U.S. Insurance Industry Financial Overview

Through 2014, the U.S. insurance industry continued to report consecutive years of good financial performance and, in the aggregate, remained in sound financial condition. Positive net income again raised reported surplus of both the life and health (L/H) and the property and casualty (P/C) sectors to record levels. The L/H sector reported approximately $354 billion of capital and surplus at the end of 2014, and the P/C sector reported approximately $689 billion in policyholders’ surplus, up from $332 billion and $665 billion, respectively, at the end of 2013.

The L/H and P/C sectors both also recorded increases in aggregate net written premiums in 2014. The L/H sector’s net written premiums reached $648 billion in 2014, largely the result of growth in sales of annuity products. P/C sector net written premiums were $503 billion in 2014, a record-high level. Solid gains were reported for both commercial and personal lines of business as premium rate increases and growth in the U.S. economy drove growth in aggregate premiums.
While both sectors of the insurance industry were profitable in 2014, net income for both declined from the record levels set in 2013. Growth in L/H sector revenues, which was slowed by only a slight increase in net investment income, was outpaced by growth in total expenses, and led to a 23 percent decline in pretax income compared to 2013. Significantly lower realized capital losses compared to 2013 held the decrease in net income to a lower 13 percent, or approximately $38 billion. The P/C sector reported a 9 percent decrease in net income, mainly due to a 19 percent decline in underwriting gains. The P/C sector’s loss ratio increased in 2014, following low catastrophe losses in 2013.

However, the sector’s combined ratio remained below 100 for the second consecutive year.16 P/C sector net income was reported at approximately $65 billion.
The insurance industry remained active in the U.S. capital markets. In the aggregate, the insurance industry raised $8 billion in new equity capital in 2014. Debt financing remained attractive as interest rates remained historically low, and the insurance industry sold an aggregate $37 billion in new debt.

Merger and acquisition (M&A) activity declined in 2014 in terms of the number of transactions that were announced, but the aggregate value of those deals, $14 billion, marked a 79 percent increase over the 2013 level. By the middle of 2015, M&A activity increased significantly, with announcements of five major deals, with an aggregate value of nearly $132 billion. Several of these transactions were in the health insurance sector, and might signal competitive changes in market share.

Finally, the Report also highlights the growing role of alternative risk-transfer capital in the insurance industry. While this remains a small share of the total capital committed to reinsurance underwriting, its growth continues to put downward pressure on reinsurance premiums. The past year has witnessed continued growth not only in catastrophe bonds and other insurance-linked securities, but a very rapid pace of growth in industry-loss warranties and collateralized reinsurance. Once considered an innovative market segment, these alternative forms of risk transfer appear to be taking on permanent presence in insurance markets.

EFFECTIVE DATE - Insurance USA

You will become an Insured Person when You have enrolled for Coverage under the Group Policy, paid the premium for the Coverage Period shown in the Certificate Schedule, and been accepted by United States Life. Eligible Persons who satisfy the criteria for eligibility described in the Certificate Schedule on the Policy Effective Date will have Coverage on that date.

For a person who becomes an Eligible Person after the Policy Effective Date, You will become an Insured Person at 12:01 a.m. on the date following the date United States Life or its agent approves his or her enrollment form and receives the premium due.

An Eligible Dependent’s insurance will become effective on the Insured Person’s effective date unless added at a later date as described in the “Additional Insured Persons” provision.

Your Coverage and that of Your covered dependents remains in effect for the Coverage Period.
Additional Insured Persons: You may add other Eligible Dependents who become eligible after the Coverage effective date by enrolling such dependent and paying the premium due. The premium due will be the single premium pro-rated to the end of the Coverage Period. The Coverage will be effective on the date United States Life or its agent approves the enrollment. Your Coverage will terminate at midnight at the end of the Coverage Period.

BENEFITS

BENEFIT A
ACCIDENT MEDICAL INSURANCE BENEFIT
Benefits for Covered Diving Accidents
Covered Medical Charges

United States Life will pay the benefits described below subject to the terms and limitations. Covered charges means eligible charges that are for Medically Necessary services, supplies, care, or treatment for a Covered Diving Accident. The accident must occur during the Coverage Period. The expense incurred as a result of the accident must be incurred within 365 days of the Covered Diving Accident. Such services, supplies, care or treatment must be prescribed, performed or ordered by a Physician. Charges for such services, supplies, care or treatment must be Reasonable and Customary. United States Life will not pay for charges in excess of the Lifetime Maximum shown in the Certificate Schedule.

