Submit a Valid Claim Form Deadline: February 12, 2016 Ask to be excluded Deadline: November 24, Object Deadline: November 24, 2015

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1 NOTICE OF CLASS ACTION SETTLEMENT California Superior Court, County of Los Angeles IF FIRE INSURANCE EXCHANGE APPLIED DEPRECIATION WHEN CALCULATING A PAYMENT MADE TO YOU ON A PROPERTY LOSS INSURANCE CLAIM, A CLASS ACTION LAWSUIT MAY AFFECT YOUR RIGHTS AND YOU MAY BE ELIGIBLE TO RECEIVE A PAYMENT FROM A SETTLEMENT A Court authorized this notice. This is not a solicitation from a lawyer. You are not being sued. The lawsuit challenges the method that Fire Insurance Exchange uses to determine the actual cash value of lost or damaged property. Plaintiffs allege that Fire Insurance Exchange improperly took excess depreciation in determining actual cash value, which resulted in the underpayment of some property loss or damage claims. Fire Insurance Exchange denies that it did anything wrong. The Court has not decided which of the parties contentions is correct. The Court has allowed the lawsuit to be a class action for purposes of resolving the case only. You may be eligible for a payment as a potential Class Member under the proposed class action settlement ( Settlement ) if: You were insured under a policy issued by Fire Insurance Exchange covering damage or loss to property in California ( Policy ), suffered a loss covered by the Policy, made a claim ( Insurance Claim ), and received a property loss payment on or after May 6, 2010 on the Insurance Claim; Fire Insurance Exchange applied depreciation in determining the actual cash value of the lost or damaged property in connection with the Insurance Claim; The total amount of applied depreciation was not paid or credited by Fire Insurance Exchange in connection with the Insurance Claim; Payments on your Insurance Claim did not equal or exceed all applicable coverage limits and sub-limits, your Insurance Claim was not resolved through a prior appraisal, and you did not sign a written release of all claims in connection with your Insurance Claim; Your Insurance Claim was closed as of March 31, 2015; and You otherwise qualify as a Class Member, submit a Valid Claim Form, and are entitled to a Settlement Class Payment as provided for and defined in the Class Action Settlement Agreement. Your legal rights are affected whether you act or do not act. Please read this notice carefully. Submit a Valid Claim Form Deadline: February 12, 2016 Ask to be excluded Deadline: November 24, 2015 Object Deadline: November 24, 2015 Go to a hearing Do Nothing YOUR LEGAL RIGHTS AND OPTIONS IN THE PROPOSED SETTLEMENT If the Court grants final approval to the proposed Settlement and you qualify for a Settlement Class Payment, you will receive a payment. Get out of the lawsuit and get no payment. The only option that allows you to sue Fire Insurance Exchange separately for the claims resolved by the proposed Settlement. Submit a timely written objection to the proposed Settlement or request to intervene in the lawsuit, and tell the Court about why you don t agree with the proposed Settlement. People who object or seek to intervene are still entitled to make a claim for a Settlement Class Payment so long as they also submit a Valid Claim Form. Ask to speak in Court about the proposed Settlement if, before the Court hearing, you submit a timely written objection to the proposed Settlement or request to intervene in the lawsuit. You will not be potentially eligible for a Settlement Class Payment and you will not be able to sue Fire Insurance Exchange over the claims resolved by this proposed Settlement. These rights and options and the deadlines to exercise them are explained in this notice. The Court in charge of this lawsuit still has to decide whether to give final approval of the proposed Settlement. If it does, and after any appeals are resolved, money will be distributed to those who have submitted a Valid Claim Form and have been determined to qualify for a Settlement Class Payment. Please be patient

2 BASIC INFORMATION 1. Why did I get this notice? Fire Insurance Exchange s records indicate that you were insured by Fire Insurance Exchange and suffered a covered property loss that may qualify you to be a Class Member and potentially eligible for a Settlement Class Payment. A Court authorized this notice because you have a right to know about the proposed Settlement of this class action and about all of your options, before the Court decides whether to give final approval of the Settlement. If the Court grants final approval of the Settlement, and after any appeals are resolved, a payment will be made to everyone who submits a Valid Claim Form and is determined to qualify for a Settlement Class Payment. This notice explains the lawsuit, the Settlement, your legal rights, what benefits are available, who may be eligible for them, and how to get them. The lawsuit is referred to as Alexander v. Fire Insurance Exchange, Case No. BC460992, and is pending before Judge Kenneth R. Freeman in the Superior Court of the State of California for the County of Los Angeles. The Court preliminarily approved the Settlement and ordered that this notice be mailed to potential Class Members. 