Course Number: C00787 CE Hours: 3 GEN

Transcription

1 NCJUA/NCIUA Producer Certification Seminar Course Number: C00787 CE Hours: 3 GEN Provided by: IIANC 101 Weston Oaks Ct. Cary, NC PO Box 1165 Cary, NC (800) Fax (919)

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3 North Carolina Joint Underwriting Association NCJUA I. General Information A. Purpose of NCJUA 1. Adequate market for basic property insurance 2. Encourage improvement of property 3. Equitable distribution among property insurers 4. Market of last resort B. Authority of Agents and Brokers & Role of the Producer 1. No Agents (see N.C.G.S (b) Producer not agent of the Association 2. Producer represents insured (Broker) 3. Producer must be licensed agent for Member Company 4. No authority to produce policies or adjust claims (limited adjustment authority during catastrophic losses) 5. Commissions established by Board approved by Commissioner 6. Expirations owned by Producer C. Eligible Persons D. Ineligible Persons 1. Natural or legal persons with an insurable interest in tangible property located in North Carolina 2. Corporate owned property, application signed by a documented corporate officer 3. Association, joint venture, or fictitious entities, application signed by principal 4. Mortgagees/Loss Payees, application must be signed by owner or authorized person(s) 5. Estates, application by personal representative (executor or administrator) 6. Parties with insurable interest by contract, tenants required by lease to restore property 1. Indicted or convicted of arson 2. Indicted or convicted of defrauding an insurance company

4 E. Eligible Property 1. Located in North Carolina other than Beach Plan area 2. Real property or tangible personal property 3. Meet underwriting standards F. Ineligible Property 1. Motor vehicles 2. Beach Area properties (ARE eligible in Beach Plan) II. Underwriting Standards 1. General Standards a. Physical condition 1) Construction 2) Heating 3) Wiring 4) Previous un-repaired damage 5) General deterioration 6) Building codes non-compliance does not cause automatic rejection b. Use of premises 1) Housekeeping 2) Extended vacancy or unoccupancy in excess of 60 days 3) Overcrowding 4) Improper storage of rubbish or flammable materials 5) Property under active rehabilitation is not vacant c. Unacceptable conditions violation of law or public policy & result in substantially increased exposure to loss 1) Characteristic of Ownership 2) Condition 3) Occupancy or maintenance d. Two or more fires, each amounting to at least $500 in a 12 month period or three or more fires in a 24 month period 2

5 e. Other standards approved by the Commissioner of Insurance 1) Two or more conditions a) Delinquent real estate taxes 1 year or more b) No heat or electricity beyond 30 days within the control of insured c) Failure to correct conditions dangerous to life, health or safety within a reasonable time 2) Outstanding order to vacate 3) Ordered demolition 4) Declared unsafe 5) Owner or occupant convicted or under indictment for incendiarism. 6) 65% or more rental units unoccupied 7) Unrepaired fire damage reasonable period 8) Indication of intent to abandon 9) Removal of salvageable material 10) Reliable information that building will be intentionally burned. 11) Indictment or conviction of insurance fraud f. Conditional risks 1) Declined, notify of required improvements 2) Accepted, surcharged (removed upon resolvement of substandard condition) 2. Named Storm Restrictions refer to website, Underwriting Page a. The Box 1) Restrictions effective day after b. Named Storm in the Box (Longitudes Degrees West and Latitudes Degrees North) c. No new business 1) No increased business d. Applies to the entire State 3. Farm Property- Refer to MRP, Authority of Agents and Brokers a. Definition of farm and exceptions b. ISO CLM Rules with NC exceptions c. Use and income minimum requirements 3

6 4. Mobile Homes- Refer to MRP, Authority of Agents and Brokers a. Definition b. Main requirements 1) Tied down 2) Wheels removed 3) On foundation 4) Continuous skirting 5) Meet NC regulations c. Substandard conditions 1) Declined conditionally 2) Substandard charges 5. Vacant, Unoccupied or Under Renovations- Refer to MRP, Authority of Agents and Brokers a. Ineligible vacant or unoccupied beyond 60 days (The Plan is not a market for vacant or unoccupied properties) b. Exceptions 1) Estate Closings 2) Rehabilitation or renovation a) Allow up to 6 Months for completion & occupancy 3) Temporary vacancy or unoccupancy (pending sale) 4) Historical properties c. Underwriting requirements 1) Full details on application (Paper or Dynamic Web) 2) Secured against unauthorized access 3) Historical properties a) Photos b) Not open to trespass c) Progressive repair 4) Other than Historical properties unusual for Plan to continue beyond 1 policy term. 6. Unrepaired Damage- Refer to MRP, Authority of Agents and Brokers a. Declined if unrepaired damage & property is not under repair b. 20 day waiting period on interim coverage pending inspection c. Coverage with approval d. Coverage voided when inspection discloses unrepaired damage 4

