AON EXECUTIVE SUMMARY Once again, we have evaluated the property insurance marketplace to obtain a competitive market driven program for the Metropoli

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AON EXECUTIVE SUMMARY Once again, we have evaluated the property insurance marketplace to obtain a competitive market driven program for the Metropolitan Utilities District.

28 AON EXECUTIVE SUMMARY Once again, we have evaluated the property insurance marketplace to obtain a competitive market driven program for the Metropolitan Utilities District. Aon's Utility and Energy Group handles over $2 Billion in utility company property and casualty insurance premium across the country, and we have utilized the widespread network of our substantial marketing resources. Affiliated FM has demonstrated it's high regard for MUD by lowering or maintaining the property rate that MUD pays per $100 of insured value. MUD's rate decreased 54% from 2002 to As the property market firmed beginning in 2009 the renewal rate offered by Affiliated remained below the marketplace increases due to both MUD's favorable loss history and the longer term relationship with Affiliated and 2012 saw slight increases to the rate, but below the broader marketplace over the same time. Year Rate Rate Change % % % % % % % % % Prior to 2003, MUD's property insurance policies provided no flood coverage. In 2003, Aon negotiated with AFM to add flood coverage in Non-flood zones at no additional premium. Flood coverage was expanded in 2008 to include some of the Zone A locations, again at no additional premium. In 2009 AFM's original quote sought to exclude Zone A coverage for the wellfields, however after further negotiation they agreed to provide the coverage and purchased reinsurance at a cost of over 1 0% of MUD's premium solely to cover that flood exposure. The Flood coverage was amended to provide for just Zone B and better following 2010 due to the pricing. The significant catastrophe losses born by the insurance and reinsurance market over the past 5 years have shown up in the pricing of broader perils in the property market. The broad Property Market is seeing rate increases of around 5% for good risks with favorable loss histories to 1 0% or more for accounts showing loss trends or histories. The AFM quote remains basically flat with a 1.6% increase. The rate is still the most competitive as evidenced by other carriers inability to compete with it. And the rate is still half of the rate in place in The overall premium is up roughly 8% as the insured values have increased roughly 6.5%. The last several years, while we have sought quotes from the broad marketplace, none of the carriers have been willing to quote in large part to their perception that they cannot beat Affiliated

29 AON or that MUD is not interested in moving carriers. In other words they have provided quotes in the past that did not result in any movement. Had this not been the history, quotes would have at least been offered whether or not they would have been competitive. There is capacity of other insurers and if MUD was unhappy with Affliliated FM there would be alternative markets willing to write MUD's property coverage. Lastly, MUD indicated a desire to move all the policies they currently purchase to a common expiration date to facilitate economy of efforts by staff in handling the insurance. We have asked both carriers to provide options to move the expiration dates to June 1 (the date MUD has chosen). Additionally, given the favorable nature of these renewal offers and the continued volatility in the Property marketplace, we have indicated the most desirable method would be to write these renewals for a 19 month term to expire June 1, If they are agreeable it will result in a roughly 58.3% increase in the premiums to cover the extended time, but will lock in the favorable rates for 19 months rather than 12 months. The alternative of writing them for 7 months would mean we would be negotiating rates again in April/May of 2014 being subjected to possible increases. We look forward to discussing with you the contents of this report. The Metropolitan Utilities District has long been, and continues to be, one of our most valued and important accounts. We are proud to be on your team.

