Insurance Farmers Insurance Northwest Territory Executive Director Boys and Girls Club President, First Avenue Educational Inc. President, Golden Apple Group International Inc The Company's Board of Directors was in compliance with ORS

9 Officers Principal officers serving at December 31, 2013, were as follows: Office Larry M. Pratt Doren E. Hohl Ronald G. Myhan Brian F. Murphy Karen L. Williams James L. Nutting Jeffrey M. Sauls President VP and Secretary VP and Treasurer VP VP VP VP Conflict of Interest The Company requires officers and directors annually to report any conflicts of interest or violations of ethical business practices to the Company. From a review of the completed conflict of interest statements, it appeared that the affected personnel performed due diligence in completing the statements. No material conflicts of interest were noted. Insurance Company Holding System The Company is part of an insurance company holding system in which Zurich Insurance Group Ltd is the ultimate controlling entity. The holding company contains approximately 185 separate entities, but the following condensed organizational chart depicts the relationships relevant to the Company within the holding company system: 8

10 Zurich Insurance Group Ltd a Swiss stock corporation ultimate controlling entity 1 100% ' Zurich Insurance Company, Ltd. a Swiss P &C insurer ' ' Zurich RegCaPs Funding LP A series of DE limited partnerships (ZIC - General Partner : ZFS - Limited Partner) 10375% 1.725% 87.9% Farmers Group, Inc. dba Farmers Underwriting Association a NV holding corporation ' ' Farmers Insurance Exchange a CA inter-insurance exchange 100% Truck Underwriting Association a CA holding company Truck Insurance Exchange a CA inter-insurance exchange I 80% I 20% Farmers Insurance Company of Oregon an OR stockp&c insurer Both the Farmers Insurance Exchange and the Truck Insurance Exchange are inter-insurance exchanges, with Farmers Group, Inc., as the attorney-in-fact. A description of each of the entities above is as follows: Zurich Insurance Group Ltd (Zurich), formerly Zurich Financial Services Ltd, is a Swiss financial corporation serving as a holding company for global insurance risk management operations. It would be considered the ultimate controlling entity of the Company. Zurich Insurance Company Ltd (ZIC) is a Swiss property and casualty insurer owned 100% by Zurich. 9

11 Farmers Group, Inc. (FGI), dba Farmers Underwriters Association, is a holding company providing insurance management services. Together with its wholly owned subsidiaries, Tmck Underwriters Association and Fire Underwriters Association, they act as the attomeysin-fact for three reciprocal inter-insurance exchanges - Farmers Insurance Exchange, Tmck Insurance Exchange, and Fire Insurance Exchange. Neither Fire Underwriters Association nor Fire Insurance Exchange are direct or indirect owners of the Company, and were not included in the organizational chart above. In this stmcture, the exchanges hold the insurance risk, while FGI earns management fees by running the exchanges' affairs. Farmers Insurance Exchange (FIE) and Tmck Insurance Exchange (TIE) are two of the three reciprocal inter-insurance exchanges formed by FGI to own and operate subsidiary insurance companies. Together, they own I 00% of the outstanding common shares of the Company, and would be considered the direct parent. INTERCOMPANY AGREEMENTS The Company was party to the following agreements with its parent and affiliates as of December 31, 2013: Service Agreement Effective March 1, 2010, the FIE entered into a new service agreement (supersedes prior agreement between the two parties) with the Company to provide: a) insurance policies, premium calculations, and arranging for commission payments to agents and producers; b) receiving applications from licensed agents, underwriting applications and issuing policies; c) maintaining adequate policyholder and agent records; d) policyholder billings, properly recording and accmmting for monies received; e) preparing all necessary forms required to properly administer the Company; J) providing claims adjustment services, and; g) such other JO

12 services as necessary. FIE further agrees to provide or arrange for investment services for the Company for an additional fee. The Company agrees to pay all costs and expenses actually incurred by FIE. The agreement requires FIE to provide all services at cost, allocated in accordance with the methods prescribed in SSAP No. 70. Arnoimts payable shall be detennined and settled monthly, as soon after the end of the month as can reasonably be performed. Tax Sharing Agreement A Tax Sharing Agreement was executed on August 14, 2012, but effective as ofjuly 1, 2009, among the affiliated companies, including the Company. This agreement supersedes the Tax Sharing Agreement dated as of July 3, 2007, and both added and removed parties to the agreement. Under the terms of the agreement, FIE will make all payments due for the group's federal tax liability and each member of the group shall reimburse FIE subsequent to the payment. Each party shall then compute its separate tax liability, including any tax credit available for that period, using a separate return basis, as if each member filed their return separately. Final settlement will be made within 30 days after the filing date of the consolidated return. FIDELITY BOND AND OTHER INSURANCE At December 31, 2013, Farmers Group, Inc., was covered for up to $10,000,000 per occurrence, $20,000,000 aggregate, after a $1,000,000 deductible, against losses from acts of I dishonesty and fraud by its employees. This fidelity bond coverage met the coverage recommended by the NAIC. Other insurance coverages protect the Company from fiduciary liability and director and officer liability in amounts that were determined to be sufficient. 11

