Transmittal Header SERT 6D7JF5762/00 00/00 00/00. Transmittal Header

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1 Transmittal Header SERT 6D7JF5762/00 00/00 00/00 Transmittal Header SERT 6D7JF5762/00 00/00 00/00 Created by Ellen Ryan on 06/09/2005 Assigned To: Nelson Whitley, [Receiver] Company List: National Grange Mutual Insuran No value No value Sent: 06/09/ :18:38 AM Other Authors: None TOI: 04.0 Homeowners SubTOI: Homeowners Sub TOI Combinations Filing Information: Filing Action: Initial Filing Date: 06/09/2005 State: North Carolina State Instance PC Identifier: State Domain: None Filing Type: Deviations Type of Insurance: 04.0 Homeowners Sub TOI: Homeowners Sub TOI Combinations Product Name: National Grange Mutual Insurance Company Homeowners Deviation Filing Implementation None Effective Date None Date Requested: Requested: Project Name: Homeowners Deviation Project #: None Filing Fee Required: No Fee Amount: Reference No Reference Org: None Filing: Reference #: None Advisory Org Circular #: None Components sent originally with filing: SERT 6D7JF5762/00 01/00 00/00 SERT 6D7JF5762/00 02/00 00/00 SERT 6D7JF5762/00 03/00 00/00 SERT 6D7JF5762/00 04/00 00/00 SERT 6D7JF5762/00 0 5/00 00/00 Company Contact: Lead Company: National Grange Mutual Insurance Company Filing Company Info National Grange Mutual Insurance Company 4601 Touchton Road East, PO Box 16000, Suite 3400, Jacksonville, FL USA Phone: ext. 351 FAX: CoCode: Group Code: 311 FEIN: State of Domicile: New Hampshire State ID Number: None. Contact Info Nancy Palmisano State Filings Manager National Grange Mutual Insurance Company 4601 Touchton Rd East, Suite 3400, Jacksonville, FL USA Phone: ext 351 FAX: palmisan@msagroup.com Submission Requirements: Status Requirement Satisfied NAIC PC Uniform Transmittal Document Satisfied Deviation Questionnaire FC 038 1

2 Transmittal Header SERT 6D7JF5762/00 00/00 00/00 Satisfied Cover Letter Property and Casualty Tracking Information: Company Tracking None State Tracking #: SPC #: Company Status: None State Status: None Date Company None Date State Status None Status Changed: Changed: SERFF Tracking SERT 6D7JF5762/00 Delivery Date: 06/09/ :18:37 AM #: SERFF Status: Assigned to Reviewer Disposition Date: None Date SERFF 06/09/2005 Implementation Date: None Status Changed: Deemer Date: None Effective Date: None Reviewers: Nelson Whitley, [Receiver] Additional State Tracking Numbers National Grange Mutual Insurance Company SPC State Specific Fields: No State Specific Fields present for this State. Filing This filing will apply to all New Business policies effective on and Description: after October 21, 2005 and to all Renewal policies effective on and after December 10, File Attachments: None 2

3 Component Header SERT 6D7JF5762/00 01/00 00/00 Component Header Component 01 Rev 00 Created by Ellen Ryan on 06/09/2005 Assigned To: Nelson Whitley, [Receiver] Company List: National Grange Mutual Insuran Sent: 06/09/ :18:38 AM Other Authors: None TOI: 04.0 Homeowners SubTOI: Homeowners Sub TOI Combinations Tracking Information: State: North Carolina State Tracking #: SPC SERFF Tracking #: SERT 6D7JF5762/00 01/00 00/00 Component Status None Component Status Assigned to Reviewer (State): (SERFF): Disposition Date: None Delivery Date: 06/09/ :18:38 AM Implementation None Reviewer: Nelson Whitley, [Receiver] Date: Deemer Date: None Reviewer Phone: None Effective Date: None Reviewer Fax: None Requirement Status: None Primary Reviewer: Nelson Whitley Component Information: Component Type: Supporting Component Action: Initial Documentation Lead Form Number: None State Specific Code: None Requirement NAIC PC Uniform Transmittal Document Satisfied: Brief Description: Property and Casualty Transmittal Document Filer's Notes: None Document(s): None Company Contact: Lead Company: National Grange Mutual Insurance Company Company Information National Grange Mutual Insurance Company Contact Palmisano, Nancy File Attachments: Property and Casualty Transmittal Document.pdf 1

4 Effective January 1, 2005 Property & Casualty Transmittal Document (Revised 1/1/05) 1. Reserved for Insurance Dept. Use Only 2. Insurance Department Use only a. Date the filing is received: b. Analyst: c. Disposition: d. Date of disposition of the filing: e. Effective date of filing: f. State Filing #: g. SERFF Filing #: 3. Group Name Group NAIC # Main Street America Group Company Name(s) Domicile NAIC # FEIN # National Grange Mutual Insurance Company NH Company Tracking Number N/A Contact Info of Filer(s) or Corporate Officer(s) [include toll-free number] 6. Name and address Title Telephone #s FAX # National Grange Mutual Insurance Company Nancy J. Palmisano 4601 Touchton Road East Suite 3400 PO Box Jacksonville, FL State Filings Manager ext palmisan@msagroup. com 7. Signature of authorized filer 8. Please print name of authorized filer Nancy J. Palmisano Filing information (see General Instructions for descriptions of these fields) 9. Type of Insurance (TOI) Sub-Type of Insurance (Sub-TOI) State Specific Product code(s)(if applicable)[see State Specific Requirements] N/A 12. Company Program Title (Marketing title) Homeowners 13. Filing Type [ ] Rate/Loss Cost [ ] Rules [ X ] Rates/Rules [ ] Forms [ ] Combination Rates/Rules/Forms [ ] Withdrawal[ ] Other (give description) 14. Effective Date(s) Requested New: October 21, 2005 Renewal: December 10, Reference Filing? [ ] Yes [ X ] No 16. Reference Organization (if applicable) 17. Reference Organization # & Title 18. Company s Date of Filing June 9, Status of filing in domicile [ X ] Not Filed [ ] Pending [ ] Authorized [ ] Disapproved PC TD-1 pg 1 of 2

