SIPC, FDIC and Additional Account Protection

SUMMARY OF SIPC ACCOUNT PROTECTION

Pershing and Ziegler are members of the Securities Investor Protection Corporation (SIPC®). As a result, investor-owned assets held in custody by Pershing are protected by SIPC, up to $500,000 in value, including $100,000 in cash awaiting reinvestment. SIPC provides protection for eligible client assets held in custody by a SIPC member brokerage firm should the SIPC member firm fail financially and become unable to meet the obligations to its clients. SIPC does not protect assets that are not held in custody by a SIPC member. SIPC does not protect against losses due to market fluctuation or for client assets not held by a SIPC member. For more information about investor asset protection, visit SIPC’s Web site atwww.sipc.org. In addition to SIPC protection, Pershing also provides coverage in excess of SIPC limits through Lloyds of London.

LLOYD'S OF LONDON — PROVIDING EXCESS ACCOUNT PROTECTION

The excess insurance policy purchased through Lloyd’s of London provides the following excess account protection for assets held in custody with Pershing and its London-based affiliate, Pershing Securities
Limited:

• An aggregate loss limit of $1 billion for eligible securities — over all client accounts
• A per client loss of $1.9 million for cash awaiting reinvestment — within the aggregate loss limit of $1 billion

This excess account protection offers the highest level of coverage available in the industry today. Excess account protection claims would only arise where Pershing failed financially and eligible client assets or covered accounts, as defined by SIPC and Lloyd’s of London, cannot be located due to theft, misplacement, destruction, burglary, robbery, embezzlement, abstraction, failure to obtain or maintain possession or control of Ziegler clients’ securities or to maintain the special reserve bank account required by applicable rules (SEC 15c-3).

For more information about Lloyd’s of London, please visit their Web site at www.lloyds.com.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) INSURANCE

The Federal Deposit Insurance Corporation (FDIC®) is an independent agency of the U.S. government that provides protection for insured deposits at a failed FDIC-insured bank. FDIC-insured investments are insured by the FDIC up to applicable limits, generally $250,000. In the case of Pershing’s FDIC-Insured Deposits Program and the Certificate of Deposit Account Registry Service® (CDARS®), investors can access FDIC insurance for deposits in multiple FDIC insured institutions with a single investmetnt.^1,2 Pershing also offers investors access to Brokered CDs and FDIC-insured bonds.²

Brokered CDs are certificates of deposit of a commercial bank or savings and loan association that are sold through an intermediary instead of the savings and loan institution itself. Brokered CDs are covered by FDIC insurance up to applicable limits and are available in both the new issue and secondary markets in maturities as short as one month to as long as 10 or more years.

FDIC-insured bonds were created by the FDIC’s new Temporary Liquidity Guarantee Program. The program guarantees newly issued senior unsecured debt of eligible institutions — issued on or after October 14, 2008, and before June 30, 2009. It also provides full deposit insurance coverage for non-interest-bearing deposit transaction accounts in FDIC-insured institutions, regardless of the dollar amount.

For additional information about the financial strength of Pershing and the protection of investors’ assets held in custody, visit the safety and soundness section on www.pershing.com. For more information about the FDIC, visit www.fdic.gov.

INVESTOR PROTECTION FOR YOUR INSURANCE PRODUCTS³

How are policyholders protected, in the event that the insurer fails? Most states have guaranty funds to help pay the claims of financially impaired insurance companies. State laws specify the lines of insurance covered by these funds and the dollar limits payable. Coverage is usually for individual policyholders and their beneficiaries and not for values held in unallocated group contracts. Most states also restrict insurance agents and companies from advertising the funds’ availability.

WHAT HAPPENS IF AN INSURANCE COMPANY GOES INSOLVENT?
The failure of an insurance company is administered differently than other business bankruptcies. This is because insurance is regulated by the states and failures are not governed by federal bankruptcy law.

When an insurance company becomes insolvent and is unable to pay outstanding claims, a state’s courts and the insurance commissioner begin a legal process to determine appropriate action for the company.

There are several approaches a commissioner might take with a troubled company. He or she might opt for conservation, a judicial proceeding that gives the commissioner direct control over the assets of an insurer. Another step a commissioner might take prior to liquidation is placing the company into rehabilitation. Under rehabilitation the commissioner takes title to insurers’ assets, and closely supervises the company with the view toward rehabilitating it.

The “last resort” option is liquidation. During liquidation the commissioner or a representative becomes the receiver of the company’s “estate.” The receiver marshals the company’s assets, determines liabilities and begins distributing assets to the estate’s creditors. Current policies are cancelled, and policyholders are notified and directed to seek coverage elsewhere.

ENTER THE GUARANTY FUNDS
Liquidation does not halt the obligation to pay outstanding claims against the company. Instead, it triggers involvement of the guaranty funds in all states where the insolvent insurer is licensed to transact its insurance business. The guaranty funds step into the shoes of the insolvent company to pay the covered claims of each state’s residents. The funds pay claims to policy amounts or limits set by state law.
In this way, guaranty funds ensure covered claimants and policy beneficiaries are among the first to be paid. Guaranty funds free claimants from having to wait several years for what likely would be only a fraction of the claim amount they would receive were it not for the funds.

COVERED WITHIN STATUTORY LIMITS
State statute determines coverage limits of the guaranty fund system. This means the guaranty funds pay claims at the policy amount or within statutory limits, whichever is lower: that is, “caps,” fixed by the state.

Limits vary from state to state. Typically the claim limit is $300,000 except for workers compensation claims that are paid in full. A small minority of states have limits that are above or below the $300,000 threshold.

These caps, which were established in the early days of guaranty funds, reflect the original intent of the system: to protect individuals and small businesses – those potentially hardest hit by insolvencies. Caps enable the guaranty fund system to ensure sufficient funds, or “capacity,” needed to serve all claimants.

FUNDED BY ASSESSMENTSGuaranty funds have a claim against the insolvent estate for their claim payments, and can often get access to such funds that are available on an accelerated basis. However, estate assets, which are almost always not readily available when the guaranty fund mechanism is first activated, often are not sufficient to pay guaranty fund obligations in full. For this reason, guaranty associations are empowered by state law to obtain needed funds through mandatory assessments on the insurance industry. These assessments raise funds to pay claims and administrative and other estate-related costs.

1Investments in the FDIC-Insured Deposits Program are not considered securities and are therefore not protected by SIPC or excess account protection coverage.

2CDARS is a service provided by Promontory Interfinancial Network, LLC. Pershing, Promontory, and The Bank of New York Mellon are affiliated through common ownership. The Bank of New York Mellon Corporation is the ultimate parent company of Pershing and the Bank of New York Mellon. The Bank of New York Mellon Corporation holds a minority interest in Promontory.

3The Life and Health Insurance Guaranty Association System Publication, The Answers You Need.

B.C. Ziegler and Company is a registered broker-dealer and not a bank and does not offer bank accounts. Some products offered through Ziegler may be FDIC-insured. Consult your Ziegler financial advisor for more information regarding the securities held in your Ziegler account.