OFFICE OF INSURANCE REGULATION

Transcription

1 FINANCIAL SERVICES COMMISSION CHARLIE CRIST GOVERNOR OFFICE OF INSURANCE REGULATION ALEX SINK CHIEF FINANCIAL OFFICER BILL MCCOLLUM ATTORNEY GENERAL KEVIN M. MCCARTY COMMISSIONER CHARLES BRONSON COMMISSIONER OF AGRICULTURE August 6, 2009 Ms. Kathy Popejoy, Actuary & Asst. Secretary-Treasurer, FCAS, MAAA Mr. Adam Swope, Actuary & Pricing Manager, FCAS, MAAA, CPCU State Farm Florida Insurance Company One State Farm Plaza Bloomington, IL RE: State Farm Florida Insurance Company Homeowners Multi-Peril Company File Number: HO OIR File Number: FCP PLEASE REFER TO THE OIR FILE NUMBER WHEN CORRESPONDING Dear Ms. Popejoy and Mr. Swope: Attached for your records is a copy of the original cover letter and a set of manual pages stamped "approved" for the above referenced filing. Our records indicate that this filing is effective 11/1/2009 for new business and 12/1/2009 for renewal business. This is to advise State Farm Florida that revision of certain discounts or surcharges contained in the referenced file are hereby approved. The following discounts or surcharges are being eliminated from the rating plan as requested by State Farm Florida: Claim Free Discount, Claim Record Rating Plan, Home Alert Protection and Home/Auto. The approved manual pages include those with the stamp of approved. The overall premium impact of the approved changes to the rating plan is 28.4% per the Office s calculation. The final rate level effect will be based on an amended Rate Collection System submission, which must be provided prior to final approval. The filing does not include indications to address the overall rate level and base rates. As you know, State Farm Florida s annual rate filing, which is not due before December of this year, will address the overall rate level and base rate changes, if any are justified and supported. State Farm Florida has requested the Office to consider allowing revisions to its Utilities Rating Plan and Building Code Effectiveness Rating Plan. The plan contains duplicative elements of the mitigation credits. These revisions are approved. This is consistent with the suggestions made by the Office in Informational Memorandum OIR M. FLORIDA OFFICE OF INSURANCE REGULATION 200 EAST GAINES STREET TALLAHASSEE, FLORIDA website: Affirmative Action / Equal Opportunity Employer

2 Kathy Popejoy, Adam Swope FCP August 6, 2009 Page 2 The changes to State Farm Florida s mitigation credits contained in this file are not approved. As discussed on prior occasions, an alternate mitigation credit is allowable under Florida regulations; however, such credits must be supported by a detailed study pursuant to Section 69O , Florida Administrative Code and other pertinent regulations. If State Farm Florida chooses to file alternate mitigation credits in accordance with the rule, the study of the alternate credits may best be performed by the proprietor of the model to ensure explicit documentation as provided in the current approved ARA study. Some items of significance that should be addressed in the study, if one is conducted, include but are not limited to: 1. Explicit documentation with respect to the reflection of all code wind speeds. 2. Explicit support for the selected base structure. This should include an explanation of how it complies with Section , Florida Statutes and the following data: a. The expected hurricane losses in total b. The expected hurricane losses for each group of discount features c. The expected hurricane losses for policyholders receiving no discount 3. Discounts must reflect all features that reduce windstorm loss. Further, areas with a higher resistance to wind speed must reflect higher discounts. 4. Include detailed support to show base rates are consistent with the base risk that is not receiving mitigation discounts. In summary, State Farm Florida is authorized to remove the Claim Free Discount, Claim Record Rating Plan, Home Alert Protection and Home/Auto and to make revisions to its Utilities Rating Plan and Building Code Effectiveness Rating Plan as reflected in the stamped pages. The mitigation discount changes are disapproved, and a notice of rights regarding this aspect of the filing is attached. Please verify that these pages are the final printed manual pages intended for use with this filing and that the effective dates noted above are correct. If we do not hear from you within the next 10 days, we will assume that you have received a stamped copy of all manual pages applicable to this filing and that the effective dates are correct. Sincerely, Office of Insurance Regulation