5 Effective January 1, 2005 Property & Casualty Transmittal Document 20. This filing transmittal is part of Company Tracking # N/A 21. Filing Description [This area should be similar to the body of a cover letter and is free-form text] Re: National Grange Mutual Insurance Company Homeowners- Deviation Filing FEN: National Grange Mutual Insurance Company (NGM) proposes to revise overall rate levels for Homeowners in North Carolina by -1.3%. This change is comprised of changes to our deviation factors. The modifications for this filing will apply to NGM filing number SPC This modification also includes a revision to our Insurance Score Discounts for Insurance Score Groups A through D on Exception Page 21 (10/05) edition. This filing will apply to all New Business policies effective on and after October 21, 2005 and to all Renewal policies effective on and after December 10, Upon your approval of this filing, the deviation will read as follows: HO 00 02, HO and HO Age of Dwelling Discount, see Exception Page 1 (04/05). HO and HO 00 03, Combined Personal Protection Program (CP-3), see Exception Page 2 (04/05^). HO 00 02, HO and HO 00 05, Preferred Homeowners Credit, see Exception Page 3 (04/05^). HO 00 02, HO and HO 00 05, Revitalized Homeowners Credit, see Exception Page 3A (04/05^). Deductible Credits/ Charges, see Exception Page 4 and Page 4 continued (04/05^). HO Base Premium, see Exception Page 5 (11/96). All Forms Protective Device Credits, see Exception Page 6 (05/01). HO 00 02, HO 00 03, HO 00 04, HO and HO Replacement Cost on Contents, see Exception Page 7 (04/05). HO 00 02, HO and HO Specified Additional Amount of Insurance Coverage A- Dwelling, see Exception Page 8 (04/05). HO 00 02, HO and HO Personal Property Replacement Cost, see Exception Page 9 (04/05). HO 00 02, HO and HO Personal Injury, see Exception Page 10 (04/05). HO 00 02, HO and HO Water Back-Up of Sewers or Drains, see Exception Page 11 (04/05). HO 00 02, HO and HO Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money, see Exception Page 12 (04/05). HO and HO Special Computer Coverage, see Exception Page 13 (04/05). HO 00 02, HO and HO Coverage C Increased Special Limits of Liability, see Exception Page 14 (04/05). HO 00 02, HO and HO Fire Department Service Charge, see Exception Page 15 (04/05). HO 00 02, HO and HO Coverage D Increased to 30% of Coverage A, see Exception Page 16 (04/05). Installment Payment Plan, see Exception Page 17 (10/99). HO 00 02, HO and HO Coverage A Relativities for Preferred and Revitalized, see Exception Page 18 (04/05). HO 002, HO and HO Ordinance or Law -Increased Amount of Coverage, See Exception Page 19 (04/05). HO 002, HO and HO Refrigerated Property Coverage, See Exception Page 20 (04/05). Insurance Score Rating Rule, see Exception Page 21 (10/05). Enclosures include a completed deviation questionnaire, a complete set of the company Exception Pages as listed above including, the revised company Exception Page 21 with a (10/05) edition.

6 Effective January 1, Filing Fees (Filer must provide check # and fee amount if applicable) [If a state requires you to show how you calculated your filing fees, place that calculation below] Check #: Amount: No Filing Fee Required Refer to each state s checklist for additional state specific requirements or instructions on calculating fees. ***Refer to the each state s checklist for additional state specific requirements (i.e. # of additional copies required, other state specific forms, etc.) PC TD-1 pg 2 of 2

7 Effective January 1, 2005 RATE/RULE FILING SCHEDULE (This form must be provided ONLY when making a filing that includes rate-related items such as Rate; Rule; Rate & Rule; Reference; Loss Cost; Loss Cost & Rule or Rate, etc.) (Do not refer to the body of the filing for the component/exhibit listing.) 1. This filing transmittal is part of Company Tracking # N/A 2. This filing corresponds to form filing number (Company tracking number of form filing, if applicable) Rate Increase X Rate Decrease Rate Neutral (0%) 3. Overall percentage rate impact for this filing -1.3% 4. Effect of Rate Filing Written premium change for -$62,483 this program 5. Effect of Rate Filing Number of policyholders 10, Filing Method (Prior Approval, File & Use, Flex Band, Prior Approval etc.) 7. Rate Change by Company Company Name Percentage Change for this program # of policyholders for this program Written premium for this program National Grange Mutual Insurance Company -1.3% 10,693 $4,806,364 N/A 8. Overall percentage of last rate revision +1.9% 9. Effective Date of last rate revision 9/1/2004 NB, 10/21/2004 RN 10. Filing Method of Last filing Prior Approval (Prior Approval, File & Use, Flex Band, etc.) Exhibit Name/Description /Synopsis Insurance Score Rating Rule Rule # or Page # Exception Page 21 Replacement or withdrawn? [ X ] Replacement [ ] Withdrawn [ ] Neither [ ] Replacement [ ] Withdrawn [ ] Neither [ ] Replacement [ ] Withdrawn [ ] Neither [ ] Replacement [ ] Withdrawn [ ] Neither [ ] Replacement [ ] Withdrawn [ ] Neither Previous state filing number, if required by state To be complete, a rate/rule filing must include the following: 1. A completed Rate/Rule Filing Transmittal document (PC RRFS-1) (Do not refer to the body of the filing for the component/exhibit listing.) and, 2. A completed Property & Casualty Transmittal Document (PC TD-1) and, 3. One copy of all rate/rule components/exhibits submitted with the filing, and 4. The appropriate state review requirements, if required, and 5. The appropriate filing fees, if required, and 6. A postage-paid, self-addressed envelope large enough to accommodate the return 7. You should refer to the each state s checklist for additional state specific requirements (i.e. # of additional copies required, other state specific forms, etc.) PC RRFS-1 w:\mar03\cmte\ex\wg\isbs\fsumsg\web Docs\PC Transmittal doc

8 Component Header SERT 6D7JF5762/00 02/00 00/00 Component Header Component 02 Rev 00 Created by Ellen Ryan on 06/09/2005 Assigned To: Nelson Whitley, [Receiver] Company List: National Grange Mutual Insuran Sent: 06/09/ :18:38 AM Other Authors: None TOI: 04.0 Homeowners SubTOI: Homeowners Sub TOI Combinations Tracking Information: State: North Carolina State Tracking #: SPC SERFF Tracking #: SERT 6D7JF5762/00 02/00 00/00 Component Status None Component Status Assigned to Reviewer (State): (SERFF): Disposition Date: None Delivery Date: 06/09/ :18:38 AM Implementation None Reviewer: Nelson Whitley, [Receiver] Date: Deemer Date: None Reviewer Phone: None Effective Date: None Reviewer Fax: None Requirement Status: None Primary Reviewer: Nelson Whitley Component Information: Component Type: Supporting Component Action: Initial Documentation Lead Form Number: None State Specific Code: None Requirement Deviation Questionnaire FC 038 Satisfied: Brief Description: Deviation Questionnaire Filer's Notes: None Document(s): None Company Contact: Lead Company: National Grange Mutual Insurance Company Company Information National Grange Mutual Insurance Company Contact Palmisano, Nancy File Attachments: Deviation Questionnaire.pdf 1

