Investor Relations and Guaranty Capital

Guaranty Capital is an investment instrument that allows Medical Mutual to raise funds to support its operations. Guaranty Capital is authorized by North Carolina law and has been issued by Medical Mutual since its inception. The Investor Relations Department is responsible for the administration of Medical Mutual's Guaranty Capital program.

Physicians who reside in North Carolina and are insured by Medical Mutual have been required to own a minimum of $2,000 in Guaranty Capital. The maximum investment allowed was $5,000 per physician.

At Medical Mutual’s Annual Meeting on April 19, 2008, its policyholders overwhelmingly approved the cessation of the Guaranty Capital ownership requirement for new policyholders and the redemption of all current Guaranty Capital investments. Therefore -

• Effective April 19, 2008, Medical Mutual no longer requires or accepts new investments in its Guaranty Capital.
• We will continue the current practice of redeeming existing Guaranty Capital investments whenever a physician ceases to be a policyholder of the company.
• We intend to make an annual, pro-rata redemption of existing Guaranty Capital investments over the next four (4) years. The first redemptions were made to Guaranty Capital investors of record as of June 30, 2008. This redemption was for twenty-five percent (25%) of the outstanding investment, and was paid on about July 8, 2008. Additional annual, pro-rata redemptions are planned for 2009, 2010 and 2011.
• The annual redemptions will not be applied against the investor’s professional liability premium. They will be paid directly to the investor of record.
• Interest payments on outstanding Guaranty Capital investments will continue to be considered annually and declared by the Board of Directors as appropriate.

For more information regarding Investor Relations and the Guaranty Capital program, contact Colleen Larsen, Investor Relations Coordinator, at (919) 878-7563 or (800) 662-7917 x7563 or colleen.larsen@mmicnc.com.

For additional Investor Relations and Guaranty Capital information, please review our FAQ's