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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;&lt;b&gt;Note 1. Accounting Policies&lt;/b&gt;
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;The accompanying interim consolidated financial statements are unaudited and reflect all
   adjustments which, in the opinion of management, are necessary to fairly present the results of
   The Navigators Group, Inc. and its subsidiaries for the interim periods presented on the basis of
   United States generally accepted accounting principles (&amp;#8220;GAAP&amp;#8221; or &amp;#8220;U.S. GAAP&amp;#8221;). All such
   adjustments are of a normal recurring nature. All significant intercompany transactions and
   balances have been eliminated. The preparation of these financial statements requires management
   to make estimates and assumptions that affect the reported amounts of assets and liabilities and
   disclosures of contingent assets and liabilities at the date of the financial statements and the
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   interim period are not necessarily indicative of results for the full year. The terms &amp;#8220;we&amp;#8221;, &amp;#8220;us&amp;#8221;,
   &amp;#8220;our&amp;#8221; and &amp;#8220;the Company&amp;#8221; as used herein are used to mean The Navigators Group, Inc. and its
   subsidiaries, unless the context otherwise requires. The term &amp;#8220;Parent&amp;#8221; or &amp;#8220;Parent Company&amp;#8221; are
   used to mean The Navigators Group, Inc. without its subsidiaries. These financial statements
   should be read in conjunction with the consolidated financial statements and notes contained in
   the Company&amp;#8217;s 2009 Annual Report on Form 10-K. Certain amounts for the prior year have been
   reclassified to conform to the current year&amp;#8217;s presentation. Commission income, previously
   disclosed as a separate line item in the Consolidated Statements of Income, is now included in
   Other income (expense).
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      <ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef
 -Publisher AICPA
 -Name Accounting Principles Board Opinion (APB)
 -Number 22
 -Paragraph 8

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