9 NORTH CAROLINA DEPARTMENT OF INSURANCE DEVIATION QUESTIONNAIRE A. GENERAL DESCRIPTION (1) NAME OF COMPANY National Grange Mutual Insurance Company (2) FILER'S FEDERAL EMPLOYER # (3) FILER'S FILE # None (4) LINE OF INSURANCE Homeowners (5) SUBLINE/PROGRAM TITLE (IF APPLICABLE) N/A (6) PREVIOUS DEPARTMENT FILE # (IF APPLICABLE) SPC (7) PROPOSED EFFECTIVE DATE AND RULES OF IMPLEMENTATION (Note: no retroactive effective dates will be given) October 21, 2005 for New Business and December 10, 2005 for Renewals. B. IMPACT OF THE AGGREGATE DEVIATION (8) COMPANY'S CURRENT N.C. VOLUME OF BUSINESS FOR THE LINE: WRITTEN PREMIUM: $4,806,364 EXPOSURES: 10,693 (9) COMPANY'S N.C. MARKET SHARE BASED ON WRITTEN PREMIUM: 0.4% (10) COMPANY'S CURRENT COUNTRYWIDE VOLUME OF BUSINESS FOR THE LINE: WRITTEN PREMIUM: $90,033,723 EXPOSURES: 187,854 (11) ESTIMATED NUMBER OF N.C. EXPOSURES AFFECTED BY ONE OR MORE COMPONENTS OF THE AGGREGATE DEVIATION: CURRENT DEVIATION:10,693 PROPOSED DEVIATION: 10,693 (12) PERCENTAGE OF COMPANY'S N.C. EXPOSURES AFFECTED BY ONE OR MORE COMPONENTS OF THE AGGREGATE DEVIATION: CURRENT DEVIATION: 100.0% PROPOSED DEVIATION: 100.0% (13) WHAT IS THE TOTAL DOLLAR AMOUNT OF PREMIUMS THAT WILL NOT BE COLLECTED ON THE PROPOSED DEVIATION ON AN ANNUAL BASIS AS A RESULT OF THIS DEVIATION? $1,157,306 FC-038 (01/01/04) page 1 of 3

10 (14) WHAT IS THE AVERAGE DOLLAR DIFFERENCE PER EXPOSURE FROM MANUAL RATES? $ (15) INDICATE THE MAXIMUM DEVIATION POSSIBLE FOR ANY ONE INSURED. % 36.4% (16) INDICATE WHETHER THE DEVIATION MAY PRODUCE A PREMIUM GREATER THAN MANUAL FOR AN INDIVIDUAL INSURED: CURRENT DEVIATION: YES NO X PROPOSED DEVIATION: YES NO X (17) IF EITHER ANSWER TO (16) IS YES, PROVIDE AN EXPLANATION: N/A C. DEVIATION COMPONENTS (18) PROVIDE A LIST OF ALL THE INDIVIDUAL DEVIATION COMPONENTS. IDENTIFY EACH COMPONENT AS INTRODUCED AS PART OF A NEW DEVIATION ( I ), ADDED TO A CURRENT DEVIATION ( A ), CHANGED ON A CURRENT DEVIATION ( C ), NOT CHANGED ON A CURRENT DEVIATION ( NC ), OR ELIMINATED FROM A CURRENT DEVIATION ( E ). ATTACH A SEPERATE EXCEPTION PAGE FOR EACH COMPONENT EXPLAINING HOW THAT COMPONENT IS TO BE APPLIED. 1) HO and HO Age of Dwelling Discounts (NC) 2) HO 00 02, HO 00 03, HO 00 06, and HO Account Discount (NC) 3) HO 02 and HO Preferred Homeowners Credit (NC) 3A) HO and HO Revitalized Homeowners Discount (NC) 4) HO 00 02, HO 00 03, HO 00 04, HO 00 06, and HO Deductible Credits/Charges (NC) 5) HO Deviation (NC) 6) HO 00 02, HO 00 03, HO 00 04, HO 00 06, and HO Protective Device Credits (NC) 7) HO 00 02, HO 00 03, HO 00 04, and HO Replacement Cost on Contents (NC) 8) HO and HO Specified Additional Amount of Insurance Coverage A - Dwelling (NC) 9) HO and HO Personal Property Replacement Cost (NC) 10) HO and HO Personal Injury Coverage (NC) 11) HO and HO Water Back-UP of Sewers or Drains (NC) 12) HO and HO Credit Card, Fund Transfer Card, Forgery and Counterfeit Money (NC) 13) HO and HO Special Computer Coverage (NC) 14) HO and HO Coverage C Increased Special Limits of Liability (NC) 15) HO and HO Fire Department Service Charge (NC) 16) HO and HO Increased Limits of Coverage D (NC) 17) Installment Payment Plan (NC) 18) HO and HO Coverage A Amount Relativites for Preferred and Reviatalized (NC) 19) HO and HO Ordinance or Law - Increased Amount of Coverage (NC) 20) HO and HO Refrigerated Property Coverage (NC) 21) HO 00 02, HO 00 03, HO Insurance Score Discount (C) FC-038 (01/01/04) Page 2 of 3

11 (19) CREDIT SCORING. COMPLETE THIS QUESTION ONLY IF YOUR DEVIATION INCLUDES CREDIT SCORING. A NOTIFICATION FORM THAT IS IN COMPLIANCE WITH NCGS (C) HAS BEEN PREVIOUSLY APPROVED OR IS ATTACHED. YES FILE #PC D. CERTIFICATION (20) I CERTIFY THAT THE INFORMATION CONTAINED IN THIS QUESTIONNAIRE AND THE ATTACHED EXHIBITS IS TRUE AND CORRECT AND THE FILING COMPLIES WITH STATUTORY REQUIREMENTS TO THE BEST OF MY KNOWLEDGE. SIGNATURE OF COMPANY OFFICER/FILINGS DEPARTMENT HEAD (21) ACTUARIAL CERTIFICATION I, Steve Sauthoff, AM A MEMBER OF THE CASUALTY ACTUARIAL SOCIETY AND AM QUALIFIED TO RENDER AN ACTUARIAL OPINION IN THIS MATTER. I HEREBY CERTIFY THAT EACH DEVIATION COMPONENT(S) PRESENTED IN THIS FILING IS CALCULATED IN ACCORDANCE WITH SOUND ACTUARIAL PRINCIPLES AND RESULTS IN RATES WHICH ARE NOT EXCESSIVE, INADEQUATE OR UNFAIRLY DISCRIMINATORY. SIGNATURE OF ACTUARY FC-038 (01/01/04) page 3 of 3

