DIF - Cascade Insurance and Reinsurance Company (CIRCO)

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The proposed project envisages that the EBRD subscribes to a capital increase in Cascade Insurance and Reinsurance Company (the “Company”) to acquire a 35% stake. The investment will provide additional financing to cover regulatory capital requirements and to develop the Company’s infrastructure, sales network and to introduce new commercial and personal lines insurance products. It is envisaged that, subject to the performance of the Company, the EBRD will subscribe pro-rata to forecast capital increases between 2006 and 2008. The project will promote the development of, and competition in, the provision of primarily non-life insurance products in Armenia (where, in 2004, insurance penetration, measured as gross premiums written as a percentage of GDP, was estimated at less than 0.2%). By setting high standards for corporate governance, the project is designed to assist Cascade Insurance and Reinsurance Company in meeting, and demonstrating to the market, international standards of transparency and business conduct. Cascade Insurance and Reinsurance Company, a limited liability company licensed (in January 2005) and operating as an insurance company in Armenia. The Company is currently a 99.9% owned subsidiary of Cascade Capital Holdings, Armenia, which is in turn owned by Cafesjian Family Foundation, a US non-profit tax exempt organisation (501(c)3 designation) set up to promote the well-being of Armenians and to foster economic development and western orientated values in Armenia. Approximately USD 0.5 million equity (including potential capital increases) Approximately USD 1.5 million (including potential capital increases) The environmental risks associated with Cascade Insurance and Reinsurance Company’s operations are low. Policies generally exclude environmental liability, but coverage of environment-related damages is possible in conjunction with appropriate reinsurance. In order to mitigate environmental impact the Company will conduct its life insurance operations (both underwriting and investment activities) in accordance with the EBRD’s Guidelines for Investments in the Insurance Sector. None. Jonathan Stark Cascade Capital Holdings 5/1 H. Kochar Street Yerevan 375033 Armenia Email: jonathanstark@cascadecapitalholdings.com