3 Kathy Popejoy, Adam Swope FCP August 6, 2009 Page 3 State Farm Florida Insurance Company FCP NOTICE OF RIGHTS Pursuant to Sections and , Florida Statutes and Rule Chapter , Florida Administrative Code (F.A.C.), you may have a right to request a proceeding to contest this action by the Office of Insurance Regulation (hereinafter the "Office"). You may request a proceeding by filing a Petition. Your Petition for a proceeding must be in writing and must be filed with the General Counsel acting as the Agency Clerk, Office of Insurance Regulation. If served by U.S. Mail, the Petition should be addressed to the Florida Office of Insurance Regulation at 612 Larson Building, Tallahassee, Florida If Express Mail or hand-delivery is utilized, the Petition should be delivered to 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida The written Petition must be received by, and filed in the Office no later than 5:00 p.m. on the twenty-first (21) day after your receipt of this notice. Unless your Petition challenging this action is received by the Office within twenty-one (21) days from the date of the receipt of this notice, the right to a proceeding shall be deemed waived. Mailing the response on the twenty-first day will not preserve your right to a hearing. If a proceeding is requested and there is no dispute of material fact the provisions of Section (2), Florida Statutes may apply. In this regard you may submit oral or written evidence in opposition to the action taken by this agency or a written statement challenging the grounds upon which the agency has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary one will be conducted in Tallahassee, Florida or by telephonic conference call upon your request. If you dispute material facts which are the basis for this agency's action you may request a formal adversarial proceeding pursuant to Sections and (1), Florida Statutes. If you request this type of proceeding, the request must comply with all of the requirements of Rule Chapter , F.A.C., must demonstrate that your substantial interests have been affected by this agency's action, and contain: a) A statement of all disputed issues of material fact. If there are none, the petition must so indicate; b) A concise statement of the ultimate facts alleged, including the specific facts the petitioner contends warrant reversal or modification of the agency's proposed action; c) A statement of the specific rules or statutes the petitioner contends require reversal or modification of the agency's proposed action; and d) A statement of the relief sought by the petitioner, stating precisely the action petitioner wishes the agency to take with respect to the agency's proposed action. In some instances you may have additional statutory rights than the ones described herein. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. Any request for an administrative proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. Revised 9/4/2008

4 From: Bonnie J Lyman To: Bonnie J Lyman; Subject: State Farm Response - OIR Date: Monday, August 03, :36:25 AM Attachments: Notional Data Structure.xls Supplemental Exhibit D.xlsx Supplemental Exhibit C.xlsx FL HO Filing - Revised Exhibit 2 - Wind Mitigation.pdf FL HO Filing - Revised Supplemental Exhibit B.pdf From: Adam Swope Sent: Friday, July 31, :09 PM To: 'Robert Lee' Cc: Kathy Popejoy Subject: State Farm Response - OIR Dear Mr. Lee, Attached are our responses to your inquiries. 1. Confirm the text file is the input reflecting the risks modeled by each zip. If this is not the case what is this? Yes, the test file is the input reflecting the risks modeled by each zip code. The zip code is the first 5 digits of the ACCNTNUM column. 2. On the zip file confirm this is output. The Average Annual Loss (AAL) is in last column (GULoss) of the text file. 3. On the RMS Field descriptions provide definition of each as not clear. We have updated the "RMS Field Descriptions" tab in the "Notional Data Structure. xls" spreadsheet to clarify the descriptions. 4. The RMS model output appear to reference codes or formulas and not numbers or relativities so explain.