12 Component Header SERT 6D7JF5762/00 03/00 00/00 Component Header Component 03 Rev 00 Created by Ellen Ryan on 06/09/2005 Assigned To: Nelson Whitley, [Receiver] Company List: National Grange Mutual Insuran Sent: 06/09/ :18:38 AM Other Authors: None TOI: 04.0 Homeowners SubTOI: Homeowners Sub TOI Combinations Tracking Information: State: North Carolina State Tracking #: SPC SERFF Tracking #: SERT 6D7JF5762/00 03/00 00/00 Component Status None Component Status Assigned to Reviewer (State): (SERFF): Disposition Date: None Delivery Date: 06/09/ :18:39 AM Implementation None Reviewer: Nelson Whitley, [Receiver] Date: Deemer Date: None Reviewer Phone: None Effective Date: None Reviewer Fax: None Requirement Status: None Primary Reviewer: Nelson Whitley Component Information: Component Type: Supporting Component Action: Initial Documentation Lead Form Number: None State Specific Code: None Requirement Cover Letter Property and Casualty Satisfied: Brief Description: Cover Letter Filer's Notes: None Document(s): None Company Contact: Lead Company: National Grange Mutual Insurance Company Company Information National Grange Mutual Insurance Company Contact Palmisano, Nancy File Attachments: Cover Letter.pdf 1

13 June 9, 2005 Insurance Department State of North Carolina Property & Casualty Division 430 North Salisbury St. Dobbs Building P.O. Box Raleigh, NC Re: National Grange Mutual Insurance Company Homeowners- Deviation Filing FEN: National Grange Mutual Insurance Company (NGM) proposes to revise overall rate levels for Homeowners in North Carolina by -1.3%. This change is comprised of changes to our deviation factors. The modifications for this filing will apply to NGM filing number SPC This modification also includes a revision to our Insurance Score Discounts for Insurance Score Groups A through D on Exception Page 21 (10/05) edition. This filing will apply to all New Business policies effective on and after October 21, 2005 and to all Renewal policies effective on and after December 10, Upon your approval of this filing, the deviation will read as follows: HO 00 02, HO and HO Age of Dwelling Discount, see Exception Page 1 (04/05). HO and HO 00 03, Combined Personal Protection Program (CP-3), see Exception Page 2 (04/05^). HO 00 02, HO and HO 00 05, Preferred Homeowners Credit, see Exception Page 3 (04/05^). HO 00 02, HO and HO 00 05, Revitalized Homeowners Credit, see Exception Page 3A (04/05^). Deductible Credits/ Charges, see Exception Page 4 and Page 4 continued (04/05^). HO Base Premium, see Exception Page 5 (11/96). All Forms Protective Device Credits, see Exception Page 6 (05/01). HO 00 02, HO 00 03, HO 00 04, HO and HO Replacement Cost on Contents, see Exception Page 7 (04/05). HO 00 02, HO and HO Specified Additional Amount of Insurance Coverage A- Dwelling, see Exception Page 8 (04/05). HO 00 02, HO and HO Personal Property Replacement Cost, see Exception Page 9 (04/05). HO 00 02, HO and HO Personal Injury, see Exception Page 10 (04/05). HO 00 02, HO and HO Water Back-Up of Sewers or Drains, see Exception Page 11 (04/05). HO 00 02, HO and HO Credit Card, Fund Transfer Card, Forgery, and Counterfeit Money, see Exception Page 12 (04/05). HO and HO Special Computer Coverage, see Exception Page 13 (04/05). HO 00 02, HO and HO Coverage C Increased Special Limits of Liability, see Exception Page 14 (04/05).

14 National Grange Mutual Insurance Company Homeowners Filing June 9, 2005 Page 2 HO 00 02, HO and HO Fire Department Service Charge, see Exception Page 15 (04/05). HO 00 02, HO and HO Coverage D Increased to 30% of Coverage A, see Exception Page 16 (04/05). Installment Payment Plan, see Exception Page 17 (10/99). HO 00 02, HO and HO Coverage A Relativities for Preferred and Revitalized, see Exception Page 18 (04/05). HO 002, HO and HO Ordinance or Law -Increased Amount of Coverage, See Exception Page 19 (04/05). HO 002, HO and HO Refrigerated Property Coverage, See Exception Page 20 (04/05). Insurance Score Rating Rule, see Exception Page 21 (10/05). Enclosures include a completed deviation questionnaire, a complete set of the company Exception Pages as listed above including, the revised company Exception Page 21 with a (10/05) edition. If you have any questions, please feel free to contact me at , ext My fax number is and my address is palmisan@msagroup.com. Sincerely, Nancy J. Palmisano, State Filings Manager Actuarial Department By, Ellen Ryan State Filing Specialist Cc: North Carolina Rate Bureau P.O. Box Raleigh, NC

15 Component Header SERT 6D7JF5762/00 04/00 00/00 Component Header Component 04 Rev 00 Created by Ellen Ryan on 06/09/2005 Assigned To: Nelson Whitley, [Receiver] Company List: National Grange Mutual Insuran Sent: 06/09/ :18:38 AM Other Authors: None TOI: 04.0 Homeowners SubTOI: Homeowners Sub TOI Combinations Tracking Information: State: North Carolina State Tracking #: SPC SERFF Tracking #: SERT 6D7JF5762/00 04/00 00/00 Component Status None Component Status Assigned to Reviewer (State): (SERFF): Disposition Date: None Delivery Date: 06/09/ :18:39 AM Implementation None Reviewer: Nelson Whitley, [Receiver] Date: Deemer Date: None Reviewer Phone: None Effective Date: None Reviewer Fax: None Requirement Status: None Primary Reviewer: Nelson Whitley Component Information: Component Type: Supporting Component Action: Initial Documentation Lead Form Number: None State Specific Code: None Requirement N/A Satisfied: Brief Description: Actuarial Explanatory and Exhibits Filer's Notes: None Document(s): None Company Contact: Lead Company: National Grange Mutual Insurance Company Company Information National Grange Mutual Insurance Company Contact Palmisano, Nancy File Attachments: Actuarial Explanatory and Exhibits.pdf 1

16 NORTH CAROLINA HOMEOWNERS FILING EXPLANATORY With this filing, National Grange Mutual Insurance Company (NGM) proposes to revise overall rate levels for Homeowners in North Carolina by -1.3%. This change is comprised of changes to deviation factors. The rate change will vary by policy. This memorandum and accompanying exhibits describe the underlying data and ratemaking methodologies used to develop our Homeowners indication of +2.9%. EXHIBIT I OVERALL CHANGE BY FORM This exhibit shows the proposed changes by form. The overall change is comprised of a revision to the Insurance Score rating rule factors, as outlined in the Deviations section, which results in a -1.3% impact.