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30 Metropolitan Utilities Distict Renewal Comparison 11/1 /13-14 Platte River West Treatment: Omaha NE C:\Users\e \AppDa\a\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\JDIFYRZP\13-14 renewal comparison

31 Metropolitan Utilities Distict Renewal Comparison 11/1/13-14 Valuation Replacement Cost- PD; Actual Loss Sustained - TE Replacement Cost - PD; Actual Loss Sustained - TE This insurance document is furnished to you as a matter of information for your convenience. It only summarizes the listed proposed policy(ies) and is not intended to reflect all the terms and conditions of such proposed policy(ies). Moreover, the information contained in this document reflects proposed coverage as of the effective date(s) of the proposed policy(ies) and does not include subsequent changes. This document is not an insurance policy and does not amend, alter or extend the coverage afforded by the listed proposed policy(ies). The insurance afforded by the listed to the terms. exclusions and conditions of such ~ ~ ;~..,; ~ "' C:\Users\e \AppData\Locai\Microsoft\Windows\Temporary Internet Files\Content. Outlook\JDIFYRZP\13-14 renewal comparison 9/26/20132

32 Metropolitan Utilites District Premium Summary I Revenue Disclosure to Rate: Payment Terms: Annual Annual Terrorism: Included in above premiums: Property- $7,950 Equipment Breakdown - $0 Included in above premiums: Property - $5,000 Equipment Breakdown - $0 Options: Property Term 11/1/2013-6/1/2015 $568,681 (includes Terrorism $7,905 and Eng Fee $23,715) Equipment Breakdown Term 11/1/2013-6/1/2015 $53,161 C:\Users\E \AppData\Locai\Microsoft\Windows\Temporary Internet Files\Content.Outlook\6R4FJWV8\Premium Summary Revenue Disclosure.xls

33 Metropolitan Utilities District Premium/Exposure/Rate Comparison 11/1/13-11/1/14 Total Insurable Values Premium Rate Terrorism Premium includ Rate includ En Total Variance in values from ex Variance in cost from expiring term $1 639 $ $986 $2,665 Note: Premiums do not include any applicable taxes/fees N:\CLIENT\M-FILES\MUD\2013\Marketing\Proposal Docs\Premium & Cov Comparison.xls.xlsxPremium Comparison 9/23/2013

$AON Metropolitan Utilities Dist. Quote Disclosure Report..... " t ~.""',..-.-..,,, 'lotal Cost.to ( arnrr :'lialwnal,.......,. Carrier..., Quoted. \I~S.. Jntcrmcdiar\', if lnlcrmellian.' 1 ota 1.$

34 AON Metropolitan Utilities Dist. Quote Disclosure Report..... " t ~.""', ,,, 'lotal Cost.to ( arnrr :'lialwnal, ,. Carrier..., Quoted. \I~S.. Jntcrmcdiar\', if lnlcrmellian.' 1 ota 1.\ 1 ~ S. ( 'I' 1eu1 I null' IJ) l'rogram l.mt Of Busml ss < :11T1cr 1, Dedmahon l'n m um ( '.. \llllllwual c... \I~S J e t ~. 1 <1 (I'. espouse J' OmllllSSIOII 1. J :IJIJIIC:l J e OmmiSSIOII..,,... l ' llll'oml' " ' re111111m + 'CC 1,, ason Commission l~alc.' \. '-i '.;..,;- w,. "'... ~ ':. ''-~~,- -~ _,..,.~~... '- '. ~.~..-,""}of''",.. ~... "',. 11'1...!to'... ~~.. ~~ 1 Policy Term: November 01, 2013 to November 01, Affiliated FM Travelers Chubb Swiss Re Axis CNA Travelers Chubb Swiss Re Axis CNA AIG - Lexington AIG - Lexington Commercial Property Affil' t tate d FM 1 nsurance C o. C overage Commercial Property Coverage Travelers Commercial Property Coverage Chubb Commercial Property Coverage Swiss Re Commerc ial Property Coverage Axis Commercial Property Coverage CNA Commercial Property Coverage AIG - Lexington Quoted N/A $344, % N/A N/A N/A N/A $51, $344, No Quote No Response No Response No Quote No Quote No Quote Uncom_Qetitive N/A N/A Capacity Uncompetitive Uncompetitive N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A NIA N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Presentation Date: 8/26/2013 Currency: USD D isclosures l. Aon Risk Services is an insurance producer licensed in your state. Insurance producers are authorized by their license to confer with insurance purchasers about the benefits, terms and conditions of insurance contracts; to offer advice concerning the substantive benefits of particular insurance contracts; to sell insurance; and to obtain insurance for purchasers. The role ofthe producer in any particular transaction involves one or more of these activities. Compensation will be paid to the producer, based on the insurance contract the producer sells. Depending on the insurer(s) and insurance contract(s) the purchaser selects, compensation will be paid by the insurer(s) selling the insurance contract or by another third party. Such compensation may vary depending on a number of factors, including the insurance contract(s) and the insurer(s) the purchaser selects. In placing, renewing, consulting on or servicing your insurance coverages, Aon Risk Services and its affiliates (\"Aon\") may participate in contingent commission arrangements with insurance companies that provide for additional contingent compensation, if, for example, certain underwriting, profitability, volume or retention goals are achieved. Such goals are typically based on the total amount of certain insurance coverages placed by A on with the insurance company or the overall performance of the policies placed with that insurance company, not on an individual policy basis. As a result, Aon may be considered to have an incentive to place your insurance coverages with a particular insurance company. The insurance purchaser may obtain information about compensation expected to be received by the producer based in whole ot in part on the sale of insurance to the purchaser, and (if applicable) compensation expected to be received based in whole or in part on any alternative quotes presented to the purchaser by the producer, by contacting your Account Executive or ing Aon Box. Where Aon participates in contingent commission arrangements with insurance companies, Aon may be entitled to additional commission in the range of O to 6% depending upon whether and when specified thresholds are achieved.

