Unfortunately all too often companies default on their payments to vendors or file for bankruptcy protection. Various factors may be the cause: Management deficiencies, financial restructuring, regulatory changes, product liability exposure, legal maneuvering, political upheaval, or even, as recent history has proven, regional natural disasters. No matter how wonderful we feel our customer is, a creditor may never know what future circumstances will diminish the customer’s ability to pay. Accounts Receivables (Credit) Insurance can be an indispensable credit risk management product reducing risk in an unpredictable marketplace. This Webinar will be of value to credit, financial or sales professionals who want to learn the basics of credit insurance and how using credit insurance may help their company. Specifically the speaker will cover: • Protecting Accounts Receivable from bad debt loss • How credit insurance is priced • How claims are settled • How credit insurance can be used to expand sales • Enhancing financing options • Compliance with Sarbanes-Oxley

1. Stellar Risk Management Services, Inc. Steven P. Gan, President, CPA, Licensed Insurance Provider 4528 Lindenwood, Suite 101B, Northbrook, IL 60062 Tel: 847-714-0121 Fax: 847-714-0104 www.stellarrisk.com [email_address] Credit Insurance

3. P o i n t o f S a l e Before Sales C r e d i t R e p o r t s C r e d i t I n d u s t r y G r o u p s C r e d i t I n s u r a n c e C r e d i t & C o l l e c t i o n T r a i n i n g A / R F i n a n c i n g I n v o i c e & P a y m e n t M n g m t S o f t C o l l e c t i o n A / R C o l l e c t i o n L e g a l P r o c e s s i n g D e b t P u r c h a s i n g Total Credit Risk Management System After Sales

6. Nobody Thought They Would Go Bankrupt Aladdin Gaming, LLC (Las Vegas Hotel Casino) (2001) ABB Lummus Global, Inc. (Petroleum Refining) (2006) American Banknote Corporation (1999) America Online Latin America, Inc. (2005) American Restaurant Group, Inc. (2004) Ameridebt (2004) AMF Bowling Worldwide, Inc. (2001) Atkins Nutritionals, Inc. (2005) Baldwin Piano & Organ Company (2001) Bethlehem Steel Corporation (2001) Birch Telecom, Inc. (2005) Burlington Industries Inc. (2001) Carolco Pictures Inc. (1995) Chiquita Brands International Inc. (2001) Continental Airlines Inc. (1967 & 1984) Converse Inc. (2001) Dairy Mart Convenience Stores Inc. (2001) Delphi Corporation (2005) Delta Airlines Inc. (2005) Dow Corning Corporation (1995) Eastern Airlines Inc. (1991) Enron Corporations (2001) eToys Inc. (2001) Excite@Home (2001) Frank’s Nursery & Crafts, Inc. (2004) Frederick's of Hollywood Inc. (2000) Fruit of the Loom Inc. (1999) Gadzooks, Inc. (2004) Happy Kids, Inc. (2005) Hollywood Casino Shreveport (2004) KB Toys, Inc. (2004) Kmart Corporation (2002) Lionel Corporation (1967 & 1984) Loews Cineplex Entertainment, Inc. (2000) Maidenform Inc. (1997) Marvel Entertainment Group (1996) Montgomery Ward Inc (1997 & 2000) Musicland Holding Corp. (2006) Northwest Airlines (2005) Owens Corning Corporation (2000) Pan Am Corporation (1998) Planet Hollywood International Inc.(1999 & 2001) Polaroid Corporation (2001) Purina Mills Inc. (1999) Regal Cinemas Inc. (2001) Resorts International Inc. (1994) Silicon Graphics, Inc. (2006) Singer Company (1999) Sizzler International (1996) Smith Corona Corporation (1995) Southland Corporation (7-11 stores) (1990) Sunbeam Corporation (2001) Swissair Group Inc. (2001) Toysmart.com (2000) Trans World Airlines Inc. /TWA (1995 & 2000) US Airways Group, Inc. (2004) US Office Products Company (mail boxes etc. stores) (2001) Vlasic Foods International Inc. (2001) Western Union Corporation (1993) Winn-Dixie Stores, Inc. (2005) Zenith Electronics Corporation (1999)

10. Premium Calculation Estimated Annual Sales Customer 1 $20,000 Customer 2 $10,000 Customer 3 $15,000 Customer 200 $25,000 Total Est. Sales $10,000,000 Eg. Premium rate of 0.2% (20 basis points) Estimated Premium $10,000,000 ｘ 0.20 ％ = $20,000 Minimum required premium $20,000 ｘ 80 ％ = $16,000 ※ Upon completion of the Insurance Coverage Period The actual premium will be determined based upon the Actual sales amount. The premium rate is generally between 0.1 - 0.2% of the estimated annual sales.

12. Insurance Payment Calculation Company A Company B Credit Limit Default Amount Deductible Limit $70,000 $10,000 $35,000 $22,000 $60,000 When the defaulted amount is greater than the deductible, the insurance payment is reduced by the co-insurance rate and then the deductible is subtracted to reach the insurance payment. ＜ Calculation Example ＞ Company A: $60,000 ｘ 90 ％ - $10,000 = $44,000 Company B: $22,000 ｘ 90 ％ = $19,800 The deductible is usually an aggregate deductible. Once it is used up, only the co-insurance remains in the payout calculation. There are other variations on the payout scheme which can be arranged based upon the client’s needs.

16. Examples of Trade Credit Insurance Scenarios Company A Industry: Musical Instruments Approximate annual sales: $10mm Premium rate: 0.15% Premium: $15,000 Aggregate Deductible: $10,000 Number of customers: 12 Customers are domestic, overseas, or both?: overseas Previous loss history: good Insured’s credit mgmt. system: adequate Discretionary limits? Yes Company B Industry: Industrial Equipment Approximate annual sales: $20mm Premium rate: 0.20% Premium: $40,000 Aggregate Deductible : $20,000 Number of customers: 20 Customers are domestic, overseas, or both?: overseas Previous loss history: good Insured’s credit mgmt. system: sophisticated Discretionary limits? Yes Company C Industry: Commercial Construction Approximate annual sales: $50mm Premium rate: 0.13% Premium: $65,000 Aggregate Deductible : $0 Number of customers: 80 Customers are domestic, overseas, or both?: domestic Previous loss history: good Insured’s credit mgmt. system: adequate Discretionary limits? No Company D Industry: Fashion Footwear Approximate annual sales: $112mm Premium rate: 0.1% Premium: $110,000 Aggregate Deductible : $80,000 Number of customers: 120 Customers are domestic, overseas, or both?: both Previous loss history: good Insured’s credit mgmt. system: satisfactory Discretionary limits? No

17. From Application to Contract Submit Sales, A/R, and Other Data with Application Acceptance of Contract & Implementation of Policy Proposal Is Issued Based Upon Customer Needs & Underwriting Submit & Confirm Contract Terms & Conditions