13 TERRITORY AND PLAN OF OPERATION As of December 31, 2013, the Company was authorized to write property, casualty including workers' compensation, marine and transportation, and surety business in Oregon. Company was also authorized to write business in California and Michigan. The Direct premiums written in 2013 were: California Michigan Oregon Total Direct Premium $ ,660,458 $317,660,458 GROWTH OF THE COMPANY The growth of the Company over the past five years is reflected in the following schedule. The ammmts were derived from Company's filed annual statements, except in those years where a report of examination has been prepared by the Oregon Insurance Division. Surplus and Net Income Year Assets Liabilities Other Funds (Loss) 2009 $1,469,117,183 $ 911,356,266 $557,760,917 $ 35,395, * 1,641,496,505 1,080,929, ,566,562 (18,204,685) ,577,191,275 1,118,507, ,683,891 (11,773,601) ,600,344,315 1,130,130, ,213,348 6,422, * 1,614,930,075 1, 124,642, ,287,784 21,887,451 *Per examination During 2011, the Company repaid a surplus note in the amount of $87,500,000, plus interest, to an upstream affiliate. LOSS EXPERIENCE The following exhibit reflects the annual underwriting results of the Company over the last five years. The amounts were compiled from copies of the Company's filed annual statements and, where indicated, from the previous examination reports. 12

14 (1) (2) (3) (2)+(3)/(1) Premiums Losses and LAE Other Underwriting Combined Year Earned Incurred ExQenses Incurred Ratio 2009 $ 711,683,718 $472,313,740 $221,570, % 2010* 746,091, ,530, ,031, % ,018,041, ,719, ,723, % ,100, ,676, ,485, % 2013* 960,710, ,659, ,618, % *Per examination REINSURANCE Intercompany Reinsurance and Pooling Agreement All of the Company's retained business is transacted through a pooling agreement with FIE, which was last amended effective January 1, FIE is the lead insurer in an intercompany reinsurance and pooling agreement under which the insurers listed below pool their risks and obtain a proportional share of profits and/or losses of the pooled business. The 1999 Intercompany Reinsurance and Pooling Agreement became effective on January 1, This agreement superseded the previously issued reinsurance pooling agreement entered into on December 31, 1985, and as subsequently amended. The reinsurance participants and their respective participation percentages are as follows: Participant Farmers Insurance Exchange Truck Insurance Exchange Fire Insurance Exchange Farmers Insurance Company of Oregon Fam1ers Insurance Company of Washington Mid-Century Insurance Company Texas Farmers Insurance Company Farmers Insurance of Columbus, Inc. Civic Property and Casualty Company Exact Property and Casualty Company Neighborhood Spirit Property and Casualty Company Farmers Insurance Company, Inc. (Kansas) Illinois Farmers Insurance Company Farmers New Century Insurance Company Farmers Insurance Company ofidaho Total Percentage _

15 The risk assumed is net of external reinsurance acquired by the pool leader and includes treaties ceding risks to non-affiliated reinsurers that were written with the FIE and all of its subsidiaries and affiliates as the cedents. Risk Retention and Transfer It was determined that the pooling agreement provided for risk transfer in accordance with the requirements of SSAP No. 62. Insolvency Clause The reinsurance agreements contained a proper insolvency clause that specified payments would be made to a statutory successor without diminution in the event of insolvency, as required by the provisions of ORS ACCOUNTS AND RECORDS The Company's records and source documentation supported the amounts presented in the Company's December 31, 2013, annual statement and were maintained in a manner by which the financial condition was readily verifiable pursuant to the provisions of ORS STATUTORY DEPOSITS At year-end 2013, the Company maintained deposits with the Oregon Insurance Division in the amount of $3,314,000 (par value) for the purposes of complying with workers' compensation deposit requirements pursuant to ORS In addition, the Company maintained deposits in the State of Michigan in the sum of $1,972,000 (par value). These deposits were verified from the records of the Michigan Office of Finance and Insurance Regulation. 14

16 COMPLIANCE WITH PRIOR EXAMINATION RECOMMENDATIONS The prior report of examination did not identify any examination recommendations. SUBSEQUENT EVENTS Our examination did not uncover any material subsequent events affecting the Company. FINANCIAL STATEMENTS The following examination financial statements show the financial condition of Farmers Insurance Company of Oregon: Assets Liabilities, Surplus and Other Funds Summary of Operations Reconciliation of Surplus for the Period Since the last Examination The financial statements are presented on the basis of statutory accounting practices permitted or prescribed by the Oregon Insurance Division as of December 31,

