Mississippi Windstorm Underwriting Association Understanding the Rules and

Mississippi Windstorm Underwriting Association Understanding the Rules and Processes 2016

BOARD OF DIRECTORS 3 agents with at least 10 years experience ◦ 2 must be residents of the Coast ◦ 1 must not be a resident of the Coast 5 assessable insurers ◦ Insurers that are authorized to write and engaged in writing property insurance within Mississippi on a direct basis. 2 Coast business leaders The State Treasurer 11 Board Members

MWUA’s Mission “Assure an adequate market for wind and hail insurance in the coast area of Mississippi. ” Protect policyholders state-wide from unreasonable Windpool surcharges. Avoid damaging the state-wide market for property insurance. Encourage better building standards and land use in the coast area in order to mitigate wind losses and depopulate the Windpool. While accomplishing these goals, try to avoid high rates thus helping the Coast economy revive.

Changes- Post Katrina The Last 10 Years HB 1500 Signed into law changing MWUA. ◦ ◦ Stabilized the statewide property insurance marketplace Limited Assessments to Admitted Carriers. Provided alternative funding mechanisms. Allows for retaining equity to buffer statewide policyholders from surcharges ADMINISTRATIVE/OPERATIONAL CHANGES * Geographic rating tiers – 5 rating zones * Flood requirement for A and V zones * Optional Deductibles – (5%, 10%, 15% & 20%) * Fully Earned Premium Rule – Prevent Short Term Purchase

(CHANGES CONTINUED) * Updated and modernized coverage forms * Enhanced exposure data gathering to improve modeling data – Update Inspections – Insurance to Value UW * No Servicing Carrier – Plans System/Plans staff administer * Commercial Deductible Changes – Explain why the change? * Discontinue MWUA Mitigation Program/ Now IBHS Applies • Amended Mandatory Evacuation Coverage • New Requirement for Manufactured/Mobile Homes • Change coming soon – Renewal Information Applications

MWUA growth since 2005 AUGUST ‘ 05 TODAY 16, 155 polices $1. 8 billion insured 33, 348 policies $5. 18 billion insured

MWUA In Force Trend 7, 600, 000 Limits in Force 7, 243, 346, 028 -2. 86% 7, 036, 481, 829 -0. 61% 7, 100, 000 6, 993, 441, 138 -3. 48% 6, 749, 818, 401 6, 600, 000 -11. 86% 6, 100, 000 5, 948, 975, 435 5, 600, 000 -12. 85% 5, 184, 455, 038 5, 100, 000 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Aug 2016

MWUA POLICIES In Force Trend 50, 000 48, 000 46, 000 Policies in Force 46, 406 44, 172 43, 682 44, 000 42, 810 42, 000 40, 000 38, 377 38, 000 36, 000 34, 000 33, 348 Aug 2016 32, 000 30, 000 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15

MWUA In Force Monthly Trend -1. 457% 3, 000, 000 2, 500, 000 42582 -1. 041% 2, 000, 000 42613 1, 500, 000 1, 000, 000 -2. 785% -1. 717% 500, 000 -25. 0. % 1. 120% -0. 725% tio ca ti. Lo ul t. M ke an Bl Total In Force July = 5, 264, 386, 176 Total In Force Aug = 5, 184, 455, 038 -1. 518% n e on St ar l. R ive r on Pe ck s Ja so n rri Ha oc k nc Ha Ge or ge 0

8 , 47 216 56, 70, 000 8 , 42 209 2 892 122 , 75, , 78 509 76, 649 , 93 3 5 77, , 24 558 79, 0 5 , 42 112 79, , 98 023 79, 64, 68, 80, 000 77, 855 , 666 90, 000 885 , 98 0 Written Premium 60, 000 Written Premium 355 , 00 9 50, 000 , 88 282 20, 000 13, 30, 000 1 29, 40, 000 10, 000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 42583

90, 000 Written Premium 33 82 75 , 12 2, 8 92 9, 7 , 50 76 77 , 64 80, 000 9, 9 79 , 55 8, 2 45 85, 000 75, 000 64 , 20 9, 4 28 70, 000 65, 000 Written Premium 56 , 21 6, 4 78 60, 000 55, 000 50, 000 2011 2012 2013 2014 2015 42583

8, 000 LIMITS PURCHASED / SIR / TIV(LIMITS IN FORCE) 7, 225 7, 182 6, 874 6, 836 7, 000 6, 891 6, 712 6, 412 6, 000 5, 869 5, 709 5, 370 5, 184 5, 000 Million s 4, 000 3, 000 2, 000 1, 873 1, 000 338. 8 0 175. 0 21. 3 10. 0 2005 2006 470. 0 100. 0 2007 447. 5 72. 5 539. 0 61. 0 2008 MWUA Retention 2009 697. 5 52. 5 2010 763. 5 51. 5 2011 Limits Purchased 743. 5 56. 5 2012 763. 1 62. 0 2013 885. 0 70. 0 2014 947. 0 53. 0 2015 919. 5 52. 0 2016