17 Exhibit I NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING SUMMARY OF PROPOSED REVISIONS INSURANCE Form DIST SCORE HO-2 0.1% -1.3% HO % -1.3% HO-5 0.0% -1.3% HO-8 0.0% -1.3% OWNERS 97.7% -1.3% HO-4 1.7% 0.0% HO-6 0.7% 0.0% All Forms 100.0% -1.3%

18 NORTH CAROLINA HOMEOWNERS FILING INDICATIONS SECTION This section details the calculation of NGM s indicated rate change. Exhibit II details the calculation of the overall indicated change. The remaining exhibits in this section (III-V) show the actual NGM experience used in the development of the indications shown on Exhibit II. EXHIBIT II RATE LEVEL INDICATIONS This exhibit develops the overall indicated rate level change of +2.9% for Owners Forms (HO-2 & HO-3). Adjusted experience is shown for the years Adjusted Earned Premium Direct earned premiums for each year have been adjusted to current rate levels, and subsequently adjusted for premium trend to equal the Adjusted Earned Premium. Adjusted Non-Cat Losses Accident year losses are valued as of 12/31/2004, include ALAE, exclude catastrophes losses and are capped at $75,000. The resulting Non-Catastrophe Incurred Loss and ALAE is adjusted to include ULAE, loss development and adjusted for loss trend to equal the Total Adjusted Incurred Non-Cat Loss and LAE. A provision for large losses has been included via a Large Loss load (see Exhibit III). The Total Adjusted Incurred Non-Cat Loss and LAE ratio is divided by the Adjusted Earned Premium to equal the Total Adjusted Incurred Non-Cat Losses and LAE ratio. Selected Experience Year Non-Cat Loss Ratio The Total Adjusted Incurred Non-Cat Loss and LAE for each year are used to calculate the Selected Experience Year Non-Cat Loss Ratio. Rate Level Indication The Selected Experience Year Non-Cat Loss Ratio is further adjusted to include a provision for catastrophes via a catastrophe load to equal the Experience Year Loss Ratio with Cat Load. The indicated rate need is the estimated rate increase needed to cover expected loss, loss adjustment expense, underwriting expenses, and provide a provision for profit and contingencies.

19 NORTH CAROLINA HOMEOWNERS FILING INDICATIONS SECTION EXHIBIT III LARGE LOSS LOAD This exhibit displays the development of the Large Loss load. Large Losses, which are defined as that portion of non-catastrophe losses in excess of $75,000, have a large effect on profitability. To compensate for the volatility in our actual experience, large losses have been excluded from our historical experience for Owners forms and re-introduced via a Large Loss load. The exclusion of actual incurred large losses and their reintroduction via a large loss load provides more stability in the selection of an Experience Year Non-Cat Loss Ratio in Exhibit II. EXHIBIT IV ULAE PROVISION This exhibit details the calculation of Unallocated Adjustment Expense (ULAE) factors used in Exhibit II. Countrywide data is used. EXHIBIT V UNDERWRIITING EXPENSE This exhibit develops our actual underwriting expense for the latest three years. This data allows for the calculation of the fixed and variable expense ratios used in Exhibit II. General and Other Acquisition expenses are allocated to North Carolina using earned premium, and 75% of these expenses are considered fixed. Commission and Brokerage and Taxes, Licenses and Fees are allocated using written premium, and 100% of the expenses are considered variable. In addition, a Reinsurance Cost provision of 2.5% is used to account for the cost of Reinsurance; 100% of this expense is considered fixed. General and Other Acquisition expense are based on the Insurance Expense Exhibits. Taxes, Licenses and Fees have been based upon North Carolina specific premium tax obtained from ISO. Commission expense has been based on revised commission levels.

20 Exhibit II NORTH CAROLINA HOMEOWNERS FILING INDICATED RATE LEVEL ADJUSTMENT OWNER FORM Year-To-Date Accident Experience Ending Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Total (1) Direct Earned Premium 3,062,843 3,360,315 3,641,219 4,318,200 4,690,998 19,073,575 (2) Premium On-Level Factor (3) Premium Trend Factor (4) Adjusted Earned Premium 4,441,171 4,627,913 4,602,063 4,950,566 5,170,809 23,792,522 (1)*(2)*(3) (5) Non-Catastrophe Incurred Loss & ALAE 2,008,583 1,659,701 1,742,268 1,649,425 1,543,213 8,603,191 (6) Unallocated LAE Factor (7) Loss Development Factor (8) Large Loss Factor (9) Loss Trend Factor (10) Total Adjusted Incurred Loss & LAE 3,387,374 2,709,180 2,798,717 2,607,185 2,492,448 13,994,905 (5)*(6)*(7)*(8)*(9) (11) Total Adjusted Incurred Loss & LAE Ratio 76.3% 58.5% 60.8% 52.7% 48.2% 58.8% (10)/(4) (12) Selected Experience Year Non-Cat Loss Ratio 48.0% (13) Cat Load as % of Premium 12.7% (14) Experience Loss Ratio with Cat Load 60.7% (15) Fixed Expense 12.3% (16) 100% - Variable Expense 71.0% (17) Indicated Rate Level Adjustment for 2.9% Proposed Effective Date: 10/21/05 [((14)+(15))/(16)]-1

21 Exhibit III NORTH CAROLINA HOMEOWNERS FILING LARGE LOSS FACTOR Non-Cat Non-Cat Incurred Incurred Large Losses & ALAE Losses & ALAE Loss Year Excess of $75K Capped at $75K Ratio 1991 $0 $0 0.0% 1992 $0 $0 0.0% 1993 $0 $0 0.0% 1994 $0 $0 0.0% 1995 $0 $0 0.0% 1996 $10,189 $236, % 1997 $298,549 $683, % 1998 $396,330 $1,206, % 1999 $347,228 $1,607, % 2000 $209,987 $2,008, % 2001 $427,850 $1,659, % 2002 $142,865 $1,742, % 2003 $312,659 $1,649, % 2004 $976,011 $1,543, % 3,121,669 12,336, % 5 Year Straight Average: 25.3% 10 Year Straight Average: 22.9% Latest 10 Year Weighted Average: 25.3% All Year Weighted Average: 25.3% Selected Large Loss Factor = 24.0%

22 Exhibit IV COUNTRYWIDE HOMEOWNERS FILING UNALLOCATED LOSS ADJUSTMENT EXPENSE FACTOR CALCULATION Direct Incurred Losses Direct Incurred Direct Incurred Calendar Loss Adjustment Expenses ALAE Year (000'S omitted) (000'S omitted) (000'S omitted) Ratio ,496,000 5,703, , ,798,000 5,751, , ,531,000 8,749, , Total 138,825,000 20,203,000 2,616, Selected Ratio of Net Paid ULAE to Net Paid Loss + ALAE 12.4%

