Application for Management Liability Insurance for Not for Profit Organizations

RIGHT (G Application for Management Liability Insurance for Not for Profit Organizations SUBJECT TO THEIR TERMS, THE LIABILITY COVERAGE SECTIONS PURCHASED AS PART OF THIS POLICY PROVIDE COVERAGE FOR CLAIMS FIRST MADE DURING THE POLICY PERIOD OR EXTENDED REPORTING PERIOD, IF APPLICABLE. Instructions: Whenever used in this Application, the term Applicant shall mean the party proposed as the Named Insured and any subsidiaries and their respective directors, officers, trustees and governors. The Applicant is required to complete sections A, B, C, G, H, I The Applicant should complete the other applicable section(s) for the coverage(s) requested. If additional space is required for a response, include such response in an attachment to this Application, clearly identifying the Application question for which a response is being provided. A. General Information 1. Applicant s Name: Executive Officer of the Applicant designated to receive all notices from the Insurer or authorized agent: Name: Title: Phone number: Email address: 2. Principal Address: Street City State Zip Code Website address: (if applicable) 3. Was the Applicant established at least two years ago? 4. E.I.N. Number: (Employer Identification Number) 5. Current Number of Employees 6. Does the Applicant currently have tax exempt status under the U.S. Internal Revenue Service Code? DRWN d9110 (9/2005) Page 1 of 13

7. Description of operations for both Applicant and any not-for-profit Subsidiaries Primary Secondary (if any) Description * Primary operations are those with the largest revenue. 8. Does the Applicant have a parent organization? If Yes, provide the parent organization name: 9. Is the Applicant a membership organization? If Yes, i. provide number of members ii. describe the basis for accepting members iii. describe the process for approving membership 10. Is the majority of the Applicant s revenues generated by: Private tuition & fees or Federal or local taxes If Private tuition & fees, complete the Educational Organization Supplemental Questionnaire. 11. Does the Applicant have any joint ventures or for-profit subsidiaries for which coverage is requested? If Yes, provide the following details: Name of Subsidiary/ Joint Venture Description of Operations Wholly Owned 12. Does the Applicant have any physical operations or employees located outside of the principal state? If Yes, list each country and/or state: Country (if other than U.S.) State DRWN d9110 (9/2005) Page 2 of 13

13. Has the Applicant had any downsizing action in the past 18 months? Downsizing actions include plant, branch, or office closings, consolidations or layoffs. If applicable, please complete the Downsizing Supplemental Application. B. Financial Information Provide the following information. Ending Date Total Assets Fund Balance * Total Revenues Net Income/(Loss) *Fund Balance = Total Assets Total Liabilities Latest Year 1 st Prior Year C. Coverage Requested Directors & Officers Liability Organization Liability (included in applicable Directors & Officers Liability Limit) Employment Practices Liability (EPL) Third Party Liability (included in applicable EPL Limit) Fiduciary Liability D. Directors & Officers Liability (complete only if applying for this coverage) 1. Has the Applicant had any changes in the Executive Director or Chief Financial Officer: Past 18 months? Next 12 months? If Yes, provide the following information and identify the applicable reasons for each change. Applicable Reasons: NR = Normal Retirement Age reached H = Hired by Competitor D= Death P = Promotion I = Ill Health N = New Appointment D = Demotion T = Involuntary Termination Date of Change Position Held Reason Comments 2.(a) Does the Applicant provide consulting services and/or advice to a party other then employees of the organization, in any of the following areas: computer/ technology, legal, accounting, medical/managed care, insurance*, real estate or investments? DRWN d9110 (9/2005) Page 3 of 13

*Sponsoring an insurance program is not considered advice. Computer/Technology Legal Accounting Investments Medical/Managed Care Insurance Real Estate (b) Do the activities of the Applicant include any of the following: research and development, accreditation, peer review, disciplinary or professional ethics, testing, standard setting or the publishing of technical standards or manuals? Research & Development Accreditation Peer Review Publishing of technical standards or manuals Disciplinary or Professional Ethics Testing Standard Setting E. Employment Practices Liability (complete only if applying for this coverage) 1. Provide the following total numbers of employees for the Applicant: Date Full Time Part Time (including Temporary or Seasonal) Total Volunteers Leased/Independent Contractors Total # of employees in California Total # of Involuntary Terminations Current 1 st Prior Calendar Year 2. Human Resources Policies and Procedures (a) Does the Applicant have written procedures for handling employment complaints of discrimination, harassment, or other improper conduct or grievances? (b) Does the Applicant distribute a written employment handbook to all employees? Yes (c) Has legal counsel reviewed Human Resources policies and employment handbook? Yes No No (d) Does the Applicant have an individual assigned to manage Human Resources functions? DRWN d9110 (9/2005) Page 4 of 13