Eligible charges include:

1. Hyperbaric Chamber Treatment Charges for up to seven treatments per Covered Diving Accident.
Any treatment after the seventh must be pre-certified by National Baromedical Services at (800) 292- 8381;

2. Physician’s charges for Hyperbaric Chamber Treatment, medical care and surgical operations;

3. Ambulance charges for transportation by a professional ground, air or marine ambulance service to the nearest Hospital or Hyperbaric Chamber where appropriate care or treatment can be given. All transportation involving air or marine ambulance service must be approved in advance by DAN TravelAssist to be eligible for reimbursement;

4. Hospital charges for:
a. room and board;
b. general nursing care, including Hyperbaric Chamber treatment;
c . other Inpatient and Outpatient services and supplies. These do not include charges for professional services;
d. confinement in an Intensive Care Unit as long as such confinement is ordered by a Physician and due to an Injury that requires special medical and nursing treatment not generally provided to other Inpatients in the Hospital.

5. Medical supply charges for oxygen;

6. Other eligible charges including:
a. ambulatory surgical charges for necessary services and supplies if:
1. the charges are due to surgery;
2. benefits for these charges would have been payable if the surgery had been done in a Hospital; and
3. such surgery is performed in an ambulatory surgical center that is operating within the scope of its license to perform such surgery.
b. surgeon’s charges for the performance of surgical procedures;
c. anesthesia charges and its administration when these are not covered as Hospital charges;
d. nursing, physiotherapy, and occupational therapy charges for:
1. private duty nursing care by a Nurse; and
2. treatment by a licensed physiotherapist; and
3. treatment by a licensed occupational therapist.
e. radiological and laboratory charges for X-rays, radiological treatment, and diagnostic laboratory
tests;
f. chiropractic services payable at $35 per visit by an Insured Person for up to 10 visits in a Coverage Period to a maximum of $350 per Insured Person per such Coverage Period.

g. medical supply charges for:
1. casts, splints, trusses, braces, crutches, and surgical dressing; and
2. artificial eyes and limbs for the initial replacement of natural eyes and limbs severed while an Insured Person; and
3. rental of manually operated wheelchairs and hospital beds, oxygen equipment and other durable medical equipment that is used solely by the Insured Person for the treatment of the Injury. United States Life may, at its discretion, approve purchase of such items.

Benefits for Accident Medical Expense
Covered Medical Charges

If an Insured Person incurs charges for treatment of Injury due to a non-Diving Accident that occurs outside his or her Home Country, United States Life will pay the benefits described below subject to the terms and limitations.

Covered charges means eligible charges that are for Medically Necessary services, supplies, care, or treatment for such Injury. The accident must occur while Coverage is in force and while the Insured Person is on a trip that is more than fifty miles from his or her primary residence and for recreational purposes only. The charge incurred as a result of the accident must be incurred within 365 days of the accident.

Such services, supplies, care or treatment must be prescribed, performed or ordered by a Physician and include medical, surgical, and emergency dental care, professional nursing, hospital, x-ray, ground ambulance services and prosthetic devices. Charges for such services, supplies, care or treatment must be Reasonable and Customary. United States Life will not pay for charges in excess of the maximum shown in the Certificate Schedule.

Exclusions for Covered Diving Accidents and Accident Medical Expense Benefits No benefits are payable for charges for:
1. services or supplies for which an Insured Person is not required to pay or charges made only because insurance exists (subject to the right, if any, of the United States government to recover Reasonable and Customary Charges for care provided in a military or veteran’s hospital);
2. a diving accident or Injury for which benefits are paid or payable under Workers’ Compensation or any Occupational Disease or similar law whether such benefits are insured or self-insured;
3. any act due to war, declared or not;
4. Custodial Care;
5. drugs and medicine that may be obtained without written prescription and/or not furnished by and administered during a Hospital confinement as an Inpatient;
6. charges that are more than the Reasonable and Customary Charges for the services and supplies furnished;
7. Hospital services and supplies when confinement is solely for diagnostic testing purposes;
8. nervous, emotional, or mental disorders;
9. a diving accident or Injury that occurs after drug or alcohol use unless such drug was prescribed by a Physician;