7 7. Other Structures in Poor Condition- Refer to MRP, Authority of Agents and Brokers a. Decline risk b. Conditional surcharges c. Exclude Other Structure(s) (AP-81) G. Policy Writing and Policy Provisions Refer to MRP, Authority of Agents and Brokers 1. Introduction a. Location separately rated building or structure b. Individual locations, scheduled locations, No blanket locations c. Mortgagee copies mailed directly to mortgagee d. Policy term 1 or 3 years 2. Effective Date of Coverage a. Upon acceptance by underwriter 1) Day after submission for Dynamic Web applications (this electronic transmission is the preferred mode) 2) Properly completed application and appropriate premium 3) U.S. postmark 12:01 am day after postmark 4) Metered postmark Date of receipt by Plan b. Immediate interim coverage 1) Habitational risk only c. Commercial has 20 day wait 3. Policy Forms a. Dwelling Property 1) Basic DP1 2) Broad w/ ACV endorsement-dp2 with DP0476 3) Broad DP2 b. Commercial Property 1) Standard Property Policy CP ) PF 1002 Optional Perils for Broad Form Coverage 4. Notification of Approval with Changes a. Notice of coverage and / or limit changes 1) Written notification 5

8 5. Continuation of Coverage Certificate a. Initially full policy and forms b. Continuation Certificate for subsequent policy terms 1) Change in forms 2) Requested by policy holder 6. Deductibles - New Deductible Requirements effective September 1, 2010 a. Standard (minimums) 1) Dwelling Inland, All Other FAIR Plan Terr. Dwelling Amount Minimum Deductible Less than $100,000 $500 $100,000 - $249,999 $1,000 $250,000 and above $2,500 Dwelling Coastal, FAIR Plan Terr. 42 and 43 Named Storm Deductible 1% applies to Dwelling Values of $50,000 and above 2) Commercial, ALL FAIR Plan Territories Combined Coverage (Building plus Contents) Minimum Deductible Less than $100,000 $500 $100,000 - $249,999 $1000 $250,000 and above $2500 Named Storm Deductible (NSD) 1% applies to combined Building and Contents Values of $100,000 and above Use Endorsement CP 0328 (04 10) North Carolina-Named Storm Percentage Deductible. Deductible applies SEPARATELY to Building and Contents at EACH location. b) Higher deductibles are available, as per ISO CLM; Dwelling risks NC Dwelling Manual (Underwriting may require higher deductibles at appropriate credits) 7. Coinsurance a. When applicable in form b. Plan not responsible for values submitted by applicant 6

9 8. Other Insurance a. Plan will participate according to Other Insurance Clause in Plan forms b. Primary/Excess 1) Upon request, waive pro rata liability clause and provide primary coverage 2) Excess insurer must be either a) Admitted insurer in North Carolina b) Non-admitted insurer on North Carolina White List c) Requires specific endorsements 9. Maximum Limits Effective September 1, 2010 a. Residential Coverage A Dwelling - $750,000 1) Properties which exceed $750,000 must have excess coverage in place up to the full value of the property. b. Residential Coverage C Contents This limit may not exceed 40% of Coverage A. c. Commercial- 1) $2,500,000 per risk within multiple fire wall divisions 2) $6,000,000 max on real and personal property d. Crime 1) $10,000 residential 2) $15,000 commercial 10. Interim Coverage a. Dwelling risks 1) Immediate interim coverage available upon submission of completed application and estimated premium 2) Upon inspection, a determination of ineligibility or unacceptability will result in cancellation and return of premium b. Commercial, Vacant, Unoccupied or Seasonal Dwellings 1) Interim coverage available if: a) Coverage is not offered or denied within 20 days of request for inspection 7