23 Exhibit V NORTH CAROLINA HOMEOWNERS FILING DEVELOPMENT OF EXPECTED LOSS RATIO ALL PROGRAMS/ALL TERRITORIES 1. Actual Expenses (Countrywide, homeowners direct business written) Results 2003 Results 2002 Results 2001 Results Category Dollars Ratio Dollars Ratio Dollars Ratio Dollars Ratio (1) (2) (3) (4) (5) (6) (7) (8) (9) Direct Written Premiums $221, $82, $74, $65, Direct Earned Premiums $209, , , , Comm. & Brokerage (W) $49, % 18, % 16, % 15, % Other Acquisition Exp. (E) $13, % 4, % 5, % 3, % General Expenses (E) $13, % 5, % 3, % 4, % Taxes, Licenses & Fees (W) $6, % 2, % 2, % 1, % Total $513, % $188, % $170, % $154, % 2. Budgeted Expense Provisions Proposed - All Programs Category % Fixed Variable (1) (2) (3) (4) (a) Comm. & Brokerage 15.80% 0.00% 15.80% (b) Other Acquisition Exp. 6.50% 4.88% 1.63% (c) General Expenses 6.60% 4.95% 1.65% (d) Taxes, Licenses & Fees 2.57% 0.00% 2.57% (e) Reinsurance Cost Load 2.50% 2.50% 0.00% (f) Profit & Contingencies 5.00% 0.00% 5.00% (g) Contingent Comm. 2.40% 0.00% 2.40% (h) Total 41.37% 12.33% 29.05% (i) Expected Loss Ratio: 58.63% [1.0-(h)] Notes: (4),(6) Historic Insurance Expense Exhibits (IEE). (13e) Exhibit 9.

24 NORTH CAROLINA HOMEOWNERS FILING ADJUSTMENT FACTORS SECTION This section shows the calculation of the factors needed to adjust NGM s actual earned premiums and incurred losses to the level expected to prevail during the period the revised rates are in effect. The factors developed on these Exhibits (VI IX) are used in the calculation of the indicated rate change shown on Exhibit II. EXHIBIT VI ON-LEVEL PREMIUM FACTORS This exhibit displays the adjustments made to the earned premiums to bring past premiums amounts to current rate levels. Premiums are adjusted to current rate levels using the traditional parallelogram approach. EXHIBIT VII PREMIUM TREND Over time, the effect of inflation is to increase the amount of insurance insureds buy. As a result, the average premium collected per exposure tends to increase, exclusive of any rate increase. This exhibit develops the premium trend factors used to adjust the earned premium at present rates for changes in premium caused by inflation, deductible shifts, etc. NGM has used an annual premium trend of +3.0% for Owners forms. EXHIBIT VIII LOSS DEVELOPMENT FACTORS The loss development factors used to adjust the accident year losses in Exhibit II to ultimate settlement cost are derived in this exhibit. EXHIBIT IX PURE PREMIUM TREND This exhibit summarizes the loss trends used in the calculations. NGM has used annual loss trends of +3.0% for Owners forms.

25 Exhibit VI NORTH CAROLINA HOMEOWNERS ON-LEVEL PREMIUM FACTORS OWNERS FORMS HISTORICAL RATE CHANGES: RATE MONTH DAY YEAR CHANGE % % % % % % ON-LEVEL PREMIUM FACTORS: YEAR* ON-LEVEL FACTOR** * Rolling 4 Quarters ending 4th quarter of indicated year ** Weighted average of on-level factors for annual and semi-anual policies. Annual Policy Weight: 100.0% Semi-annual Policy Weight: 0.0%

26 Exhibit VII NORTH CAROLINA HOMEOWNERS FILING PREMIUM TREND ANALYSIS Annual Rate of Change* FORM Selected OWNERS 3.0% Owner Period Projection Trend Endinig Factor Factor 12/31/ /31/ /31/ /31/ /31/

27 Exhibit VIII NORTH CAROLINA HOMEOWNERS FILING INCURRED LOSS AND PAID ALAE TRIANGLE 12/2004 Months Period ,100 1,100 1,100 1,100 1, , , , , , , , , , , ,855,810 2,103,898 2,139,196 2,116,203 2,118, ,539,755 2,775,367 2,780,795 2,731,498 2,731, ,662,066 2,657,229 2,624,568 2,625,068 2,627, ,744,183 1,995,226 2,016,186 2,117, ,349,160 2,359,523 2,463, ,839,611 2,962, ,145,597 Period Ex Hi/Lo Yr. Avg Yr. Avg Yr. Avg Total Avg Yr. Weighted Selected Age-Ult

28 Exhibit IX NORTH CAROLINA HOMEOWNERS FILING LOSS TREND ANALYSIS Annual Rate of Change FORM Selected OWNERS 3.0% Owner Projection Trend Period Factor Factor 12/31/ /31/ /31/ /31/ /31/

29 NORTH CAROLINA HOMEOWNERS FILING DEVIATIONS SECTION This section shows the calculation of the premium level effect of proposed deviation changes. NGM is proposing the following changes: Revised Insurance Score rating rule factors This revision has been accounted for in the calculation of the overall increase shown on Exhibit I. EXHIBIT X INSURANCE SCORE DISCOUNT FACTORS We are proposing to revise the Insurance Score factors for groups A-D. The revised factors are shown on page 1 of this exhibit. Page 2 of this exhibit shows the ChoicePoint Attract North Carolina Model loss ratio relativities by insurance score range that supports our proposed thresholds.

30 Exhibit X Page 1 of 2 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING INSURANCE SCORE DISCOUNTS RANGE CHOICEPOINT CURRENT PROPOSED % SCORE LOW HIGH DIST. DIST. FACTOR FACTOR CHANGE A % 19.9% % B % 6.5% % C % 6.9% % D % 8.8% % E % 9.1% % F % 9.7% % G % 9.8% % H % 9.2% % I % 9.2% % J % 11.0% % K No Hit % 0.0% % L No Score % 0.0% % SUB-TOTAL 24.8% -1.4% UNSCORED 75.2% -1.3% TOTAL 100.0% 100.1% -1.3%

31 Exhibit X Page 2 of 2 NORTH CAROLINA HOMEOWNERS FILING ChoicePoint Attract Score - Standard Homeowners Group Score Range Rel. Loss Ratio Relative Loss Ratio - Average = Group Score Range Selected Relativity

32 NORTH CAROLINA HOMEOWNERS FILING NCRB CHANGES This section shows the calculation of the premium level effect of proposed NCRB changes. The NCRB has proposed the following changes: Revised Base rates This revision has been accounted for in the calculation of the indicated rate level change. EXHIBIT XI REVSIED BASE RATES The NCRB revised base rates for policies effective on or after August 1, The overall impact of this change for NGM, which is shown on page 1 of this exhibit, is estimated to be +1.0%. The calculation of the overall impact of this change by form is shown on pages 2-7 of this exhibit.