SOME USA INSURANCE DEFINITIONS

Arterial Gas Embolism (AGE) means signs and symptoms due to gas entering the arterial system as a result of overpressurization of gas-containing body structures during a Covered Dive.
Cohabitant means Your domestic partner, provided proof, as outlined below, is provided to United States Life:

1. evidence of financial interdependence including joint bank accounts, jointly owned property, joint credit cards or designation of beneficiary of life insurance or pension benefits;
2. evidence of cohabitation;
3. evidence of a prior relationship of at least 6 months, with an expectation of future commitment;
4. indication of an exclusive mutual commitment;
5. evidence of attainment of the age of majority;
6. statement that the person is not legally married;
7. statement that You is not related by blood to the domestic partner; and
8. if a resident of a city, municipality or other governing jurisdiction that allows for filing as domestic partners, evidence of such filing.

Common Carrier means a vehicle or service licensed to carry passengers for hire on a regularly schedule basis.

Coverage means the insurance that an Insured Person has under the Group Policy.

Covered Dive means a recreational dive or diving while a scuba instructor, dive master, underwater photographer, or while performing research under the auspices and following the diving safety guidelines of the American Academy of Underwater Scientists (AAUS). A dive begins upon entry into the water and ends upon exit from the water. A Covered Dive must begin while Coverage is in force.

Covered Diving Accident means DCI or any Injury as the result of a Covered Dive, regardless of the depth.

Custodial Care means care:
1. provided primarily for the maintenance of the Insured Person; and
2. essentially designed to assist the Insured Person in the activities of daily living.

Custodial care does not include care primarily provided for its therapeutic value in the treatment of Injury.

Decompression Illness (DCI) means Decompression Sickness (DCS) or Arterial Gas Embolism (AGE).
Such illness must be a direct result of a Covered Dive.

Decompression Sickness (DCS) means signs and symptoms due to gas in the tissues resulting from a Covered Dive.

Diving Equipment means diving equipment that is worn on the diver’s person that is lost or damaged due to an Injury or DCI that requires urgent transportation or hospitalization. Diving Equipment does not include watches, their glasses or covers, torn straps or buckles, or photographic equipment of any kind.

Eligible Person means a person or dependent who satisfied the eligibility requirements for the Policyholder. The classes of Eligible Persons and Eligible Dependents are described in the Certificate Schedule.

Home Country means the country where the Insured Person permanently resides. Such country must be declared in advance with United States Life.

Hospital means an institution that is run for the care and treatment of sick or injured persons as inpatients and meets all the following requirements:
1. is operated according to the laws pertaining to hospitals in the jurisdiction in which it is located;
2. is under the supervision of a medical staff and has one or more physicians available at all times;
3. maintains organized facilities for major surgery or has facilities available to it on a pre-arranged basis;
4. provides 24 hours a day service by registered graduate nurses (RN’s); and
5. is not, other than incidentally a place for the aged or mentally ill or a nursing or convalescent home.

Hyperbaric Chamber means a pressure vessel approved for recompression of diving accident victims and/or use of hyperbaric oxygen therapy, specifically for use for recompression of AGE or DCS.

Injury means accidental bodily injury of an Insured Person, that is direct and independent of all other causes, and occurs while Coverage is in force.

Inpatient means an Insured Person who is confined as a registered bed patient in a hospital for whom a room and board charge is made.

Insured Member means a Member who has Coverage under the Group Policy. An Insured Member is referred to in the Certificate as You.

Insured Person means You or Your Eligible Dependent who has Coverage under the Group Policy.

Intensive Care Unit means a separate part of a hospital that is reserved for critically and seriously ill patients who require highly skilled nursing care and constant or close and frequent audiovisual nursing observation. The intensive care unit must provide its patients with:
1. room and board;
2. nursing care by Nurses who work only in the unit; and
3. special equipment and supplies that are primarily for use within the unit.