2. What is this lawsuit about? The lawsuit challenges the method that Fire Insurance Exchange uses to determine the actual cash value of lost or damaged property. Plaintiffs allege that Fire Insurance Exchange was required to take depreciation on lost or damaged property based only on the physical condition of the property before it was lost or damaged, and that instead Fire Insurance Exchange took excess depreciation under depreciation schedules based on the age of the lost or damaged property. Plaintiffs also allege that Fire Insurance Exchange improperly applied depreciation to certain structural items they contend are exempt from depreciation altogether. Fire Insurance Exchange denies all allegations of wrongdoing or that any of Plaintiffs claims in the lawsuit have any merit, and contends that it has properly and appropriately applied depreciation based on the condition of the lost or damaged property at the time of loss, its age, and remaining useful life. 3. What is depreciation and how does it affect an insurance claim for property loss or damage? Fire Insurance Exchange pays actual cash value for lost or damaged property covered under a Policy. Fire Insurance Exchange first estimates the full cost to repair or replace lost or damaged property with property of like kind and quality the replacement cost value. It then determines what amount of depreciation, if any, for each lost or damaged property item to apply to the replacement cost value in order to determine actual cash value (the difference between what the lost or damaged property was worth new versus used). Many of the Policies permit an insured to recover the depreciation Fire Insurance Exchange has applied ( recoverable depreciation ), up to the replacement cost value or actual cost to replace, by fully repairing or replacing the lost or damaged property. This suit concerns depreciation amounts applied by Fire Insurance Exchange which were not paid or credited to an insured as recovered depreciation. 4. What is a class action settlement? In a class action, one or more people called class representatives sue on behalf of people or entities who have allegedly similar claims. In this lawsuit, Mark Alexander, Thomas Downie, and Anna Downie are the class representatives. All the people or entities who have allegedly similar claims as the class representatives are, together with the class representatives, a Class and individually known as Class Members. In a class action settlement, one court resolves the issues for all Class Members, except for those who exclude themselves from the Class. The Court did not decide in favor of the class representatives or Fire Insurance Exchange. Instead, both sides agreed to settle. That way, they avoid the cost of a trial and potentially an appeal, and the people or entities who qualify will get compensation. The class representatives and their attorneys (known as Class Counsel ) believe that the proposed Settlement is best for all Class Members. The proposed Settlement does not mean that Fire Insurance Exchange did anything wrong. WHO IS IN THE SETTLEMENT? To see if you are eligible for benefits from this proposed Settlement, you first have to determine if you are a Settlement Class Member. 5. How do I know if I am part of the Settlement Class covered by the proposed Settlement? You are part of the Settlement Class covered by the proposed Settlement if: You are or were an Insured on a Policy; You suffered a loss of or damage to contents and/or structure which was covered under a Policy; You submitted an Insurance Claim to Fire Insurance Exchange for such loss or damage; You received at least one actual cash value property loss payment on that Insurance Claim on or after May 6, 2010 and Fire Insurance Exchange applied depreciation in determining the actual cash value of lost or damaged property in connection with that Insurance Claim; Your Insurance Claim had all Claims Units closed as of March 31, 2015; and Your Insurance Claim includes at least one Eligible Claims Unit. Claims Unit means either (a) a contents or (b) a structure claims unit (structure claims units include any flooring unit) as reflected in Fire Insurance Exchange s claims file for an Insurance Claim. Your Insurance Claim may have only one type of Claims Unit or both

3 Eligible Claims Unit means any Claims Unit except and excluding: (a) a Claims Unit for which payments made by Fire Insurance Exchange were equal to or exceeded all applicable limits or sub-limits in the applicable Policy; (b) a Claims Unit with no Net Outstanding Depreciation ; (c) a structure Claims Unit with a total loss paid on a fair market value basis; or (d) a contents Claims Unit in which an insured making an Insurance Claim submitted information on the MyPropertyLoss.com Website, on or after November 1, 2012, about lost or damaged contents items. Net Outstanding Depreciation means, separately for each Claims Unit, the amount of total replacement cost estimated by Fire Insurance Exchange minus the total of (a) applied deductible, (b) paid actual cash value and (c) paid recoverable depreciation. 