5 The reference codes (such as E11111) are appended to the zip codes in the ACCNTNUM column of the text file. The factors that these codes correspond to are described in the tabs "RMS - ACCNTNUM Mapping", "RMS - Each Zip" and "RMS - Map Modeled to WLRRP" in the "Notional Data Structure.xls" spreadsheet. How the AALs from the text file are used to calculate the discounts is described in the response to question 1.d. of the July 27, 2009 letter from the FL OIR. We have summarized the AAL results from the text file into the discount table (see Supplemental Exhibit C). Two examples of how the results from the output file are combined into a single cell in the discount table is also attached as Supplemental Exhibit D. We have revised our relativity analysis for the wind mitigation discounts. As a result, the rate effect for our wind mitigation discount changes is now 12.3% instead of 13.1% in the filing. The overall proposed effect of the all the changes is now 44.0%. We have attached revised Exhibit 2 from the original filing, revised Supplemental Exhibit B from our response of July 29. We will submit updated manual pages and RCS once we have approval of the filing. 1. 1d indicates used output of average annual loss using ARA base home and within zipcodes and the year of construction ranges indicated relativities and discounts calculated. I do not have any of this in filing so please provide on at least statewide basis this calculation for our review. See response to 4. above. 2. How do you know that the use of ARA base home is equivalent to building characteristics in your base rate? This is very important as this will impact the calculation. It appears you selected a different base than in rule discounts including a base that is eligible for discounts currently. We selected a base home to be an average home, and we relied on the ARA study to determine which characteristics are representative of an average home. It is true that the home with the mitigation features we selected as the base receives a discount based on the wind mitigation discount plan we currently have in place. Our current discount plan is based on OIR-B The selection of the base home and the base rate are theoretically dependent on one another. However, with this filing we are only determining which mitigation

6 features perform better than an average home and providing discounts accordingly. We plan to provide detailed support for our selected base rates in our next base rate filing, which is due by December 31, 2009 per the Office. Sincerely, Adam Swope, F.C.A.S., MAAA, CPCU Actuarial Pricing Manager State Farm Insurance Companies (309) From: Robert Lee To: Kathy Popejoy Sent: Wed Jul 29 14:59: Subject: RE: I need some clarification of this as follows: 1. Confirm the text file is the input reflecting the risks modeled by each zip. If this is not the case what is this? 2. On the zip file confirm this is output. 3. On the RMS Field descriptions provide definition of each as not clear. 4. The RMS model output appear to reference codes or formulas and not numbers or relativities so explain. In your letter please respond to the following: 1. 1d indicates used output of average annual loss using ARA base home and within zipcodes and the year of construction ranges indicated relativities and discounts calculated. I do not have any of this in filing so please provide on at least statewide basis this calculation for our review.

7 2. How do you know that the use of ARA base home is equivalent to building characteristics in your base rate? This is very important as this will impact the calculation. It appears you selected a different base than in rule discounts including a base that is eligible for discounts currently. If I can get this response preferably by end of the day tomorrow I can review to discuss filing with management which I would like to do on Monday. Any questions,contact me. Robert Lee Actuary Florida Office of Insurance Regulation From: Kathy Popejoy [mailto:kathy.popejoy.a0gq@statefarm.com] Sent: Wednesday, July 29, :54 PM To: Robert Lee Subject: << File: FL OIR Data Request.zip >>

8 July 29, 2009 Commissioner of Insurance Regulation Florida Department of Financial Services Office of Insurance Regulation Bureau of Property/Casualty Forms and Rates 200 East Gaines Street Tallahassee, FL Corporate Headquarters One State Farm Plaza, D-4 Bloomington, IL Fax Attn: Robert Lee Actuary IN REPLY PLEASE REFER TO: HO Filing of July 24, 2009 RE: State Farm Florida Insurance Company Homeowners Program Rule Revision In response to your letter dated July 27, 2009, we make the following reply. 1. Provide as required by Rule 69O detail alternate study with all assumptions are available or the Office to review. This has been discussed as required at least three times recently. This study should include at minimum following: a) All input data used by model. See Supplementary Information Component in I-File System. b) Documentation whether this is Industry data or State Farm Florida data. The State Farm Florida alternate Wind Mitigation Discount Program was developed without Industry or State Farm Florida data. Rather, the study was performed using a notional data approach that consisted of generating exposures with the specific risk characteristics we were intending to measure. Within each Florida zip code, a policy was produced with the specific combination of building characteristics described by each cell of the current discount program. These policies differed only by these building features, and were in all other ways uniform Masonry construction, Single Story, 1700 Square Feet, Single Family Dwelling, and Total Insured Values of $205,000 ($100,000 building, $75,000 contents, $10,000 appurtenant structures, $20,000 additional living). In total, more than 300,000 notional policies were generated to capture the loss mitigation effects of the building characteristics modeled. c) All output data provided by model. See Supplementary Information Component in I-File System., Copyright, State Farm Mutual Automobile Insurance Company 2009 No reproduction of this copyrighted material allowed without express written consent from State Farm