33 Exhibit XI Page 1 of 7 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING SUMMARY OF NCRB CHANGES NCRB Form DIST CHANGE HO-2 0.1% 4.7% HO % 1.2% HO-5 0.0% 0.0% HO-8 0.0% 0.0% OWNERS 97.7% 1.2% HO-4 1.7% -6.9% HO-6 0.7% -7.5% All Forms 100.0% 1.0%

34 Exhibit XI Page 2 of 7 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING NORTH CAROLINA RATE BUREAU FORM HO-2 $75,000 $75,000 NCRB NCRB NCRB % TERRITORY DIST CURRENT PROPOSED CHANGE % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % SUBTOTAL 100.0% 4.7%

35 Exhibit XI Page 3 of 7 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING NORTH CAROLINA RATE BUREAU FORM HO-3 $75,000 $75,000 NCRB NCRB NCRB % TERRITORY DIST CURRENT PROPOSED CHANGE % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % SUBTOTAL 100.0% 1.2%

36 Exhibit XI Page 4 of 7 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING NORTH CAROLINA RATE BUREAU FORM HO-5 $75,000 $75,000 NCRB NCRB NCRB % TERRITORY DIST CURRENT PROPOSED CHANGE 05 N/A % 06 N/A % 32 N/A % 34 N/A % 36 N/A % 38 N/A % 39 N/A % 41 N/A % 42 N/A % 43 N/A % 44 N/A % 45 N/A % 46 N/A % 47 N/A % 53 N/A % 57 N/A % 60 N/A % SUBTOTAL 0.0% 0.0%

37 Exhibit XI Page 5 of 7 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING NORTH CAROLINA RATE BUREAU FORM HO-8 $75,000 $75,000 NCRB NCRB NCRB % TERRITORY DIST CURRENT PROPOSED CHANGE 05 N/A % 06 N/A % 32 N/A % 34 N/A % 36 N/A % 38 N/A % 39 N/A % 41 N/A % 42 N/A % 43 N/A % 44 N/A % 45 N/A % 46 N/A % 47 N/A % 53 N/A % 57 N/A % 60 N/A % SUBTOTAL 0.0% 0.0%

38 Exhibit XI Page 6 of 7 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING NORTH CAROLINA RATE BUREAU FORM HO-4 NCRB NCRB NCRB % TERRITORY DIST CURRENT PROPOSED CHANGE % $106 $ % % $106 $ % % $52 $47-9.6% % $63 $69 9.5% % $44 $40-9.1% % $47 $43-8.5% % $43 $39-9.3% % $54 $55 1.9% % $72 $74 2.8% % $72 $74 2.8% % $48 $45-6.3% % $54 $49-9.3% % $52 $48-7.7% % $53 $48-9.4% % $49 $ % % $45 $41-8.9% % $37 $37 0.0% SUBTOTAL 100.0% -6.9%

39 Exhibit XI Page 7 of 7 NATIONAL GRANGE MUTUTAL INSURANCE COMPANY NORTH CAROLINA HOMEOWNERS FILING NORTH CAROLINA RATE BUREAU FORM HO-6 NCRB NCRB NCRB % TERRITORY DIST CURRENT PROPOSED CHANGE % $98 $ % % $98 $ % % $49 $ % % $56 $ % % $42 $38-9.5% % $39 $ % % $42 $38-9.5% % $46 $ % % $69 $67-2.9% % $69 $67-2.9% % $43 $39-9.3% % $43 $39-9.3% % $45 $41-8.9% % $42 $38-9.5% % $44 $40-9.1% % $35 $32-8.6% % $32 $29-9.4% SUBTOTAL 100.0% -7.5%

40 Component Header SERT 6D7JF5762/00 05/00 00/00 Component Header Component 05 Rev 00 Created by Ellen Ryan on 06/09/2005 Assigned To: Nelson Whitley, [Receiver] Company List: National Grange Mutual Insuran Sent: 06/09/ :18:38 AM Other Authors: None TOI: 04.0 Homeowners SubTOI: Homeowners Sub TOI Combinations Tracking Information: State: North Carolina State Tracking #: SPC SERFF Tracking #: SERT 6D7JF5762/00 05/00 00/00 Component Status None Component Status Assigned to Reviewer (State): (SERFF): Disposition Date: None Delivery Date: 06/09/ :18:40 AM Implementation None Reviewer: Nelson Whitley, [Receiver] Date: Deemer Date: None Reviewer Phone: None Effective Date: None Reviewer Fax: None Requirement Status: None Primary Reviewer: Nelson Whitley Component Information: Component Type: Rule Component Action: Initial Lead Form Number: None State Specific Code: None Rate/Manual Page #: Exception Pages 1 through 21 Requirement Satisfied: N/A Brief Description: Filer's Notes: Document(s): Exception Pages Enclosed please find a complete set of the company Exception Pages including the revised company Exception Page 21 with a (10/05) edition. None Company Contact: Lead Company: National Grange Mutual Insurance Company Company Information National Grange Mutual Insurance Company Contact Palmisano, Nancy File Attachments: Exception Pages.pdf 1

41 EXCEPTION PAGE 1 HOMEOWNERS AGE OF DWELLING DISCOUNT (HO 00 02, HO AND HO 00 05) Age of Dwelling (in years) Deviation Discount 0 0.0% 18% 1 0.0% 15% 2 0.0% 12% 3 0.0% 9% 4 0.0% 6% 5 0.0% 3% 6 0.0% 0% 7 0.0% 0% % 0% 04/05

42 EXCEPTION PAGE 2 HOMEOWNERS COMBINED PERSONAL PROTECTION PROGRAM (CP-3) Homeowners policies will qualify for a 6% discount under NGM's Combined Personal Protection Program (CP3) provided that both a voluntary automobile policy insuring a private passenger type vehicle and a homeowners policy insuring the primary residence is written through NGM. Eligible policy forms include HO 00 02, HO 00 03, H , HO and HO 00 08; policy form HO is not eligible. The following factor will be applied to the Homeowners total as the last rating step: Factor /05^