10 b) Applicant pays the estimated annual premium (1) New business specific or class rates promulgated by NCRB or ISO (2) Continued business no less than premium on expiring policy c) Coverage effective on the later of the 20 th day after request for inspection or day after estimated premium received by NCJUA 2) If after inspection within the 20 days after request the property is determined to be ineligible or unacceptable, interim coverage is terminated and premium returned 3) Upon specific request, 20 day waiting period is waived for newly purchased vacant or seasonal dwellings if coverage required for a loan closing c. Applicant s Responsibility 1) Full cooperation with NCJUA in arranging for inspection, and making property available for inspection 2) Producer should inform applicant of responsibility 11. Inspections a. Request for inspection 1) Any owner of real or tangible property at fixed location outside of Beach Area 2) Upon submission of completed application, inspection may be made a) Providing recent, clear photo(s) may allow Plan to waive inspection for Dynamic Web submission b) Providing recent, clear photo(s) & Alternative Inspection Form (FP-16) may allow Plan to waive inspections for paper applications b. Inspection procedure 1) Procedures prescribed by NCJUA and approved by Commissioner of Insurance 2) Requirements may be waived or modified by NCJUA 8

11 3) Upon completion of application, representative of NCJUA will make inspection during normal working hours 4) Applicant or representative of applicant must accompany inspector 5) NCJUA must be provided full access to property 6) Photographs may be taken 7) Inspection report will be sent to NCJUA 8) Inspection reports are available upon request to a) Applicant b) Members of the NCJUA c) Producer of Record for applicant d) The Commissioner of Insurance 9) The inspector has no authority to make underwriting judgments or decisions for NCJUA c. Re-inspections 1) NCJUA reserves the right to re-inspect at any time 2) May be requested by applicant or insured for specific reasons 3) Post loss and post restoration inspections may be made 4) Routine inspections to determine continued eligibility or acceptability will be made d. Incomplete Inspections (Lockouts) 1) No coverage in force a) Notification by letter b) No further action until applicant arranges for re-inspection c) No response, file closed 2) Coverage in force a) No prior inspection report (1) 30 day Notice of Cancellation (2) Rescinded if necessary arrangement made b) Prior inspection report (1) Notice mailed to applicant and producer (2) No response, cancellation procedures started c) Cancellation due to incomplete inspection 9

12 (1) Not rescinded (2) New application (3) No interim coverage until inspection made & approval notice issued 3) Reimbursement for incomplete inspection cost by applicant or insured 12. Procedures After Inspections a. Risk is acceptable 1) Notification of any conditions charges applicable 2) Notification of necessary improvements to remove condition charges 3) Policy issued upon receipt of premium b. Risk is conditionally unacceptable 1) Notification of unacceptable conditions and necessary improvements 2) After re-inspection of improvements to unacceptable conditions and payment of premium, policy issued c. Risk is not acceptable notification to applicant of reasons d. Other post inspection issues 1) Verification of values a) Building values appraisal or cost estimator b) Personal property values exceeding 50% of building values (1) Request justification from inspector or Producer (2) May request inventory c) Commercial risks with personal property values exceeding $50,000 (1) Inventory, or (2) Audited financial statements 2) Condominiums or townhouses a) Requires applicant to advise if coverage form is All In, Original Specifications or Bare Walls by submitting Supplemental 10

13 Application AP 105. Copies of Articles of Incorporation, Declarations and Bylaws are not required b) Proper named insured c) Claims settlement issues d) Not used for valuation purposes 13. Payment of premiums (Policies) a. Payable net of Producer commission b. Method of payment 1) Cash/Money order 2) Certified check 3) Bank check 4) Check of licensed lending institution 5) Credit Card via website c. By mail or in person no cash through the mail d. Premium finance agreements if NCJUA provided documentation e. Producer check-certification not required when check received from North Carolina resident broker f. Proper payee designation 1) NC FAIR Plan 2) North Carolina Joint Underwriting Association 3) N.C.J.U.A. g. Once full payment received, NCJUA will not cancel for non-payment (caution against advancing premiums) h. Additional premiums 1) Billed when due, cancellation if not paid within 30 days 2) Producer unable to collect additional premiums a) Must notify NCJUA within 10 days b) Will not be held responsible for earned premium if prompt notice given i. Underwriting approval notices 11