9 d) Detail support how the output data was used to calculate filed discounts. Notional policies were modeled using the RMS Risklink 6.b model. Average annual loss estimates were calculated for each policy without the application of any policy terms (limits, deductibles, etc.). In order to compare relative damages across both policies and geographic regions, the base home was selected to match the base home used in the ARA study (Existing construction, Non-FBC roof covering, no secondary water resistance, roof deck attachment using 8d nails and 6 / 12 spacing, roof-wall connection using clips, no window protection, and a roof geometry other than hip). Relativities were calculated for each notional policy by dividing the average annual loss estimate of the policy by the average annual loss estimate of the base home within the same zip code. For existing constructions, the RMS Risklink 6.b model separately assesses vulnerabilities for two ranges of year built pre 1994, and Giving equal weight to each vulnerability assumption, average annual loss estimates were generated for each year built range and averaged. The indicated discount equaled one minus the damage relativity calculated for each notional policy within each Florida zip code. The zip code data was aggregated into State Farm Florida rating zones, with each zip code contributing equally to the final aggregated discounts. e) Detailed description how modeler develops impact of building code and Wind mitigation feature including description of use of actual loss data and Engineering vulnerability tests or judgment. RMS has implemented vulnerability functions and Wind Loss Mitigation features that meet the vulnerability standards of Florida Commission on Hurricane Loss Methodology. The vulnerability functions are developed on the basis of structural and wind engineering principles coupled with analyses of historical storm loss data, building codes and published studies. The RMS Component Vulnerability Model is based on the methodology outlined by Professors Dale Perry and Norris Stubbs of Texas A&M University (Stubbs et al., 1995). This methodology has been augmented by internal research by RMS staff, and has been published by RMS staff (Khanduri, 2003). References used by RMS for developing the vulnerability functions include: studies performed for the National Science Foundation (J.H. Wiggins Company, 1980; NBS, 1981) and for the Veterans Administration (Texas Tech. University, 1978). studies completed by the Army Corps of Engineers, FEMA and NOAA (USACE, 1990), the National Research Council (NRC, 1993), the Building Research Establishment in England (Cook, 1985), and Don Friedman at the Travelers (Friedman, 1987). Other pertinent references include Davenport et al. (1989), Hart (1976), Liu et. al. (1989), McDonald (1986, 1990), Mehta (1983, 1992), Minor (1979), Sparks (1988, 1990, 1993), Stubbs (1993), and Zollo (1993). RMS has used historical storm loss data and research from the 2004/2005 storm seasons as well as the work from Sparks and Bhinderwal (1993) from Clemson University, and Don Friedman at Travelers (Friedman 1987) in calibration of the vulnerability functions, as well as other loss data obtained from RMS clients. The model represents local construction and building code criteria via two mechanisms vulnerability regions and vulnerability functions for specific year bands. The changes in building codes and building construction practices are modeled through vulnerability functions that vary by year of construction of the building, and also region of the state (vulnerability regions). The vulnerability functions for different year bands, and different regions are reasonable and theoretically sound based on RMS research on the changes of building code 2