43 EXCEPTION PAGE 3 HOMEOWNERS PREFERRED HOMEOWNERS CREDIT Homeowners policies that meet certain underwriting criteria will be eligible for the following discounts off of the Rate Bureau rates: Protection Construction Construction Territory Class Type Deviation Type Deviation 05,06, 34, 1-8 Frame -13.0% Masonry -13.0% 41, 42, 43 9, 9E, 9S Frame -6.0% Masonry -6.3% 32 36, 57 38, 39 44, 60 45, 46, Frame Frame Frame Frame Frame Frame -16.5% -20.5% -19.0% -21.0% -18.2% -17.0% Masonry Masonry Masonry Masonry Masonry Masonry -16.5% -20.5% -19.0% -21.0% -18.2% -17.0% 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S Frame Frame Frame Frame Frame Frame -9.8% -14.1% -12.5% -14.7% -11.7% -10.4% Masonry Masonry Masonry Masonry Masonry Masonry -10.1% -14.4% -12.8% -14.9% -11.9% -10.6% Risks that are acceptable under NGM's Standard Program AND meet the criteria shown below will be rated with a Preferred Discount (as shown above). All qualifying criteria must be met - absence of any one will disqualify risk for Preferred Discount. - Forms HO 00 02, 03 and 05 only - One and two family occupancy - Dwelling not more than 35 years old (once insured with Preferred Discount, a dwelling will not subsequently become ineligible on the basis of age alone). - Mandatory application of insurance-to-value trend factor % insurance-to-value. - Home appraisal form required. - No loss in preceding 36 months - New Business. - Not more than one loss in preceding 36 months - Renewals. - Minimum Coverage A: New $75,000 Renewal $60,000 - Dwelling cannot be used as a seasonal residence. - Risk must be a primary dwelling - New Business. - Protection Class 10 ineligible. 04/05^

44 EXCEPTION PAGE 3A HOMEOWNERS REVITALIZED HOMEOWNERS CREDIT A dwelling over 35 years old which meets all other NGM Homeowners acceptability standards and which meets the following underwriting criteria shall be eligible for the following discount off of the Rate Bureau rates: Protection Construction Construction Territory Class Type Deviation Type Deviation 05,06, 34, 1-8 Frame -8.0% Masonry -8.0% 41, 42, 43 9, 9E, 9S Frame -0.6% Masonry -0.9% 32 36, 57 38, 39 44, 60 45, 46, Frame Frame Frame Frame Frame Frame -9.0% -9.8% -8.6% -11.2% -8.1% -9.0% Masonry Masonry Masonry Masonry Masonry Masonry -9.0% -9.8% -8.6% -11.2% -8.1% -9.0% 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S 9, 9E, 9S Frame Frame Frame Frame Frame Frame -1.7% -2.6% -1.3% -4.1% -0.7% -1.7% Masonry Masonry Masonry Masonry Masonry Masonry -2.0% -2.9% -1.6% -4.4% -1.0% -2.0% All qualifying criteria must be met - Absence of any one will disqualify the risk from the Preferred Discount. - Forms HO 00 02, 03 and 05 only - One and two family occupancy - cannot be used as a seasonal residence. - Risk must be a primary dwelling - New Business. - Mandatory application of insurance-to-value trend factor % insurance to replacement cost. - Home appraisal form required. - No loss in preceding 36 months - New Business. - Not more than one loss in preceding 36 months - Renewals. - Minimum Coverage A of $75, Located within 5 miles of Responding Fire Department, accessible year-round and visible by a neighbor. - Protection Class 10 ineligible. - Smoke detectors (2 units) installed and properly maintained. - Outbuildings structurally sound and well maintained. - Electrical and Plumbing Systems - Upgraded within past 35 years. Minimum 100-amp service required. No knob and tube wiring. - All chimneys in active use must be properly lined and maintained. - Heating/Cooling Systems and Roof upgraded within past 25 years. - Heating/Cooling Systems must be regularly serviced. ACORD application and form , Revitalized Home Certificate must accompany all new submissions. Form is required on renewals. All forms must be signed by insured and agent. Photos of the dwelling and all outbuildings are required on all submissions (New and Renewal). 04/05^

45 EXCEPTION PAGE 4 HOMEOWNERS DEDUCTIBLE CREDITS/CHARGES All Section I Perils Except Earthquake - All Forms Credit/ Deductible Charge $ % $250 Theft +9% HO 00 02, 03, 05 and 08 +5% HO and 06 The minimum additional charge of $30 for the $100 deductible and for the $250 Theft deductible does not apply. ALL Forms Except HO And HO All Coverage A Limit Perils Ded. Up to $60,000 to $100,000 to $200,001 Amount $59,999 $99,999 $200,000 and Over $ $1, $2, $5, HO HO All Coverage C Limit All Coverage C Limit Perils Ded. Up to $25,001 Perils Ded. Up to $40,001 Amount $25,000 and Over Amount $40,000 and Over $ $ $1, $1, $2, $2, Theft Deductible Factors - Forms HO and HO HO All Other Coverage C Amount Theft Perils Up to $25,001 Territory Deductible Deductible $25,000 and Over City $1,000 $ $2,500 $ $2,500 $1, Other than City $1,000 $ $2,500 $ $2,500 $1, HO All Other Coverage C Amount Theft Perils Up to $40,001 Deductible Deductible $40,000 and Over $1,000 $ $2,500 $ $1, /05^

46 EXCEPTION PAGE 4 Continued HOMEOWNERS DEDUCTIBLE CREDITS/CHARGES Windstorm or Hail Deductible Factors - All Forms Except HO and HO Percentage Deductibles All Other 1% Deductible Perils Ded. Up to $60,000 to $100,000 to $200,001 Amount $59,999 $99,999 $200,000 and Over $ $1, $2, $5, All Other 2% Deductible Perils Ded. Up to $60,000 to $100,000 to $200,001 Amount $59,999 $99,999 $200,000 and Over $ $1, $2, $5, All Other 5% Deductible Perils Ded. Up to $60,000 to $100,000 to $200,001 Amount $59,999 $99,999 $200,000 and Over $ $1, $2, $5, Higher Fixed Dollar Deductibles All Other $1,000 Deductible Perils Ded. Up to $60,000 to $100,000 to $200,001 Amount $59,999 $99,999 $200,000 and Over $ $1, $2, $5, All Other $2,000 Deductible Perils Ded. Up to $60,000 to $100,000 to $200,001 Amount $59,999 $99,999 $200,000 and Over $ $1, $2, $5, All Other $5,000 Deductible Perils Ded. Up to $60,000 to $100,000 to $200,001 Amount $59,999 $99,999 $200,000 and Over $ $1, $2, $5, Photos of the dwelling and all outbuildings are required on all submissions (New and Renewal). 04/05^