If Yes, has that individual had specific Human Resources training? F. Fiduciary Liability (complete only if applying for this coverage) Yes No 1. Provide the following information for all plans for which coverage is requested. Use the following abbreviations for Plan type and Sponsorship: Plan Type: DB = Defined Benefit CB = Cash Balance DC = Defined Contribution HW = Health & Welfare ES = Employee Stock Ownership Plan Sponsorship: A = Applicant as single employer M = Multiple employer plan G = Governmental C = Church O = Other (describe): Plan Name Plan Type Asset Value Number of Participants Sponsorship 2. Any action(s) resulting in a reduction of benefits, or any plan being terminated, frozen, sold, or merged? Past 18 months? Next 12 months? If Yes, provide the following information for each affected plan: Plan Name Plan Type Date of Action Value of Assets Affected 3. Does each plan conform to the standards of eligibility, participation, vesting and other provisions of Employee Retirement Income Security Act (ERISA) or similar foreign laws if applicable? DRWN d9110 (9/2005) Page 5 of 13

4. Does the Applicant use the following outside professional services? (a) Investment advisers (b) Legal Counsel (c) Actuaries 5. For each Defined Benefit or Cash Balance Plan, provide the following information: Plan Name Plan Type Current Funding Adequacy * % Participants who are Current Employees * From IRS Form 5500 Schedule B, calculated as: Line 2.a / Line 2.b.4 column (3) G. Current and Prior Insurance (to be completed by all applicants) 1. For each coverage requested, provide the following information: Year Insurer Policy Period Limit ($000) Directors & Officers Liability Current Employment Practices Liability Current Fiduciary Liability Current Retention / Deductible Premium 2. During the past five years, has the Applicant s management liability coverage been cancelled or nonrenewed for a reason other than the insurer withdrawing from a state or no longer providing coverage? (Missouri applicants need not answer) If Yes, provide the following information: Cancellation Or Nonrenewal Date Insurer Coverage Reason for Cancellation or Nonrenewal DRWN d9110 (9/2005) Page 6 of 13

H. Limits and Retentions Requested Indicate the requested limit and retention options by coverage. Liability Limits Retentions Option Shared Separate Coverage Part Limits Aggregate D&O EPL Fiduciary D&O EPL Fiduciary #1 or #2 or #3 or Liability limits must be either Shared Aggregate or Separate Coverage Part Limits. I. Claims Information (to be completed by all applicants) 1. Within the last five years, have any claims been made against any party proposed for insurance? If Yes, please complete the Claims Supplemental Application. 2. Is any party proposed for insurance aware of a circumstance, including a planned employee downsizing which could develop into a claim? If Yes, please complete the Claims Supplemental Application. 3. Within the last 12 months, has there been any litigation which could have a material impact on your operations? If Yes, provide the following details: Plaintiff or Defendant Description of Litigation Status Amount in Dispute Other Parties Involved DRWN d9110 (9/2005) Page 7 of 13

4. Within the last 12 months, have there been any regulatory or governmental claims or adverse actions, including challenges to tax status? If Yes, provide the following details: Regulator or Governmental Entity Involved Description Of Action Current Status Relief Sought Other Parties Involved 5. Have there been any allegations involving a breach of fiduciary duty, criminal conduct, or violations of ERISA (or similar statutes) against any party or plan proposed for coverage? If Yes, provide the following information: Plan, Entity or Person Nature of Allegation Status 6. Have there been any events reportable to the Pension Benefit Guaranty Corporation (PBGC) within the past 3 years? WITHOUT PREJUDICE TO ANY OTHER RIGHTS AND REMEDIES OF THE INSURER, IT IS AGREED THAT ANY CLAIM, FACT, CIRCUMSTANCE, SITUATION, TRANSACTION, EVENT, ACT, ERROR, OR OMISSION REQUIRED TO BE DISCLOSED IN RESPONSE TO THE ABOVE QUESTIONS, AND ANY CLAIM ARISING FROM OR RELATED TO SUCH REQUIRED DISCLOSURE, IS EXCLUDED FROM ALL PROPOSED INSURANCE. J. Additional Application Materials At the discretion of the Insurer, and as is relevant to the requested coverage(s), the following materials may be required. The most recent fiscal year-end and interim financial statements Form 5500 (and attachments) for all ERISA plans Loss Run Report DRWN d9110 (9/2005) Page 8 of 13