10 provisions and construction practices in Florida and across the U.S., as well as the region s experience with natural catastrophes. The RMS U.S. Hurricane model supports modification of the base vulnerability functions through the application of secondary modifiers developed using the Component Vulnerability Model. The modifiers can be building-characteristic specific (e.g., improved roof sheathing or anchors) or external (e.g., storm shutters). These characteristics must be specifically selected by the user. The default case is to not include any modifiers. If modifiers are selected they are clearly identified in the input files and output reports. The following secondary modifiers are available in the model: Roof sheathing strength Roof covering Roof anchor Foundation system Wind resistance of window openings Wind resistance of doors openings Roof geometry Opening protection (shutters) The application of mitigation measures is reasonable when applied both individually and in combination. Each secondary modifier contributes to the coefficient of variation (CV) of a particular damage estimate. As one or more modifiers are applied to a given location, the CV is reduced according to the contribution of those modifiers towards the total CV. 2. Filed discounts for FBC Compliant structures show for higher wind speeds lower discounts than in lower wind speeds. Provide detailed explanation how this is reasonable and not unfairly discriminatory. Some of the building characteristics considered in this study are rated to withstand wind speeds up to 110 mph only. For areas of the state that are subjected to less severe winds, the performance of these mitigation features will be improved. Conversely, areas of the state that are subjected to winds in excess of 110 mph have an increased likelihood of seeing failure of these devices, and larger resulting losses. Other building characteristics will likely behave similarly, with an increasing likelihood of failure with increasing wind speed, showing a decrease in loss mitigation performance for extremely high wind speeds. 3. Provide detail documentation by territory group how elimination of newer construction discounts to hurricane portion of premium produces the discounts filed from current approved discounts. See Supplementary Information Component in I-File System. 4. Document by form and territory for each item in rating plan including accumulated effect in total of support for rate effects in filing which must include by category number of policies, current premium and rating factor impact. See Supplementary Information Component in I-File System. 5. Please explain why for the Home Alert Plan discounts were not reduced to reflect application to non hurricane premium like done in Utilities Rating Plan for hurricane premium rather than being eliminated. Due to the financial condition of State Farm Florida, offering many of our current discounts is no longer appropriate. We propose to eliminate the Home Alert Discount, just as we are proposing to eliminate the Claim Free and Home/Auto Discounts, to address the deteriorating financial condition of State Farm Florida. 3

11 6. Provide letter from actuary responsible for filing that filed rate factors meet requirements of Florida statutes and rules. See Supplementary Information Component in I-File System. In an effort to work with you as promptly as possible, please direct any questions to: Kathy Popejoy (309) Adam Swope (309) Please send paper correspondence to the attention of the State Filings Unit at the address shown above. Sincerely, Kathy Popejoy, F.C.A.S., MAAA Actuary and Assistant Secretary-Treasurer JG/bl 4

12 State Farm Florida Insurance Company Florida Homeowners Program Explanatory Memorandum Changes Effective: 11/1/09 New Business; 12/1/09 Renewals I. Overview We respectfully propose changes to many of our rating factor plans that exist today. The changes result in an overall increase of +44.8% for the Homeowners Program. The following paragraphs detail the changes to the specific rating plans. II. Summary of Changes by Form Shown below are the overall changes by Form. Proposed Policy Form Changes Homeowners +45.4% Renters +28.7% Condominium Unitowners +36.1% Homeowners Program +44.8% III. Wind Mitigation Discount Plan We propose to revise the discounts for the Wind Mitigation Discount Plan. The revised discounts are based upon the computer simulated model results obtained from the Risk Management Solutions (RMS) Risklink V6.b, which was approved by the Florida Commission on Hurricane Loss Projection Methodology. Since the model was not used to develop statewide rate indications, the catastrophe model support questions are not required and have not been provided. The first step in the process of developing the revised wind mitigation discounts was to map the characteristics of the OIR discount structure from B to the rating characteristics in the model used. RMS provides guidance on how to map many of the mitigation features from B to their model. The second step was to run the model with a notional distribution to get the indicated loss relativities for the cells in the existing discount structure. Notional policies within each ZIP Code were generated reflecting the building characteristics of each option within the current discount structure, and all other rating variables besides mitigation fixed. A base home with certain mitigation features for each ZIP Code was selected in order to determine relativities. The selected base for the plan was the home selected in the ARA study in 2002, which was referred to in that study as a typical home. This base utilized an industry-level vulnerability representative of an average home, and is the same vulnerability assumption used when developing rate level indications. The indicated loss relativities were related to the base home. Any combination of mitigation features that had expected loss relativities equal to or greater than the base have proposed adjustments of 0%. The other wind mitigation features have proposed credits equal to 1 minus the loss relativity from the study. See Exhibit 2 for the current and proposed discounts, as well as the percent change on the wind portion of the premium. Individual policyholder changes range between -1% to +390% on the wind portion of the premium. The average statewide impact is +13.1%. Explanatory Memorandum Page 1