17 FARMERS INSURANCE COMPANY OF OREGON ASSETS December 31, 2013 Balance per Examination Balance per Assets Company Adjustments Examination Notes Bonds $1,323,832,744 $ $1,323,832, 744 Cash, cash equivalents and short-term investments 3,873,755 3,873,755 Securities lending reinvested collateral assets 25,443,938 25,443,938 Aggregate write-ins for invested assets --- Subtotal, cash and invested assets $1,353, $ $1,353, Investment income due and accrued 10,827,367 10,827,367 Premiums and considerations Uncollected premiums and agents' balances in the course of collection 18,474,318 18,474,318 Deferred premiums, agents' balances and instalhnents not yet due 164,078, ,078,227 Accrued retrospective premiums 167, ,376 Amounts recoverable from reinsurers 16,991,292 16,991,292 Net deferred tax assets 49,229,285 49,229,285 Aggregate write-ins for other than invested assets Oil 774 Total Assets $ $ NOTE: Total assets differ from total liabilities, surplus and other funds due to rounding. 16

18 FARMERS INSURANCE COMPANY OF OREGON LIABILITIES, SURPLUS AND OTHER FUNDS December 31, 2013 Balance per Company Examination Adjnstments Balance per Examination Notes Losses $ 444,655,240 $ Reinsurance payable on losses and Jae 57,383,148 Loss adjustment expenses 131,294,773 Other expenses 715,378 Taxes, licenses and fees 530,274 Unearned premiums 419,803,794 Advance premiums 10,354,660 Dividends declared but unpaid 215,360 Ceded reinsurance premium payable 15,938,913 Payable to parent, subsidiaries and affiliates 11,156,836 Payable for securities lending 25,443,938 Aggregate write-ins for liabilities Total Liabilities $1,124,642,294 $ 444,655,240 57,383, ,294, , , ,803,794 10,354, ,360 15,938,913 11,156,836 25,443, $1,124,642, Aggregate write-in for special surplus funds $ (683,535) $ Common capital stock 2,600,000 Gross paid in and contributed surplus 266,550,000 Unassigned funds (surplus) 221,821,319 Surplus as regards policyholders $ $ (683,535) 2,600, ,550, ,821,319 $ ,784 Total Liabilities, Surplus and other Funds,H, [4.~;30,0_7_8 $1,614,930,078 NOTE: Total assets differ from total liabilities, surplus and other fonds due to rounding. 17

19 FARMERS INSURANCE COMPANY OF OREGON STATEMENT OF INCOME For the Year Ended December 31, 2013 Underwriting income Balance per Company Examination Adjustments Balance per Examination Notes Premium earned $ 960,710,130 $ Deductions Losses incurred 546,032,886 Loss adjustment expenses incurred 95,626,885 Other nnderwriting expenses incurred 331,618,974 Aggregate write-ins for underwriting deductions Net underwriting gain (loss) 973,278,745 $ 960,710, ,032,886 95,626, ,618, ,278,745 Investment income Net investment income earned 39,139,920 Net realized capital gains (losses) Net investment gain (loss) 39,413,512 39,139, ,413,512 Other income Net gain (loss) from agents' or preminm balances charged off (7,368,883) Finance and service charges not included in premiums 16,609,381 Aggregate write-ins for miscellaneous income (3,270,317) 'fatal other income Net income before dividends to policyholders and FIT incurred 32,815,078 Dividends to policyholders 67,858 Federal income taxes incurred Net income,'lll $ (7,368,883) 16,609,381 (3,270,317) ,815,078 67, $2-l,882,452 18

20 FARMERS INSURANCE COMPANY OF OREGON RECONCILIATION OF SURPLUS FOR THE PERIOD SINCE LAST EXAMINATION For the Year Ended December 31, Surplus as regards policyholders, December 31, previous year $ ,350 $ $560,566,563 $557,760,917 Net income 21,887,452 6,422,356 (11,773,601) (18,204,685) Change in net umealized capital gains or (losses) 292,671 1,134,118 1,982,743 3,605,315 Change in net umealized foreign exchange capital gain or (loss) Change in net deferred income tax (1,104,354) 6,154,730 (5,475,063) 7,258,765 Change in non-admitted assets (1,018,516) (2,372,008) 1,364,375 4,178,942 Change in provision for reinsurance Change in surplus notes (87,500,000) Cumulative effects of changes in accounting principles Capital changes: Paid in Transferred from surplus (Stock Dividend) Transferred to surplus Surplus adjustments: Paid in Transferred to capital (Stock Dividend) Transferred from capital Net remittances from or (to) Home Office Dividends to parent (cash) Change in treasury stock Examination adjustments (3) Aggregate write-ins for gains and losses in surplus (481,124) Change in surplus as regards policyholders for the year 20,074, Jl91,882,670) -~05,645 Surplus as regards policyholders, December 31, current year $490,; $ $158, l Examination adjustment was due to rounding errors. 19