14 1) File number will become the policy number, must be on remittance 2) Cannot be used for coverage changes a) Submit change over Dynamic Web (preferred method) or FAIR Plan Application for Change (AP-23), ACORD Change form, or letter of explanation 3) With Interim Coverage (estimated premium already submitted) a Confirmation Notice is sent, coverage effective date should be date application and premium received by the Plan (See effective date of coverage provisions) 4) No Interim coverage, Underwriting Approval Notice shows approval date, coverage will be effective on date of receipt of premium 5) No premium received a) Approval Notice lapses after 60 days b) New application required (1) Waived if premium received within 15 days of lapse (2) Does not back date coverage, effective upon date of receipt of premium unless hurricane is in the Box c) During first 60 days after lapse of Notice of Approval, effective coverage by submitting premium and (1) A copy of application for continuation marked NO CHANGE and resigned and redated, or (2) A statement from applicant of NO CHANGE signed and dated d) After 60 days post lapse of Notice of Approval new application required j. Return premiums 1) NCJUA will remit net return premiums to Producer 2) Producer should remit full return premium to insured 3) If NCJUA should be required to remit full return premium, such as premium finance arrangements, Producer is obligated to remit to NCJUA the unearned commission k. Waiver of additional or return premium 12

15 1) The NCRB and ISO rules will be followed on waiving of premiums due 2) If an insured requests remittance of a waived premium, it will be remitted l. Commissions - refer to website, Underwriting page, Producer Mailing December ) Full Commission a) 15% of Gross Premium for Dwellings & Commercial of Producer Certified & All submissions through Dynamic Web - except 10% b) 8% of Gross if Producer Certified and not submitting via Dynamic Web c) 5% of Gross premium if not Producer Certified and not submitting via Dynamic Web 2) NSF checks from Producers a) Producer will be charged NSF expenses incurred by NCJUA b) The NCJUA sends a list of agents involved with NSF checks to the Department of Insurance on a monthly basis. 14. Request for change a. Policy changes 1) Requested by insured in writing, preferably on Application for Change Form (AP-23) or ACORD Change request form or via Dynamic Web 2) If submitted in writing, must be personally signed by insured (facsimile signatures will be accepted) 3) Change must pertain to coverage on an existing location 4) Coverage increases and decreases must be justified 5) Changes requiring additional premiums a) NCJUA will issue amended Declarations Page and billing b) Change is effective upon approval or later date if requested by insured c) Changes within policy minimum premiums will follow the respective rules of NCRB or ISO 6) Changes not requiring additional premiums are effective immediately upon action by NCJUA b. Policy Assignment 13

16 1) Not permitted 2) New application by new owner is required 3) Old owner must request cancellation and return premium c. Change of Producer 1) Made upon continuation at expiration or mid term with cancellation and rewrite to new producer 2) New completed application or Application for Continuation of Coverage signed by insured showing the new Producer or request submitted via Dynamic Web is sufficient d. Change of location Dwelling contents only - endorsement of dwelling personal property to a new eligible location e. Adding a Location to Existing Dwelling Properties 1) Immediate coverage a) New application and photo showing front and one side b) Dwelling must be occupied or under construction (FP-17 or specific details required if vacant or unoccupied) c) Issue amended Declarations and (1) Issue bill if money did not accompany change request (2) If premium due not paid within 30 days, 10-day notice of cancellation on added location d) NCJUA has right to inspect for eligibility and acceptability 2) Not eligible for Immediate Coverage vacant buildings a) Must be underwritten b) Unoccupancy/Vacancy Questionnaire (FP- 17 or ACORD 190) or full written details required. Must meet vacancy / unoccupancy requirements c) Coverage not effective until premium received by NCJUA f. Willful Concealment or Misrepresentation may void policy ab initio from the beginning 14