13 EXHIBIT 2 - Page 1 State Farm Florida Insurance Company Florida Homeowners Proposed Wind Mitigation Discount Plan FBC COMPLIANT CONSTRUCTION (NEW) CURRENT: Other Roof Hip Roof No Secondary Secondary No Secondary Secondary Water Resistance Water Resistance Water Resistance Water Resistance No No No No Opening Opening Opening Opening Opening Opening Opening Opening Protection Protection Protection Protection Protection Protection Protection Protection , 53, 93, , 24, 29, 30, 44, 45, 46, 50, 81, , 48, , 23, 26, 28, 37, 62, 71, 74, 79, 87, 90, 92, 97, , 02, 03, 08, 11, 15, 31, 32, 33, 34, 35, 69, , 43, , 25, , 19, 22, 27, 38, 73, 82, 84, 86, 89, 91, , 06, 07, 09, 20, 21, 75, PROPOSED: Other Roof Hip Roof No Secondary Secondary No Secondary Secondary Water Resistance Water Resistance Water Resistance Water Resistance No No No No Opening Opening Opening Opening Opening Opening Opening Opening Protection Protection Protection Protection Protection Protection Protection Protection , 53, 93, , 24, 29, 30, 44, 45, 46, 50, 81, , 48, , 23, 26, 28, 37, 62, 71, 74, 79, 87, 90, 92, 97, , 02, 03, 08, 11, 15, 31, 32, 33, 34, 35, 69, , 43, , 25, , 19, 22, 27, 38, 73, 82, 84, 86, 89, 91, , 06, 07, 09, 20, 21, 75, PERCENT CHANGE: Other Roof Hip Roof No Secondary Secondary No Secondary Secondary Water Resistance Water Resistance Water Resistance Water Resistance No No No No Opening Opening Opening Opening Opening Opening Opening Opening Protection Protection Protection Protection Protection Protection Protection Protection 40 13% 23% 16% 23% 23% 32% 29% 32% 41, 53, 93, 94 25% 36% 30% 36% 14% 22% 19% 29% 14, 24, 29, 30, 44, 45, 46, 50, 81, 95 35% 38% 40% 38% 14% 17% 14% 17% 17, 48, 96 21% 32% 26% 32% 9% 17% 14% 24% 12, 23, 26, 28, 37, 62, 71, 74, 79, 87, 90, 92, 97, 99 46% 43% 52% 43% 23% 22% 23% 22% 01, 02, 03, 08, 11, 15, 31, 32, 33, 34, 35, 69, 83 46% 43% 52% 43% 27% 22% 27% 22% 42, 43, 80 39% 44% 60% 56% 21% 27% 35% 36% 04, 25, 39 65% 67% 90% 88% 47% 47% 65% 57% 13, 19, 22, 27, 38, 73, 82, 84, 86, 89, 91, 98 65% 67% 90% 88% 58% 60% 71% 71% 05, 06, 07, 09, 20, 21, 75, % 83% 156% 106% 68% 67% 82% 79%

14 EXHIBIT 2 - Page 2 State Farm Florida Insurance Company Florida Homeowners Proposed Wind Mitigation Discount Plan NON-FBC (EXISTING CONSTRUCTION) - CURRENT ZONES REMAINDER 07, 09, 13, 19, 21, 22, 25, 27, 38, 42 OF STATE 43, 73, 80, 82, 84, 86, 89, 91, 98 Roof Roof Deck Roof/Wall Opening OTHER HIP OTHER HIP Cov. Attachment Conn. Protection No SWR SWR No SWR SWR No SWR SWR No SWR SWR TOE None NAILS Basic or All Hurr. Or All None NON FBC 1 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All Hurr. Or All None NON FBC 2 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All "/6") Hurr. Or All None NON FBC or CLIPS Basic or All Equi. Hurr. Or All ((2) 8d nails SING. None per supporting WRAPS Basic or All member for Hurr. Or All dimensional DBLE. None lumber) WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All Hurr. Or All None FBC 1 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All Hurr. Or All None FBC 2 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All "/6") Hurr. Or All None FBC or CLIPS Basic or All Equi. Hurr. Or All ((2) 8d nails SING. None per supporting WRAPS Basic or All member for Hurr. Or All dimensional DBLE. None lumber) WRAPS Basic or All Hurr. Or All