21 Note 1 - Investments NOTES TO THE FINANCIAL STATEMENTS Most of the Company's long-term bond investments were well diversified in US Treasury obligations, federal agency bonds, municipal obligations, and corporate issues. The Company did have an exposure to mortgaged-backed and asset-backed securities. All MBS/ABS issues were investment rated at year-end 2014, and the book carrying value of $287.4 million comprised over 21.7% of the total long-term bond portfolio, or almost 21.2% of all invested assets. Cash and short-term deposits consisted of cash on deposit and two short-term money market funds. A comparison of the investments over the past five years is as follows: A B Cash and Ratio A/ Ratio B/ Year Bonds Short Term Total Assets Total Assets 2009 $1,164,425,224 $ 77,266, % 5.3% ,185,814, ,399, % 7.1% ,267,094,104 34,319, % 2.2% ,300,391,748 4,069, % 0.3% ,323,832,744 3,873, % 0.2% The Board of Directors approved the investment transactions, pursuant to ORS As of December 31, 2013, sufficient invested assets were invested in amply secured obligations of the United States or FDIC insured cash deposits, as required by ORS The Company entered into a custodial agreement with June 4, The agreement contains the protections required lmder OAR (4)(a) through (1). Note 2-Actuarial Reserves Mr. David Dahl, FCAS, MAAA, Oregon's Property and Casualty actuary reviewed the findings of the coordinated examination's contract actuary. He noted that the Oregon Insurance Division can rely on the actuarial analysis of the Farmers Insurance Group and the rep01i's conclusion that the stated loss and loss adjustment expenses reserves as of December 31, 2013, is reasonably stated. Farmers Insurance Company of Oregon assumes 7% of the loss and ALAE through an inter-company reinsurance program with several insurers in the Farmers Insurance Group and this reinsurance program is the source for all the Company's carried loss and loss adjustment expense liability as of December 31, The loss and adjustment liability as of December 31, 2013, for Farmers Insurance Company of Oregon appears to be reasonably stated. 20

22 SUMMARY OF COMMENTS AND RECOMMENDATIONS The examiner made no changes to surplus as a result of this examination and there were no recommendations. CONCLUSION During the four year period covered by this examination, the surplus of the Company has decreased from $557,760,917, as presented in the December 31, 2009, report of examination, to $490,287,783, as shown in this report of examination. There were no adjustments made to the financial statements as a result of this examination. The comparative assets and liabilities are shown below: 2013 December 31, 2009 Change Assets Liabilities Surplus $1,614,930,075 1,124,642,292 $ 490, $1,469,117, ,266 $ $145,812, ,286,026 $(67.473,134) 21

23 ACKNOWLEDGMENT The cooperation and assistance extended by the officers and employees of the Company during the examination process are gratefully aclmowledged. In addition to the undersigned, Timothy Hurley, CFE, and Keilei Yambaw, insurance exan1iners for the State of Oregon, Department of Consumer and Business Services, Insurance Division, participated in the examination. Respectfully submitted,,:9'~r=n=e,~c~f~":if"~,~c=ie~.. ~. ~~~~~ Lead Insurance Examiner Department of Consumer and Business Services State of Oregon 22

24 AFFIDAVIT STATE OF OREGON ) ) SS County of Marion ) Joseph A. Rome, CFE, CIE, being duly sworn, states as follows: 1. I have authority to represent the state of Oregon in the examination of Farmers Insurance Company of Oregon, Hillsboro, Oregon. 2. The Insurance Division of the Department of Consumer and Business Services of the state of Oregon is accredited under the National Association of Insurance Commissioners Financial Regulation Standards and Accreditation. 3. I have reviewed the examination work papers and examination report, and the examination of Fanners Insurance Company of Oregon was performed in a manner consistent with 1he standards and procedures required by the Oregon Insurance Code. The affiant says nothing further. O~. /~ ~~e,cfe Lead Financial Examiner Department of Consumer and Business Services State of Oregon Subscribed and swam to me this.jf day of L~~~e ~~-' / My Commission Expires: ~.;l-p 01/ OFFICIAL SEAL LINDA J ROTHENBERGER NOTARY PUBLIC OREGON COMMISSION NO MY COMMISSION EXPIRES MARCH 22,