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STATE OF CONNECTICUT INSURANCE DEPARTMENT ORDER ADOPTING REPORT OF EXAMINATION I, Anne Melissa Dowling, Deputy Insurance Commissioner of the State of Connecticut, having fully considered and reviewed the Examination Report (the "Report") of National Liability & Fire Insurance Company. (the "Company") as of December 31, 2012, do hereby adopt the findings and recommendations contained therein based on the following findings and conclusions, TO WIT: 1. I, Anne Melissa Dowling, Deputy Insurance Commissioner of the State of Connecticut, and as such is charged with the duty of administering and enforcing the provisions of Title 38a of the Connecticut General Statutes ("CGS"). 2. The Company is a domestic insurer authorized to transact the business of insurance in the State of Connecticut. 3. On April 17, 2014, the verified Report of the Company was filed with the Connecticut Insurance Department (the "Department"). 4. In accordance with CGS §38a-14(e) (3), the Company was afforded a period of thirty (30) days within which to submit to the Connecticut Insurance Department a written submission or rebuttal with respect to any matters contained in the Report. 5. On May 23, 2014, the Company notified the Department of certain responses and comments relating to matters contained in the Report. 6. Following a review of the Report, it was deemed necessary and appropriate to modify the Report. A copy of the Report is attached hereto and incorporated herein as Exhibit A. www.ct.gov/cid P.O. Box 816 • Hartford, CT06l42-0816 An Equal Opportunity Employer NOW, THEREFORE, it is ordered as follows: 1. That the Report of the Company hereby is adopted as filed with the Department. 2. That the Company shall comply with all of the recommendations set forth in the Report, and that the failure of the Company to so comply shall result in sanctions or administrative action as provided by Title 38a of the CGS. Dated at Hartford, Connecticut this 28th day ofMay 2014 Anne Melissa Dowling Deputy Insurance Commissioner STATE OF CONNECTICUT INSURANCE DEPARTMENT IT IS HEREBY CERTIFIED THAT THE ANNEXED EXAMINATION REPORT OF NATIONAL LIABILITY & FIRE INSURANCE COMPANY AS OF DECEMBER 31,2012 IS A WHOLE TRUE AND CORRECT COPY OF THE ORIGINAL DOCUMENT ON FILE WITH THE CONNECTICUT INSURANCE DEPARTMENT. IN WITNESS WHEREOF, I hereunto, set my hand and affix the official seal of the Insurance Commissioner of the State of Connecticut This 28th day of May, 2014. www.ct.gov/cid P.O. Box 816 • Hartford, CT 06142-0816 An Equal Opportunity Employer STATE OF CONNECTICUT INSURANCE DEPARTMENT CERTIFIED COPY I, ANNE MELISSA DOWLING, DEPUTY INSURANCE COMMISSIONER OF THE STATE OF CONNECTICUT, HAVE COMPARED THE ANNEXED COpy WITH THE ORIGINAL RECORD ON FILE WITH THE DEPARTMENT OF INSURANCE AND DO HEREBY CERTIFY THAT IT IS A WHOLE, TRUE AND CORRECT COpy OF THE ORIGINAL RECORD. WITNESS MY HAND AND SEAL OF THE INSURANCE COMMISSIONER OF THE STATE OF CONNECTICUT THIS 28TH DAY OF MAY, 2014 Anne Melissa Dowling Deputy Insurance Commissioner www.ct.gov/cid P.O. Box 816 • Hartford, CT 06142-0816 An Equal Opportunity Employer Exhibit A EXAMINATION REPORT OF NATIONAL LIABILITY & FIRE INSURANCE COMPANY AS OF DECEMBER 31, 2012 BY THE CONNECTICUT INSURANCE DEPARTMENT TABLE OF CONTENTS Salutation Scope ofExamination History 2 Organizational Chart 3 Management and Control 4 Insurance Coverages 6 Territory and Plan of Operation 6 Reinsurance 7 Information Technology Controls 9 Related Party Transactions 9 Accounts and Records 10 Financial Statements 10 Assets 10 Liabilities, Surplus and Other Funds 11 Statement of Income 12 Losses and Loss Adjustment Expenses (LAE) 13 Policyholders Surplus 13 Subsequent Events 14 Conclusion 14 Signature 15 April 17,2014 The Honorable Thomas B. Leonardi Insurance Commissioner State of Connecticut Insurance Department 153 Market Street, 6th Floor Hartford, Connecticut 06103 Dear Commissioner: In compliance with your instructions and pursuant to the requirements of Section 38a-14 of the Connecticut General Statutes (CGS), the undersigned has made an examination of the conditions and affairs of NATIONAL LIABILITY & FIRE INSURANCE COMPANY (hereinafter referred to as the Company or NL&F), a corporation with capital stock, incorporated under the laws of the State of Connecticut and having its statutory horne office located at 100 First Stamford Place, Stamford, Connecticut and its main administrative office located at 3024 Harney Street, Omaha, Nebraska. The report on such examination is submitted herewith. SCOPE OF EXAMINAnON The previous examination of the Company was conducted by the Financial Regulation Division of the Connecticut Insurance Department (Department) as of December 31, 2009. The current examination, which covers the period from January 1, 2010 to December 31,2012, was conducted at the statutory horne office of the Company. The examination of the Company was part of the Berkshire Hathaway Group's (Group), National Indemnity Company (NICO) and Homestate Company (BHHC) coordinated examination that included nineteen regulated entities domiciled in eight states. The Nebraska Department of Insurance (Nebraska), as the lead state of the Group, assumed the responsibility of the coordinating state for the 2012 financial examination cycle. Implementing the coordinated exam facilitated communication among states and led to a more efficient use of resources while reducing duplication of work. As part of the examination planning procedures, the Department reviewed the following materials submitted by the Company from 2010 through 2012: • Board of Director (Board) and other committee minutes (through the latest 2013 minutes); NATIONAL LIABILITY & FIRE INSURANCE COMPANY • Audit reports completed by the CPA firm retained by the Company; • Management Discussion and Analysis; • Statement of Actuarial Opinion; • Internal Audit Reports; • Documentation supporting the Sarbanes Oxley Act testing; and • Annual Statements filed with the Department. A review of the 2009 through 2012 independent audit reports and a comprehensive analysis of the Company's financial statements and other filings submitted to the Financial Analysis Unit of the Department indicated no material concerns with respect to financial condition or regulatory compliance issues. Workpapers prepared by the Company's independent public accountants, Deloitte & Touche LLP (D&T), in connection with its annual statutory audit were reviewed and relied upon to the extent deemed appropriate. The examination was conducted on a full scope, comprehensive basis in accordance with the procedures outlined in the National Association of Insurance Commissioners (NAIC) Financial Condition Examiners Handbook (Handbook). The Handbook requires that we plan and perform the examination to evaluate the financial condition and identify prospective risks of the Company by obtaining information about the Company, including corporate governance, identifying 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 compliance with the NAIC Accounting Practices & Procedures Manual (Manual) and Annual Statement Instructions. Comments in this report are generally limited to exceptions noted or to items considered to be of a material nature. Failure of items in this report to add to totals or for totals to agree with captioned amounts is due to rounding. HISTORY The Company was incorporated on April 23, 1957, under the Illinois Insurance Code and commenced business December 9, 1958, as the Home and Automobile Insurance Company. In 1971, the Company was acquired by NICO, a subsidiary of Berkshire Hathaway Inc. (BHI). In 1980, BHI purchased all of the Company stock from NICO and the Company became a wholly-owned subsidiary of BHI. In 1987, the Company changed its name to NL&F. The Company redomesticated from Illinois to Connecticut on December 6, 1995. 2 NATIONAL LIABILITY & FIRE INSURANCE COMPANY BHI acquired General Reinsurance Corporation (General Re) on December 21, 1998. The acquisition of General Re led to a reorganization of the original BHI insurance companies. A new holding company, OBH Inc., was created. As a result of this transaction, aBH Inc., a Delaware corporation, became the parent company of NL&F and OBH Inc. became a wholly-owned subsidiary of BHI. On January 28, 2010, OBH Inc. converted its form to a Delaware limited liability company and changed its name to OBH LLC. BHI, the sole shareholder of OBH Inc., became the sole member of OBH LLC. The Company's direct parent company as of December 31,2011, OBH LLC, merged on January 1,2012, into BHI with BHI being the surviving corporation. BHI, a Delaware corporation, directly owns all shares of the Company as of January 1,2012. ORGANIZATIONAL CHART The following is a partial organizational chart as of December 31,2012: Berkshire Hathaway Inc. (DE) National Liability & Fire Insurance Company (CT) Warren E. Buffett owned 34.787% of the voting interest in BHI at December 31,2012. 3 NATIONAL LIABILITY & FIRE INSURANCE COMPANY MANAGEMENT AND CONTROL The bylaws state that a meeting of the stockholders of the Company shall be held each year at the principal office of the Company in Connecticut, or at such other place as determined by the Board and stated in the notice to shareholders, during the first five months of the calendar year. The purpose of such meeting is the election of the Board members and the transaction of such other business as may properly come before the meeting. Special meetings of the shareholders may be called by the president, the Board or the holders of not less than ten percent of all the outstanding shares of the Company. In place of holding a meeting, the shareholders may, by their unanimous written consent, dispose of any matter or transact any business. A majority of the outstanding shares of the Company shall constitute a quorum. The Board, as of December 31, 2012, was elected by the sole shareholder, BHI, at a meeting held on May 10,2012.

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