17 15. Cancellation a. Insured s request Send via Dynamic Web (Preferred mode) 1) Immediate upon date received or later date specified on request 2) Back dated cancellations require supporting documentation 3) Unearned premium calculated based on rules of respective rating organization 4) Dwelling policies with multiple named insureds requires signatures of all named insureds if submitting by paper. Don t need for web submissions 5) Commercial policies require signature of First Named Insured if submitting by paper. Don t need for web submissions 6) Release of mortgagees and loss payees should be secured 7) Lost Policy Release is acceptable 8) Non-payment to premium finance companies will be honored with copy of supporting finance agreement if not on file with NCJUA b. Initiated by the NCJUA 1) Normal notice a) 30 days written notice of any cancellation b) 30 days written notice of any noncontinuation 2) Specified causes notice a) Commercial property not less that 5 days (10 days to mortgagee) b) Dwelling property 10 days c) Specified Causes (1) Grounds for initial non-acceptance (2) Non-payment of premium (3) Evidence of incendiarism (4) Material misrepresentation before or after a loss (5) Condition of risk becomes uninsurable (6) Other ground approved by the Commissioner of Insurance (a). Owner or occupant incendiarism (b) 65% or greater unoccupancy of rental units and no prior 15

18 (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) approval form FAIR Plan of a rehabilitation plan Intentionally unrepaired fire damage Following a fire, permanent repairs following satisfactory adjustment of loss have not commenced within 60 days Abandonment or removal of undamaged salvageable property from a building Termination of utility services and 120 days behind in utility accounts Reliable information exists indicating building will be burned. Indications of potential fraudulent arson Conviction or indictment of any party of interest for arson or attempt to defraud an insurance company More than 2 fire losses amounting to at least $500 or 1% of insurance in force, whichever is greater in any 12 months period or more than 3 such fires in any 24 month period provided the cause of fires is due to conditions under the control of the insured Material misrepresentations Non payment of premium 3) Notice of Cancellation a) Explanation of reasons and grounds b) Mailed directly to the following (1) Insured (2) Named mortgagees (3) Producer of record c) Description of appeals process 4) All unearned premiums due to cancellation initiated by FAIR Plan are calculated by the pro rata method 16

19 16. Interim Adjustment Notice Three Year Policies a. Notice 90 days prior to anniversary date b. Continuation requires verification of occupancy and payment of premium 17. Expiring coverages a. Not automatically renewed, must apply for continuation of coverage b. Continuation subject to underwriting standards for new policies c. Expiration notices 1) 90 days prior to expiration Expiration Notice and Application for Continuation of Coverage mailed to Producer of record or insured if no Producer of record 2) One week after mailing to Producer, postcard mailed to insured, advised to contact Producer 3) All preprinted information on notice should be reviewed for accuracy d. Application for Continuation of Coverage 1) Application to continue coverage a) Incomplete applications will be returned b) Should be returned prior to expiration with the premium so that the continuation policy is received by the insured by the anniversary date 2) Upon receipt by NCJUA, review for continued eligibility and acceptability 3) Application for Continuation of Coverage is not approved a) Notice will be sent within 5 days stating reasons for declination 18. Appeals of administrative or underwriting decision a. First Level Board of Directors of NCJUA 1) Written notice of appeal to NCJUA within 15 days of final determination by NCJUA 2) Hearing and ruling normally within 30 days of appeal b. Second Level to Commissioner of Insurance within 30 days (by statute) of NCJUA Ruling c. Third Level Statutorily prescribed judicial review of Commissioner's Order 17

20 19. Rates, rating plans and rating rules a. Dwelling rules, rates and forms approved by NCRB b. Commercial rules, rates and forms approved by ISO II North Carolina Insurance Underwriting Association NCIUA Important Note: House Bill 1305, which was passed into law by the NC Legislature on August 26, 2009, created significant changes to the NCIUA. The Beach Plan will now be known as the Coastal Property Insurance Pool. The outline which follows incorporates the changes as a result of HB A. Introduction 1. Purpose of NCIUA (NCGS 58-45) Refer to MRP, Rules and Procedures a. Adequate market for basic property insurance in the Beach Area b. Insurance necessary to make financing property in the Beach Area c. Equitable distribution among property insurers d. Adequate market for Wind and Hail policies in the Beach and Coastal Areas e. Market of last resort 2. Producer/Broker same as NCJUA with the exception that agents do have binding authority on certain property in the Coastal Property Insurance Pool. B. Eligibility Refer to MRP, Authority of Agents and Brokers 1. Persons same as NCJUA 2. Property same as NCJUA except a. Dwelling located in Beach Area 1) From South Carolina line to Fort Macon (Beaufort inlet) south and east of the inland waterway (barrier island) 2) From Fort Macon to Virginia line the Outer Banks b. Homeowner and Wind & Hail must be located in Coastal Area 1) The eighteen coastal counties Beaufort, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Hyde, Jones, New Hanover, 18