HOW DO WE GET CARRIERS BACK IN THE COAST MARKET? IMPROVE RISK AND REDUCE LOSSES • WHAT IS WIND MITIGATION ? • HOW DOES MWUA PROMOTE WIND MITIGATION ? • BCEGS • RETROFIT • NEW CONSTRUCTION • Fortification - Insurance Institute for Business and Home Safety (IBHS) 13

WHAT BCEGS DOES BCEGS assigns each Jurisdiction a BCEGS grade ranging from 1 – 10 This is a community building code enforcement rating not a specific dwelling wind mitigation rating. The lower the number the better the enforcement

WHO GRADES THESE COMMUNITIES? The Mississippi State Rating Bureau administers both the BCEGS and the Public Fire Protection Classification Schedule These classifications are published and available to all companies and agents

WHAT IS A COMMUNITY’S GRADE BASED ON? 1. Administration of codes, including International Residential Building Code version Modification of the codes Zoning provisions to mitigate hazards Training of code enforcers (Inspectors) Incentive for outside training / certification Building official’s qualifications Contractor/Builder licensing & bonding Public awareness programs Participation in code development & appeal process

2. Review of Building Plans by Officials Staffing levels Qualifications Level of detail of plan review Performance evaluations Review of plans for single family, multifamily and commercial buildings

3. Field inspections, including Staffing Levels Qualifications Level of detail inspections Performance evaluations Final inspections Issuance of certificates of occupancy

Requirement for a Valid Certificate of Occupancy for BCEGS Credit * Need a copy of the original C/O issued for the dwelling when built new. • C/O should contain Building Permit Number and Address of Dwelling • Name and Address of the Owner at time of inspection. • Describe what type of work – new, addition, renovation, use, etc. • The name of the inspector, and the building official issuing • The International Residential Building Code version required for permit • The date inspected/approved any special stipulations/conditions. • Note - Building Officials should retain C/Os when issued indefinitely

DWELLING BCEGS CREDITS

BCEGS EXAMPLE A house in Biloxi Built after 2000 BCEGS score = 4 Score of 4 in Harrison = 17% credit Rate reduced by 17% Multiply base rate by. 83 before applying other factors.

WHAT IS NEEDED TO RECEIVE CREDIT? A valid Certificate of Occupancy (CO) from the Building Code Jurisdiction related to the covered location address at the original time of construction. The entire home must be constructed to the code enforced the date the CO is issued Certificate of Completions will not qualify, a C/O for repairs, remodeling, renovation, or an addition will not qualify for BCEGS Credit

Retrofit Wind Mitigation and Wind Resistant Construction Credits MWUA Retrofit Wind Mitigation Credits are available – Expired MWUA program and IBHS current day program. Note if a grandfathered MWUA certified location leaves the plan and comes back later, it will need to be certified by IBHS since the MWUA Mitigation Inspection Program is closed. IBHS Evaluators issue all Fortified for Safer Living, Bronze, Silver, and Gold certifications when approved by their licensed evaluators – with certifications MWUA can approve the 5% site credits based on the MWUA inspection (in some cases based on photos provided). Site specific BCEGS 1, Semi WR, and Wind Resistive certifications are reviewed and approved by MWUA Management based on Engineer stamped inspections provided to MWUA for review.

MS PLANS WEBSITE - MWUA KEY TABS FOR AGENCY INFORMATION: • Wind Mitigation Programs – Lists Programs and Credits Available • Manual of Rules and Procedures – Rules and Rating Information • MWUA Bulletins – Lists History of Bulletins Announcing Changes • Current News – Information on Upcoming Changes and Events • MWUA Forms – Links to Current Policy Forms and Applications • Hurricane Preparedness – Useful Links and Info – Claim Service Points for Each Event, etc.

INSURANCE INSTITUTE FOR BUSINESS AND HOME SAFETY (IBHS) Alex Cary – Manager , Fortified Coastal Programs Alex provides direct support to communities along the Gulf Coast and strengthening partnerships with organizations such as Habitat for Humanity, St. Bernard Project, and Sea Grant. She previously served as the Executive Director of Smart Home America and construction manager for Habitat for Humanity of Baldwin County, AL. She is a licensed home builder in Alabama. She serves on the Board of Smart Home America, is Treasurer of the Board of Directors for the Baldwin Home Builder’s Association, and serves on the AL Center for Insurance Information and Research Advisory Board appointed by Governor Robert Bentley.