2. ARS receives premiums Clients pay for remittance to carriers, as well as refunds insurance companies pay for remittance to Clients, and deposits these payments into fiduciary accounts in

35 2. ARS receives premiums Clients pay for remittance to carriers, as well as refunds insurance companies pay for remittance to Clients, and deposits these payments into fiduciary accounts in accordance with applicable insurance laws until they are due to be remitted. ARS wi ll retain the interest or investment income earned while such funds are on deposit pursuant to those laws and carrier agreements. 3. Notwithstanding whether any commission amounts are shown in the Quoted ARS Commission column, ARS has national additional commission rates with some carriers for certain lines of business and/or for outsourced administrative services performed on the carrier's behalf. Where there is a National Additional Commission Rate shown, ARS expects to earn this commission rate on the premium amount quoted herein. Collecting this commission will not change in any way the Premi um quoted above. 4. When a carrier does not pay ARS an amount sufficient to cover the brokerage and administrative services performed byars on the carrier's behalf for the benefit of our clients, ARS may charge such fees to the client as ARS deems necessary and where permitted by applicable law. 5. Total ARS Income equals the sum of the commission ARS will receive from the Carrier, including quoted and national additional commissions (as applicable), and the ARS fee, if any. Commission is calcula ted by multiplying the Premium amount by applicable commission rates. 6. The Total Cost to Client is Premium (inclusive of all ARS commission) plus ARS Fee (if applicable). Total Cost to Client does not include applicable surplus lines taxes and fees and it does not include applicable state fees, surcharges, or taxes assessed on the policy. 7. ARS performs various administrative functions related to the procurement of coverage, including, but not limited to, electronic policy fi li ng and storage, expiration tracking, client data management, and administration. Where legally permitted to do so, ARS-US charges for its own account and collects from its clients, a $300 policy administrative charge per policy placed. In some countries where legally permitted to do so, ARS charges for its own account and collects administrative fees from its clients. Administrative fees are in addition to and not in lieu of any other service fees agreed to and paid to us by our clients and/or any commissions paid to us by insurers, and these administrative fees appear separately on the invoices we issue.

Information Paper Business Administration Committee Annual Operational Insurance Policy Renewals. October 2014

M E T R O P O L I T A N W A S H I N G T O N A I R P O R T S A U T H O R I T Y Information Paper Business Administration Committee Annual Operational Insurance Policy Renewals October 2014 M E T R O P O