K. Notice to Applicant The Undersigned warrants that to the best of his/her knowledge and belief, the statements set forth herein are true. The Insurer will have relied upon this Application in issuing any policy. The Insurer is hereby authorized to make any investigations and inquiry in connection with the information, statements and disclosures provided in this Application. The signing of the Application does not bind the Undersigned to purchase the insurance, nor does review of this Application bind the Insurer to issue a policy. It is agreed that this Application shall be the basis of the contract should a policy be issued. This Application shall be attached and will become part of the policy. All written statements and materials furnished to the Insurer in conjunction with this Application are hereby incorporated by reference into this Application and made a part hereof. The Undersigned declares that the person(s) and entity(ies) proposed for this insurance understand that: The Policy shall apply only to Claims made during the Policy Period or Extended Reporting Period (if applicable); and Defense Expenses that are incurred shall be applied against the retention amount. L. Material Change The Undersigned further declares that if any occurrence or event that takes place prior to the effective date of the insurance for which application is being made which may render inaccurate, untrue, or incomplete any statement made, such occurrence or event will immediately be reported in writing to the Insurer. The Insurer may withdraw or modify any outstanding quotations and/or authorization or agreement to bind the insurance. M. Fraud Warnings NOTICE TO ARKANSAS, MINNESOTA, AND OHIO APPLICANTS: ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT HE/SHE IS FACILITATING A FRAUD AGAINST AN INSURER, SUBMITS AN APPLICATION OR FILES A CLAIM CONTAINING A FALSE OR DECEPTIVE STATEMENT IS GUILTY OF INSURANCE FRAUD, WHICH IS A CRIME. NOTICE TO COLORADO APPLICANTS: IT IS UNLAWFUL TO KNOWINGLY PROVIDE FALSE, INCOMPLETE, OR MISLEADING FACTS OR INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING OR ATTEMPTING TO DEFRAUD THE COMPANY. PENALTIES MAY INCLUDE IMPRISONMENT, FINES, DENIAL OF INSURANCE, AND CIVIL DAMAGES. ANY INSURANCE COMPANY OR AGENT OF AN INSURANCE COMPANY WHO KNOWINGLY PROVIDES FALSE, INCOMPLETE, OR MISLEADING FACTS OR INFORMATION TO A POLICY HOLDER OR CLAIMANT FOR THE PURPOSE OF DEFRAUDING OR ATTEMPTING TO DEFRAUD THE POLICY HOLDER OR CLAIMANT WITH REGARD TO A SETTLEMENT OR AWARD PAYABLE FROM INSURANCE PROCEEDS SHALL BE REPORTED TO THE COLORADO DIVISION OF INSURANCE WITHIN THE DEPARTMENT OF REGULATORY AGENCIES. NOTICE TO DISTRICT OF COLUMBIA, MAINE, TENNESSEE, AND VIRGINIA APPLICANTS: IT IS A CRIME TO KNOWINGLY PROVIDE FALSE, INCOMPLETE, OR MISLEADING INFORMATION TO AN INSURANCE COMPANY FOR THE PURPOSE OF DEFRAUDING THE COMPANY. PENALTIES MAY INCLUDE IMPRISONMENT, FINES, OR A DENIAL OF INSURANCE BENEFITS. NOTICE TO FLORIDA APPLICANTS: ANY PERSON WHO, KNOWINGLY AND WITH INTENT TO INJURE, DEFRAUD, OR DECEIVE ANY EMPLOYER OR EMPLOYEE, INSURANCE COMPANY, OR SELF-INSURED PROGRAM, FILES A STATEMENT OF CLAIM OR AN APPLICATION CONTAINING ANY FALSE OR MISLEADING INFORMATION IS GUILTY OF A FELONY OF THE THIRD DEGREE. NOTICE TO KENTUCKY APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE CONTAINING ANY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME. DRWN d9110 (9/2005) Page 9 of 13