BREAK TIME – 10 MINUTES

The Claims Process MWUA Claim Manager – Mike Mc. Gehee ◦ In 2007, MWUA contracted with Boulder Claims as its third party administrator Boulder has handled in excess of 12, 000 claims on behalf of MWUA and MRPIUA ◦ Responsible for managing and supervising the entire claims process, development and communication of the MWUA catastrophe plan ◦ Maintain a supervisory and managerial role throughout the claims handling process ◦ Has dedicated staff to service all claims, non-catastrophic and catastrophic

The Claims Process ◦ ◦ ◦ (con’t) Contract with Independent Adjusters to provide claims adjustment services to inspect and adjust a particular claim Uses POD (Point of Delivery) concept for rapid expansion of claim examiner staffing. Developed a panel of expert partners to provide key services Engineers Roofing consultants Contractors

The Claims Process (con’t) Independent Adjuster Panel • Boulder has agreements with eight national independent adjusting firms to provide in excess of 1, 000 adjusters and examiners • • Small Event (0 -1000 claims): Will handle with staff and 1 -3 firms Medium Event (1000 -2, 500 claims): POD engagement and 3 -8 firms Moderate Event (2, 500 -8, 000 claims): PODs (2 -4) and all 8 firms Major Event (8, 000 – up): All PODs and all firms activated POD examiner approach • • • Addresses the challenge of limited examiner resources and physical space shortage Expand bandwith of examiner and supervisor resources All PODs are supervised by Boulder Claims staff

Reporting A Claim • • • Sure. Power Website - Agents may use the Agent Portal to submit a Loss Notice. https: //mwua. iscs. com/innovation • Policyholders may report claims via the Service Portal at : https: //service-mwua. iscs. com Phone - Call center is staffed 24 hours a day, seven days a week. Claims can be reported by calling 1 -866 -634 -4465 Boulder Claims Website - Access to the claim reporting tool. http: //www. boulderclaims. com Email - claimsfax@boulderclaims. com or msfaxfnol@boulderclaims. com Fax - New claims may be faxed to 1 -877 -786 -7275

MWUA Application/ITV Review Application Important Points Effective Date – Not Bound until complete, paid, approved MW Emergency Contact – Often skipped but important for claims Fire Ins. Provider & Limit – wind limit no less than fire limit Flood Information – Required if in any A or V zone Valuation Intent – Replacement Cost or Actual Cash Value

Application/ITV Continued Agency – Servicing agent is not MW agent, resident license req. Binding provisions – Agent cannot guarantee binding eff. date Cancellations – Fully Earned Premium Rule – 4 exceptions, Prop Sold, Total Loss, Placed Voluntary, & UW cancel for condition Notices – Acknowledgement (Named Storm Deductible, Flood Coverage Requirement, Fully Earned Premium, Loss Settlement Provisions, Valuation intent ACV or RC). Important applicant understands.

Insurance to Value Replacement Cost: The cost to repair or replace with like kind and quality without deductions for depreciation. Replace new less deductible. Actual Cash Value: Replacement Cost less depreciation deductions for age, usage, and/or condition. (Note – Real Estate Market Value does not apply to MW valuation. Most uniform property appraisals provide all 3 valuations (Real Estate Market, Replacement Cost, and Depreciated value).

Loss Settlement Provisions Important Points: Personal Property/Contents and Structures that are not buildings are actual cash value depreciated value only. Other structures can be scheduled or considered part of the 10% of limit extension. Scheduled buildings are valued by claims adjuster at the time of loss and if not within 80% of full replacement cost are subject to replacement cost coinsurance or actual cash value depreciated penalties. Application intent does not impact loss settlement provisions. Important for insured to understand this. Same for scheduled outbuildings.

Inspection Process/ITV New Business Applications: Application ITV Screening – economy, standard, custom Follow up inspection – handling variances app to inspection ITV variance process – new application versus inspection result Renewal Updates: General variance process – construction, zone, etc. ITV variance process – different from new app variance approach – insured can defer to next renewal for correction

SUREPOWER POLICY SYSTEM Rhonda Dunn - Underwriting Manager Activity Tab - View, print, or email policies, endorsements, etc. History Tab - How to view the policy period you want to see Billing Screen - How to read premium paid, due, and who pays Rating Worksheet – How to see premium rating information Risk Tab – How to see the UW information for each location Claim Tab – How to see updated claim information/status

Questions and Answers? What are your questions regarding MWUA process and procedures? What can MWUA do to improve operations? Closing remarks – Brad Little Thanks for attending this training session!!!