BULLETIN OREGON MUTUAL INSURANCE COMPANY TO: January 29, Northwest Regional Office. New Homeowners. All Oregon Agents

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1 OREGON MUTUAL INSURANCE COMPANY DEPT: SUBJECT: BULLETIN NO: DATE: 2030 January 29, 2007 Northwest Regional Office TO: All Oregon Agents New Homeowners Good news about the Oregon Mutual Homeowner Program! For new Homeowner business effective February 1, 2007 we are implementing our PCS (Personal Characteristic Score) Homeowner Program. Similar to our PCS Auto Program, this will expand Oregon Mutual s competitive range in the Homeowner Market. With this change our WesPro Homeowner Program will no longer be available for new business. However, for risks that previously qualified for WesPro you ll find that the new OMI program is competitively priced. The PCS program incorporates a wider range of risk characteristics in the rating process, creating a better match between premium and the individual risk. These include but are not limited to: Age and value of dwelling Protection class Number and types of claims Time since last significant claim Liability limit and policy deductible Package and other discounts These characteristics are used to generate a PCS rating factor which will be used in conjunction with an insurance credit score to determine the policy premium. There is no longer a need for you to pre-tier customers prior to the quote/rating process. The OMI BizLink quote system or IBQ system (when available) will automatically provide our best possible premium for each risk based on the data entered. Other changes and enhancements to our existing Homeowner Programs A new 6% Advance Submission Credit. This is applied to policies submitted 30 days or more prior to the effective date. A Newly Purchased Home Credit of 10%. This applies to homes that have been purchased by the owner within two months prior to the effective date of the policy. This credit gradually decreases over a four-year period. If the home also qualifies for the new home construction credit, the policy will receive whichever credit is greater. We have added the following endorsements to the basic policy at no additional cost: Homeowner Accidental Death Benefit M0005H, Refrigerated Food Products H155, and Sports Equipment M0030H. We have increased the Ordinance or Law coverage limit from 10% to 25% for both our Functional Replacement Cost Loss Settlement and Replacement Cost Provision endorsements. The limit of coverage provided will print on the declaration page. We are introducing new optional Liability and Physical Damage Coverage for policyholders that own All- Terrain vehicles. Effective March 15, 2007 this coverage will also be available for existing Homeowner policyholders. We have realigned several rating territories. Please refer to the revised zip code territory definitions. The PCS and other Homeowner program enhancements create an excellent opportunity to grow your Personal Lines book with Oregon Mutual. We are eager to write new business and look forward to assisting you. Applications can be submitted in any form - via application, OMI BizLink quote/upload, and IBQ. (We anticipate the availability of IBQ rating within the next few days. Look for our announcement.) Commission for this new program The existing Oregon Mutual Homeowner commission of 20% will apply, except for PC 9 and 10 where the commission will continue to be 15%. (over) BULLETIN

2 New BizLink feature, quote existing Homeowners Similar to our auto rating system on BizLink, we have added a Quote Existing feature to the Homeowner rating system. This new feature will allow you to re-quote an existing OMI Homeowner policy into this new program. The feature also enables you to re-price an in-force policy when a coverage change is made. In order to quote the new PCS Market on existing OMI policies that have not yet renewed: Select the Quote Existing option in BizLink quote/upload. Make changes if any, and select the calculate button for your Market 3 quote. On the proposal screen select re-quote Market 3 to Market 4. On the next screen, choose the desired effective date. It must be 2/1/2007 or later to be eligible for Market 4. You can then proceed with the Market 4/PCS quote. If you want to review the Market 3 premiums again, return to the quote screen, select edit eff and exp dates and reselect the OMI policy effective date. We will be making this same functionality available for Western Protectors policies within the next few weeks. If you are interested in rewriting an existing customer in the new Homeowner program, please contact your Personal Lines Underwriter for assistance. Please contact your Personal Lines Underwriter or Agency Marketing Manager if you have any questions regarding our new PCS Homeowner Program. Thank you for your continued support of Oregon Mutual Insurance Company. Eric, Cutler, CPCU, CIC Northwest Personal Lines Business Unit Manager Our Mutual Interest is You