Medically Necessary or Medical Necessity means services or supplies received while an Insured Person has Coverage that United States Life determines to be:
1 . appropriate and necessary for the symptoms, diagnosis or direct care and treatment of a Covered Diving Accident;
2. provided for the symptoms, diagnosis or direct care and treatment of a Covered Diving Accident; and
3. within standards of good medical practice within the organized medical community; and
4. not primarily for the convenience of the Insured Person, Insured Person’s Physician or another provider; and
5. the most appropriate supply or level of service that can be safely provided.

Nurse means a Registered Nurse (RN), Licensed Practical Nurse (LPN) or Licensed Vocational Nurse (LVN) who is licensed by the State Board of Nursing. If covered nursing services are required outside the jurisdiction of the United States, Nurse means a healthcare practitioner providing nursing services who is licensed or certified to provide such services in the country or district where the services are rendered.

Other Medical Expense Insurance means medical expense insurance provided by any other insurance or welfare plan or prepayment arrangements (including Blue Cross or Blue Shield plans), regardless of whether the other insurance is provided on an individual, family, or group basis, or through an employer, union or membership in an association. If insurance were provided on a provision of service basis, then, for purposes of this definition, the amount shall be that which the services rendered would have cost in the absence of the insurance.

Outpatient Treatment means Medically Necessary services and supplies provided to an Insured Person in a Physician’s office or Outpatient department of a Hospital for which no room and board charge is made.

Physician means a duly licensed medical practitioner who operates within the scope of his or her license and provides services covered under the Group Policy. The term does not include the Insured Person or any person related to the Insured Person by blood, marriage, or adoption.

Reasonable and Customary Charges means charges for medical services and supplies that are not more than the usual charge in the locality where such services or supplies are received. The nature and severity of the condition will be taken into account.

CERTIFICATE SCHEDULE, Continued

BENEFIT
Accidental Death &Dismemberment for scuba
diving injuries only

BENEFIT AMOUNT
Principal Sum $15,000

BENEFIT
Permanent Total Disability for scuba diving injuries
only

BENEFIT AMOUNT
Principal Sum $15,000


BENEFIT
Accident medical coverage for Covered Diving
Accidents for expenses incurred within 365 days of a Covered Diving Accident.


BENEFIT AMOUNT
As described in Benefit A, subject to a $250,000
Lifetime Maximum per occurrence.

BENEFIT
Accident medical coverage for Injuries that are not
diving accidents

BENEFIT AMOUNT
As described in Benefit A subject to a $250 deductible per Insured Person to a maximum of $10,000 per Insured Person

BENEFIT
Lost Diving Equipment

BENEFIT AMOUNT
Up to $2,500 if equipment lost or abandoned due
to a Covered Diving Accident

BENEFIT
Diving Vacation Cancellation

BENEFIT AMOUNT
$250 deductible and $10,000 Lifetime Maximum per Insured Person

BENEFIT
Diving Vacation Interruption

BENEFIT AMOUNT
$250 deductible and $5,000 Lifetime Maximum per Insured Person

CERTIFICATE SCHEDULE

Policyholder: Divers Alert Network Inc. (herein referred to DAN)

Group Policy Number:

Coverage Period: One Year

Waiting Period: None

Classification of Eligible Persons
All dues-paying Members of Divers Alert Network, Inc., herein referred to as DAN, who are residents of an eligible Home Country. For a complete list of eligible Home Countries, contact DAN Member Services at (800) 446-2671. Commercial Divers are not eligible.

CLASSIFICATION OF ELIGIBLE DEPENDENTS

If You have elected DAN family membership, You may cover the following Eligible Dependents:

1. Your Spouse or Cohabitant; and
2. Your unmarried dependent children under age 18 or under age 24 if a full-time student at an accredited school or college who are not employed on a full time basis and have the same permanent home address as the parent. Children include foster children on the date placed in the foster home and adopted children from the date of placement in the adoptive home regardless of whether or not a final decree of adoption has become final. The limiting age shall not terminate coverage of a child who is and continues to be mentally retarded or physically handicapped and who is incapable of selfsustaining employment and chiefly dependent upon You for support and maintenance. You must notify United States Life of such incapacity within 31 days of attainment of the limiting age and as may be subsequently required by United States Life but not more frequently than annually.

You must be covered under the Group Policy to have Dependents Coverage.