21 Onslow, Pamlico, Pasquotank, Pender, Perquimans, Tyrrell and Washington C. Underwriting Standards - Refer to MRP, Authority of Agents and Brokers 1. General Standards same as NCJUA a. Physical condition b. Use of premises c. Unacceptable conditions d. Underwriting philosophy e. Conditional risks 1) Declined 2) Accepted 2. Named Storm restrictions same as NCJUA 3. Mobile homes same as NCJUA 4. Vacant, unoccupied or under construction same as NCJUA 5. Unrepaired damage same as NCJUA 6. Other Structures in poor condition - same as NCJUA D. Policy Writing and Policy Provisions Refer to MRP, Authority of Agents and Brokers 1. Introduction same as NCJUA 2. Effective Date of Coverage same as NCJUA except: a. Binder Provisions see - website, Underwriting page, Producer Mailing, January 2003 b. Dynamic Web Applications day of submission 3. Policy forms same as NCJUA a. Dwelling /Commercial 1) Basic and Broad 2) Wind and Hail 3) Homeowner-refer to website, Underwriting page, MRP, Homeowner Guidelines 4. Deductibles, minimums Effective September 1, 2010 a. Standard (minimums) 1) Dwelling (Full Peril and Wind/Hail Only Policy) 19

22 Dwelling Amount Minimum Deductible Less than $100,000 $500 $100,000 - $249,999 $1,000 $250,000 and above $2,500 Named Storm Deductible 1% applies to Dwelling Values of $50,000 and above 2) Commercial (Full Peril and Wind/Hail Only) Combined Coverage (Building plus Contents) Minimum Deductible Less than $100,000 $500 $100,000 - $249,999 $1000 $250,000 and above $ Coinsurance same as NCJUA 6. Other insurance same as NCJUA Named Storm Deductible (NSD) 1% applies to combined Building and Contents Values of $100,000 and above - Use Endorsement CP 0328 (04 10) North Carolina-Named Storm Percentage Deductible. Deductible applies SEPARATELY to Building and Contents at EACH location. 7. Maximum limits a. Residential Coverage A Dwelling - $750,000 Refer to website, Underwriting page, Producer Mailing September 18, ) Properties which exceed $750,000 must have excess coverage in place up to the full value of the property. b. Residential Coverage C Contents HB 1305 states that this limit may not exceed 40% of Coverage A. c. Commercial - $3,000,000 -Refer to website, Underwriting page, Producer Mailing December ) Commercial Business income- Beach Plan only a) $300,000 per location Monthly limit of 1/4 or 1/6 20

23 8. Interim coverage same as NCJUA except a. Dwelling risks 1) Upon submission of completed application, photos and estimated premium, and 2) Upon determination of eligibility 3) Inspection not required for policy issuance b. Commercial, vacant, unoccupied or seasonal dwellings same as NCJUA c. Applicant s responsibility same as NCJUA 9. Inspections a. Request for inspection 1) Any owner of real or tangible property at fixed location in the Beach Area b. Inspection procedure 1) Procedures prescribed by NCIUA and approved by Commissioner of Insurance 2) Requirements may be waived or modified by NCIUA 3) Applicant or representative of applicant must accompany inspector 4) NCIUA must be provided full access to property 5) Photographs may be taken 6) Inspection report will be sent to NCIJUA 7) Inspection reports are available upon request to a) Applicant b) Members of the NCIUA c) Producer of Record for applicant d) The Commissioner of Insurance 8) The inspector has no authority to make underwriting judgments or decisions for NCIUA c. Inspection procedure implementation 1) Dwelling risks a) Initial inspection made by applicant s Producer (1) Dynamic Web applications included in application (2) Submitted on Supplemental Application Producer s Inspection Report (BP-16) or ACORD (a) Properly completed and signed by Producer 21