3 OREGON MUTUAL INSURANCE COMPANY M0005H (2-07) HOMEOWNER ACCIDENTAL DEATH BENEFIT AGREEMENT We will pay $1000 for the death of an insured caused by an accident occurring on the insured premises. The death must be the direct result of the accident, independent of all other causes and must occur within 90 days after the date of the accident. EXCLUSIONS: We will not pay for death caused directly or indirectly by: 1. bodily or mental infirmity or bacterial infections or any other kind of disease or medical or surgical treatment (except surgical operations made necessary solely by injuries covered by this endorsement); 2. war (declared or undeclared) including civil war, insurrection, rebellion, revolution, warlike acts by a military force or personnel or any consequence of any of these. Discharge of a nuclear weapon shall be deemed a warlike act even if accidental; 3. any nuclear hazard (nuclear means nuclear reaction, radiation, radioactive contamination, including radon or any result of these). This includes the negligent, defective or improper design or construction or maintenance of a nuclear facility or other act or omission which results in a nuclear hazard; 4. earthquake, tornado, hurricane, flood, volcanic eruption or other natural disasters; 5. suicide whether sane or insane; and 6. motorized vehicles. M0005H (2-07) FRM

4 OREGON MUTUAL INSURANCE COMPANY H155 (4-00) ADDED PERILS FOR REFRIGERATED FOOD PRODUCTS OREGON (INCLUDES RESTRICTIONS OR ABRIDGMENTS) We cover loss to contents of a freezer or refrigerated unit on the insured premise. We pay no more than $500. The covered contents must be owned by you. The loss must be caused by change in temperature resulting from: 1. Interruption of electrical service to refrigeration equipment. The interruption must be caused by damage to the generating or transmission equipment; or 2. Mechanical or electrical breakdown of the refrigeration system. You must maintain the refrigeration equipment in proper working condition. No deductible applies. H155 (4-00) Oregon F50861.FRM

5 OREGON MUTUAL INSURANCE COMPANY M0030H (2-07) SPORTS EQUIPMENT ENDORSEMENT This endorsement insures against accidental direct physical loss to sports equipment caused by perils not otherwise excluded. Sports equipment not eligible for this coverage include motorized equipment, watercraft, aircraft including hang gliders or parachutes, jet skis, and scuba diving equipment. Our limit of liability is $1500 and is subject to the policy deductible. This special limit is the total limit per occurrence for all sports equipment losses not included in the named perils for personal property. EXCLUSIONS THAT APPLY TO SPORTS EQUIPMENT a. loss or damage caused (1) by any refinishing, renovating or repairing process; (2) by dampness of atmosphere and/or extremes of temperature; (3) by gradual depreciation, inherent defect or faulty manufacture. b. breakage, marring, scratching, tearing or denting unless caused by (1) fire; (2) theft; or (3) collision or derailment or overturn of a vehicle on which the insured property is being transported. c. loss or damage caused by or resulting from use of the insured property for the purposes for which it was intended. d. infidelity of the insured's employee or persons to whom the insured property may be entrusted or rented. M0030H (2-07) FRM

6 OREGON MUTUAL INSURANCE GROUP G8619HO (2-07) IMPORTANT NOTICE TO POLICYHOLDERS Dear Policyholder, With this renewal we have made the following enhancements in our Homeowner Program. Ordinance and Law Coverage If you have purchased the optional Replacement Cost Provisions for your home, we have increased the amount of Ordinance and Law Coverage from 10% to 25% of the limit shown for your insured residence. This change is shown on your Declaration page and there is no additional charge for the increase to 25% of your residence limit. Should you have any questions regarding this change or the amount of Ordinance and Law Coverage you should purchase, please contact your Oregon Mutual agent. All Terrain Vehicle Coverage We now have optional Liability and Physical Damage Coverage available for policyholders who own or are thinking about purchasing an All Terrain Vehicle. For complete information on eligibility and rates for All Terrain Vehicle Coverage, please contact your Oregon Mutual agent. Thank you for insuring with the Oregon Mutual Insurance Group. Eric Cutler, CPCU, CIC Northwest Personal Lines Business Unit Manager Our Mutual Interest is You G8619HO (2-07) FRM