15 EXHIBIT 2 - Page 3 State Farm Florida Insurance Company Florida Homeowners Proposed Wind Mitigation Discount Plan NON-FBC (EXISTING CONSTRUCTION) - PROPOSED ZONES REMAINDER 07, 09, 13, 19, 21, 22, 25, 27, 38, 42 OF STATE 43, 73, 80, 82, 84, 86, 89, 91, 98 Roof Roof Deck Roof/Wall Opening OTHER HIP OTHER HIP Cov. Attachment Conn. Protection No SWR SWR No SWR SWR No SWR SWR No SWR SWR TOE None NAILS Basic or All Hurr. Or All None NON FBC 1 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All Hurr. Or All None NON FBC 2 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All "/6") Hurr. Or All None NON FBC or CLIPS Basic or All Equi. Hurr. Or All ((2) 8d nails SING. None per supporting WRAPS Basic or All member for Hurr. Or All dimensional DBLE. None lumber) WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All Hurr. Or All None FBC 1 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All Hurr. Or All None FBC 2 CLIPS Basic or All Equi. 6"/12") Hurr. Or All SING. None WRAPS Basic or All Hurr. Or All DBLE. None WRAPS Basic or All Hurr. Or All TOE None NAILS Basic or All "/6") Hurr. Or All None FBC or CLIPS Basic or All Equi. Hurr. Or All ((2) 8d nails SING. None per supporting WRAPS Basic or All member for Hurr. Or All dimensional DBLE. None lumber) WRAPS Basic or All Hurr. Or All