24 (b) Submitted with Basic Beach Plan Application (BP-A-3), ACORD supplements (3) No Producer, submitted by applicant 2) Commercial Risks same as NCJUA a) Re-inspections 3) NCIUA reserves the right to re-inspect at any time 4) May be requested by applicant or insured for specific reasons 5) Post loss and post restoration inspections may be made 6) Dwellings re-inspected every 9 years recent photos every 3 years a) New construction 1 photo after 5 years 7) NCIUA will notify Producer & Insured when photos should be submitted a) Submit electronically via Dynamic Web b) Attach to Continuation of Coverage form (1) Policy number, Insured s name and date taken on front of photo 8) Commercial property a) Building values $100,000 or less, reinspected every 3 years b) Building values greater than $100,000, reinspected every 2 years d. Incomplete Inspections (Lockouts) same as NCJUA except applies only to commercial property 10. Procedures after inspections same as NCJUA 11. Payment of premiums (Policies) a. Premium payments same as NCJUA except 1) Insured personal checks accepted 2) Proper Payee designation must be: NC Beach Plan North Carolina Insurance Underwriting Association or N.C.I.U.A. 3) Gross premium is required See website, Underwriting page, Producer Mailing October b. Returned Premiums Follows Direct Bill Provisions- Refer to website, Underwriting Page, Producer Mailing March

25 1) Return to Producer if within 45 days of inception for New Business. c. Waiver of additional or return premium 1) Commercial policies same as NCJUA d. Direct Bill- Refer to website, Underwriting page, Producer Mailing November ) Full down payment a time of application a) Can pay by Credit card refer to website, Home page, Online Credit Card Payment 2) Continuations billing to payer (policyholder or Mortgage Company) a) 45 days prior to expiration b) Continuations mailed to appropriate parties, copy to producer c) Premium finance companies will not be billed directly 3) Payment a) Received prior to expiration (anniversary) date to avoid notice of cancellation b) If cancellation notice sent, payment must be received prior to cancellation date to continue coverage without lapse c) Payments received after cancellation date but within 60 days of expiration will be reinstated effective date of receipt of payment. (1) Return premiums sent to insured d) Payments received after 60 days will be returned and new applications must be submitted (1) Hurricane procedures will override above payment provisions (2) Payments must be for gross premium due 23

26 4) Direct Bill for Commercial policies- Refer to website, Underwriting page, Producer Mailing March ) Installment Plan Effective January 1, 2011 a) 2 Pay Semi-Annual 50% downpayment at time of application, 50% due by the 180 th day. b) 4 Pay Quarterly 25% downpayment at time of application, 3 remaining 25% installments by the 90 th, 180 th, 270 th day. c) Installment Fee - $3.00 per installment (including downpayment) d) Eligibility Rules (1) $250 minimum annual premium (2) Full-term annual policies only (3) Not eligible if more than 3 prior non-payment cancellations e. Commissions refer to website, Underwriting page, Producer Mailing December ) Using Dynamic Web (must be Producer Certified)-Dwelling & 13% of Gross Premium 10% of Gross Premium 2) 8% of Gross Premium if Producer Certified and not submitting via Dynamic Web 3) 5% of Gross Premium if not Producer Certified and not submitting via Dynamic Web 4) Direct Bill- Statements and Commission payments at end of business month f. NSF checks-same as NCJUA 12. Request for Change-same as NCJUA/NCIUA a. Policy assignment 1) Permitted where no change in occupancy 24

27 2) New application by new owner is required when change in occupancy b. Change of Producer same as NCJUA c. Change of Location same as NCJUA except 1) Will accept change in location of dwelling when in receipt of: a) Properly completed Application of Change b) Properly completed Supplemental Application Producer s Inspection Report (BP-16) or equivalent ACORD notice form c) Certificate of Compliance with NC Building Codes at new location d) Dates of transit e) Coverage suspended while in transit or if does not meet NC Building Codes at new location f) Same procedures for commercial coverage in Beach Plan except BP-16 is not required, but an inspection at new location may be made d. Adding a location to existing dwelling properties same as NCJUA e. Willful concealment or misrepresentation same as NCJUA 13. Cancellation a. Insured s Request same as NCJUA b. Initiated by the NCIUA 1) Normal Notice a) 30 days written notice of any cancellation b) 30 days written notice of any noncontinuation 2) Specified causes notice a) Commercial property not less than 5 days (10 days for mortgagee) b) Dwelling property 10 days 3) Grounds for cancellation a) Non-payment of premium b) Evidence of incendiarism c) Material misrepresentation before or after a loss 25