NOTICE TO LOUISIANA AND NEW MEXICO APPLICANTS: ANY PERSON WHO KNOWINGLY PRESENTS A FALSE OR FRAUDULENT CLAIM FOR PAYMENT OF A LOSS OR BENEFIT OR KNOWINGLY PRESENTS FALSE INFORMATION IN AN APPLICATION FOR INSURANCE IS GUILTY OF A CRIME AND MAY BE SUBJECT TO CIVIL FINES AND CRIMINAL PENALTIES. NOTICE TO MARYLAND APPLICANTS: ANY PERSON WHO, WITH INTENT TO DEFRAUD OR KNOWING THAT HE/SHE IS FACILITATING A FRAUD AGAINST AN INSURER, SUBMITS AN APPLICATION OR FILES A CLAIM CONTAINING A FALSE OR DECEPTIVE STATEMENT MAY BE GUILTY OF INSURANCE FRAUD. NOTICE TO NEW JERSEY APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SHALL ALSO BE SUBJECT TO A CIVIL PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM FOR SUCH VIOLATION. NOTICE TO OKLAHOMA APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO INJURE, DEFRAUD, OR DECEIVE ANY INSURER, MAKES ANY CLAIM FOR THE PROCEEDS OF AN INSURANCE POLICY CONTAINING ANY FALSE, INCOMPLETE, OR MISLEADING INFORMATION IS GUILTY OF A FELONY. NOTICE TO OREGON AND TEXAS APPLICANTS: ANY PERSON WHO MAKES AN INTENTIONAL MISSTATEMENT THAT IS MATERIAL TO THE RISK MAY BE FOUND GUILTY OF INSURANCE FRAUD BY A COURT OF LAW. NOTICE TO PENNSYLVANIA APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT, WHICH IS A CRIME AND SUBJECTS SUCH PERSON TO CRIMINAL AND CIVIL PENALTIES. A POLICY CANNOT BE ISSUED UNLESS THE APPLICATION IS PROPERLY SIGNED AND DATED BY ONE OF THE FOLLOWING INDIVIDUALS WHO IS AUTHORIZED TO SIGN ON BEHALF OF ALL INSUREDS INCLUDING THE INSURED ENTITY AND ANY PERSONS FOR WHOM THE INSURANCE IS TO BE PROVIDED: THE CHAIRMAN OF THE BOARD, PRESIDENT OR CEO. Signed: (Applicant) Title: Date: DRWN d9110 (9/2005) Page 10 of 13

Condominium, Community/Homeowner Associations Supplemental Application (a) Identify which of the following apply: i. Condominium ii. Homeowner Association (PUD) iii. Commercial Community Association iv. Property Owners Association v. Cooperative vi. Interval (Timeshare) Association (b) Total number of units/lots (c) Average unit/lot value (d) Percentage of units: Sold Rented/Leased (e) Does the builder/developer have any ownership interest in the Applicant? (f) Does any person or entity own multiple units comprised of more then 5% of the total units? If Yes, identify the person and the number of units owned (g) Do the Applicant s bylaws require binding arbitration or other binding alternative dispute resolution for resolution of disputes brought or demands made by members of Applicant? (h) Is membership in the association mandatory for all unit holders? (i) Has the organization placed any restrictions on the transferability of the Property? If Yes, please provide details (j) Has the organization placed any restrictions on the Use of the Property? If Yes, please provide details (k) Identify which of the following facilities or services are provided by and/or managed by the Applicant? i. swimming pool, ii. golf course, iii. equestrian iv. tennis facility v. other sports facilities, vi. marina, vii. clubhouse, viii.restaurant, ix. childcare, x. Medical Facility, and xi. Security DRWN d9110 (9/2005) Page 11 of 13

(l) Within the past 18 months: 1. How many liens and foreclosures have been placed on units? Liens Foreclosures 2. Has the Applicant completed a foreclosure sale against a unit owner? 3. Have any Board elections been challenged? 4. Has the Board taken legal action against a unit owner other than for the collection of dues or fees? If the answer to (l) 3 or 4 is yes, provide full details DRWN d9110 (9/2005) Page 12 of 13

Educational Organization Supplemental Application Please provide the following: a) Total Student Enrollment b) Total number of Faculty c) Has the percentage of Faculty decreased by more then 10% in any of the previous 3 years? If Yes, how many of those that left had been employed more then 3 years d) Maximum duration of Faculty employment contract e) How often are employment contract terms negotiated? f) Do you conduct background checks on ALL Employees prior to employment? g) Do you offer housing for Students? h) Do you conduct Parent/Teacher/Student conferences at least two times per academic year? i) Do you have a Student Handbook which has been updated within the past 3 years? j) Are revenues derived from specific tuition fees? If No, is the Applicant a Private Educational Organization? k) Does the Applicant receive grants? If (j) AND (k) are No, please explain funding DRWN d9110 (9/2005) Page 13 of 13