16 EXHIBIT 2 - Page 4 State Farm Florida Insurance Company Florida Homeowners Proposed Wind Mitigation Discount Plan NON-FBC (EXISTING CONSTRUCTION) - PERCENT CHANGE ZONES REMAINDER 07, 09, 13, 19, 21, 22, 25, 27, 38, 42 OF STATE 43, 73, 80, 82, 84, 86, 89, 91, 98 Roof Roof Deck Roof/Wall Opening OTHER HIP OTHER HIP Cov. Attachment Conn. Protection No SWR SWR No SWR SWR No SWR SWR No SWR SWR TOE None 0% 6% 89% 100% 0% 8% 39% 47% NAILS Basic or All 54% 72% 163% 186% 41% 61% 127% 163% Hurr. Or All 79% 104% 194% 233% 64% 92% 178% 257% None 54% 72% 163% 194% 22% 35% 79% 104% NON FBC 1 CLIPS Basic or All 89% 117% 213% 270% 61% 92% 153% 225% Equi. 6"/12") Hurr. Or All 100% 133% 233% 285% 79% 117% 159% 242% SING. None 54% 75% 163% 203% 25% 39% 82% 104% WRAPS Basic or All 89% 122% 213% 270% 64% 96% 128% 193% Hurr. Or All 100% 138% 233% 285% 79% 117% 134% 213% DBLE. None 54% 75% 163% 194% 27% 39% 78% 98% WRAPS Basic or All 89% 122% 213% 270% 64% 96% 108% 164% Hurr. Or All 100% 138% 217% 265% 63% 98% 113% 183% TOE None 10% 16% 86% 96% 10% 16% 25% 33% NAILS Basic or All 85% 104% 108% 126% 61% 80% 66% 89% Hurr. Or All 127% 156% 119% 141% 82% 110% 100% 138% None 138% 183% 113% 152% 61% 79% 77% 117% NON FBC 2 CLIPS Basic or All 134% 170% 107% 133% 105% 159% 119% 181% Equi. 6"/12") Hurr. Or All 118% 164% 93% 126% 123% 214% 125% 218% SING. None 133% 188% 100% 133% 73% 112% 73% 134% WRAPS Basic or All 133% 181% 96% 130% 109% 188% 108% 184% Hurr. Or All 119% 159% 85% 117% 110% 215% 108% 194% DBLE. None 118% 169% 88% 119% 63% 116% 59% 121% WRAPS Basic or All 118% 167% 85% 117% 94% 195% 88% 172% Hurr. Or All 106% 150% 78% 104% 97% 200% 92% 171% TOE None 10% 16% 49% 55% 2% 7% 1% 4% 3 NAILS Basic or All 74% 90% 73% 88% 31% 45% 34% 53% 6"/6") Hurr. Or All 100% 118% 84% 103% 50% 69% 65% 96% None 98% 129% 75% 107% 30% 42% 42% 74% NON FBC or CLIPS Basic or All 94% 127% 85% 104% 72% 110% 85% 138% Equi. Hurr. Or All 91% 121% 74% 104% 97% 171% 96% 176% ((2) 8d nails SING. None 100% 145% 66% 96% 39% 78% 44% 107% per supporting WRAPS Basic or All 103% 141% 78% 109% 84% 155% 88% 161% member for Hurr. Or All 88% 131% 70% 100% 96% 179% 88% 159% dimensional DBLE. None 87% 137% 56% 85% 42% 121% 31% 96% lumber) WRAPS Basic or All 94% 135% 74% 100% 86% 168% 79% 153% Hurr. Or All 87% 119% 67% 91% 85% 182% 83% 156% TOE None 12% 16% 122% 127% 8% 11% 49% 56% NAILS Basic or All 89% 96% 233% 245% 64% 72% 170% 186% Hurr. Or All 133% 138% 300% 317% 96% 108% 263% 292% None 96% 100% 257% 270% 39% 43% 113% 117% FBC 1 CLIPS Basic or All 150% 163% 355% 355% 100% 113% 226% 263% Equi. 6"/12") Hurr. Or All 170% 186% 371% 390% 127% 138% 264% 295% SING. None 96% 100% 257% 270% 43% 47% 113% 122% WRAPS Basic or All 150% 163% 355% 355% 104% 117% 193% 229% Hurr. Or All 170% 186% 338% 360% 120% 134% 227% 260% DBLE. None 96% 104% 257% 270% 43% 49% 100% 109% WRAPS Basic or All 156% 163% 336% 332% 98% 109% 167% 196% Hurr. Or All 170% 186% 310% 330% 98% 112% 195% 225% TOE None 22% 25% 100% 100% 18% 22% 34% 37% NAILS Basic or All 122% 133% 141% 150% 78% 83% 94% 100% Hurr. Or All 174% 182% 167% 174% 114% 119% 154% 173% None 203% 214% 182% 195% 80% 87% 118% 131% FBC 2 CLIPS Basic or All 196% 204% 168% 183% 152% 181% 200% 235% Equi. 6"/12") Hurr. Or All 191% 205% 161% 176% 205% 253% 231% 279% SING. None 211% 223% 164% 171% 107% 123% 131% 158% WRAPS Basic or All 214% 229% 167% 182% 179% 214% 206% 247% Hurr. Or All 186% 215% 150% 165% 205% 259% 206% 250% DBLE. None 189% 212% 145% 152% 111% 136% 114% 150% WRAPS Basic or All 195% 220% 156% 171% 173% 233% 182% 243% Hurr. Or All 168% 195% 139% 153% 175% 244% 181% 221% TOE None 22% 25% 60% 60% 6% 9% 5% 8% 3 NAILS Basic or All 93% 95% 100% 107% 41% 50% 59% 64% 6"/6") Hurr. Or All 126% 141% 121% 130% 70% 80% 108% 127% None 143% 161% 132% 138% 41% 46% 76% 90% FBC or CLIPS Basic or All 154% 165% 137% 150% 122% 127% 158% 188% Equi. Hurr. Or All 155% 155% 139% 153% 175% 206% 188% 229% ((2) 8d nails SING. None 165% 183% 118% 129% 73% 86% 96% 129% per supporting WRAPS Basic or All 164% 190% 144% 159% 150% 189% 171% 229% member for Hurr. Or All 162% 170% 133% 147% 183% 219% 175% 214% dimensional DBLE. None 146% 167% 109% 119% 94% 138% 85% 127% lumber) WRAPS Basic or All 162% 189% 133% 147% 163% 213% 169% 207% Hurr. Or All 148% 174% 128% 141% 176% 236% 156% 215%