28 d) Conditions after initial acceptance that would have been grounds for initial nonacceptance e) Conditions after inspection that would have been grounds for non-acceptance f) Other standards approved by the Commissioner of Insurance 4) Notice of Cancellation-same as NCJUA 14. Expiring coverages same as NCJUA 15. Appeals of administrative or underwriting decision same as NCJUA 16. Rates, rating plans and rating rules same as NCJUA, except a, Wind Mitigation Credits Effective May 1, ) Credit for structures meeting certain construction guidelines 2) Credit will apply to new construction AND to rebuilt or retrofitted structures. 3) Credits based on standards developed by the Institute for Business and Home Safety (IBHS). III Claims Procedures NCJUA and NCIUA A. Regular Procedures 1. Catastrophe losses provide some exceptions to the regular loss adjustment procedures, see the following section 2. Reporting a. Promptly send loss notice to the NCJUA/NCIUA, do not hold for estimates, fire reports, etc. b. Appropriate ACORD form or via Dynamic Web c. Do not report losses that are not covered d. Mail to: Claims Department North Carolina FAIR and Beach Plans P O Box 8009 Cary, NC Fax to: (919)

29 3. Emergency situations: a. Property uninhabitable b. Imminent danger of further damage c. Fire of suspicious origin d. Fax to above number indicating Emergency/Rush e. Phone to (919) or (800) ) If reported by phone, mail loss notice as confirmation 4. Assignment authority a. No authority to assign claims on behalf of NCJUA/NCIUA b. Plans will not be responsible for loss settlements or adjusting costs for improperly assigned claims c. No repairs should be made until authorized by a designated adjuster or by the Plans d. Property owners should be encouraged to photograph and otherwise document all damage e. Damaged property must be inspected by an adjuster f. Resolution of all questions of coverage and loss adjustment rests with NCJUA/NCIUA 5. Payment of Claims a. Made by Plans b. Usually mailed directly to insured c. Producer will be notified of settlement and amount by postcard 6. Adjustment Philosophy - ACV unless replacement cost basis is provided 7. Supplemental claims a. Intend to handle all damage in first adjustment b. Claims for supplemental damage should be made directly to NCJUA/NCIUA c. Include itemized statement of proposed repairs d. Photos of damaged items B. Catastrophe Procedures 1. Producers in the Coastal Area may make application annually for authority to assign certain losses to specified adjusting firms under conditions of catastrophe losses 27

30 2. Report losses to NCJUA/NCIUA by phone, fax or Dynamic Web 3. Upon submission of photo, repairs up to $2500 may be authorized 4. Single Adjuster Concept for losses involving Wind and Water damage a. One independent adjuster will handle wind and flood losses 1) Flood assignment follows Primary coverage b. Pre-matching of wind and flood coverages, address must be same on both policies c. Use ACORD 1 for loss notices for both types of damage or submit via Dynamic Web 5. Catastrophe Loss Handling Issues 1) Loss notices should be fully completed; showing location of damaged property, not primary residence address, and accurately describe the type of damage to assure prompt response from adjusters 2) Include on ACORD 1 or Dynamic Web Loss Notice- carrier and policy number information for both wind and flood carriers 3) Loss notices must be submitted in duplicate (if using ACORD 1 form) a copy for the wind and flood carrier 4) If multiple locations, clearly indicate damaged locations a. Keep insureds aware of policy terms and conditions 1) ACV vs. Replacement Costs 2) Applicable sub-limits of coverage 3) Applicable deductibles 4) Standard exclusions b. Not all damage may be covered by the Coastal Property Insurance Pool (Beach Plan) and the Flood Policy 28

31 c. On initial loss report, obtain full and accurate description of damage, including, if possible, amount of flood vs. wind damage d. Obtain phone number of insured and include on loss notice; include information about temporary locations, if applicable e. Make sure policy info in computer is accurate, loss notices should have correct form numbers f. Instruct insureds to arrange for temporary repairs, photograph all damage and keep itemized list of damage g. Hardship cases have priority primary residences before secondary residences h. Insureds should be advised of the demands that catastrophe losses put on available resources; their patience and understanding will help resolve their problems as quickly as possible Producers must submit a copy of the course completion certificate with their producer number written on the certificate. These may be mailed or faxed ( ) 29