6. Are there exceptions to being included in the Settlement Class? Yes. The Settlement Class excludes: (a) insureds who previously signed a written release of all claims in connection with their Insurance Claim; (b) insureds who resolved their Insurance Claim through a prior appraisal; (c) insureds who make a timely election to be excluded from the Settlement Class (see the EXCLUDING YOURSELF FROM THE SETTLEMENT section below); and (d) the neutral Referee, Class Counsel and their spouses or relatives who reside in their household, Fire Insurance Exchange s Counsel, and their spouses or relatives who reside in their household and any present or former members of the board of governors and/or officers of Fire Insurance Exchange. 7. What if I have further questions about whether I am included? Refer to the Settlement Website, viewable at or call the toll-free number if you are not sure whether you are included in the Settlement Class. You can also contact Class Counsel at the address listed in the response to paragraph 17 below. Please do not contact the Court or Fire Insurance Exchange with questions. 8. What does the proposed Settlement provide to Settlement Class Members? The Settlement will compensate eligible Class Members for a portion of the Net Outstanding Depreciation on their Insurance Claim. All settlement payments are subject to the terms of the Class Action Settlement Agreement and applicable Policy limits and sub-limits. The Class Action Settlement Agreement can be viewed at and has all of the details. 9. How do I qualify for a Settlement Class Payment? To qualify for a Settlement Class Payment, you must be a Class Member and complete and submit a Valid Claim Form for each Insurance Claim for which you wish to request a payment. For your convenience, a Claim Form has been provided with this notice. The enclosed Claim Form reflects the Insurance Claim number from Fire Insurance Exchange s records for an Insurance Claim that may qualify you to be a Class Member. You may receive more than one notice if Fire Insurance Exchange s records indicate you have more than one Insurance Claim that may qualify you to be a Class Member. A separate Valid Claim Form must be submitted for each Insurance claim on which you seek a Settlement Class Payment. Additional blank claim forms can be obtained at In order for a Claim Form to be a Valid Claim Form it must be completed to the best of your ability, signed and dated in the space provided for your signature, and mailed First Class U.S. Mail with a postmark not later than February 12, 2016: to FIRE Settlement Claims, P.O. Box 2280, Faribault, MN See the enclosed Claim Form for more details. A submitted Claim Form will be reviewed by the class action settlement administrator, Rust Consulting, Inc. ( Rust ), to determine if it is a Valid Claim Form. Rust will provide Fire Insurance Exchange with all Valid Claim Forms ( Settlement Class Claims ). Fire Insurance Exchange will then evaluate each Settlement Class Claim to determine if the claimant qualifies as a Class Member as defined in the Class Action Settlement Agreement. If the claimant qualifies as a Class Member, Fire Insurance Exchange will calculate the amount of the Settlement Class Payment, if any, payable to the claimant. Fire Insurance Exchange will make these determinations based on all relevant documents and information, as of the date of its review, contained in the claim file for the Insurance Claim to which the Valid Claim Form relates, relevant Policy documents, and/or other documents and information it maintains as a business record which is otherwise relevant to a Settlement Class Claim. 10. How much will payments be? If Fire Insurance Exchange determines you are a Class Member and entitled to a Settlement Class Payment you will receive 12.5% of the Net Outstanding Depreciation for each Eligible Claims Unit in your Insurance Claim, subject to and limited by all applicable limits and sub-limits of the Policy. A Settlement Class Payment will reduce the amount of recoverable depreciation that you may be entitled to under the Policy, if any, on the applicable Insurance Claim. 11. When will I find out whether I am eligible and receive any payment that Fire Insurance Exchange has determined is due under the Settlement? If you submit a Claim Form, you will receive a written Notice of Determination. If you have submitted multiple Claim Forms, you will receive a separate Notice of Determination for each Claim Form. If your Claim Form was determined not to be a Valid Claim Form, the Notice of Determination will state the reason(s)

4 If your Claim Form was determined to be a Valid Claim Form, the Notice of Determination will state whether or not you qualify as a Class Member and the amount of Settlement Class Payment, if any. If you are entitled to a Settlement Class Payment, it will be included with your Notice of Determination. Notices of Determination and Settlement Class Payments will be mailed after the Court grants final approval of the proposed Settlement, any appeals are resolved, and the claims administration process is completed. If you submit a Claim Form it is your responsibility to ensure the settlement administrator, Rust, has your current address to ensure receipt of your Notice of Determination and any Settlement Class Payment that you are entitled to. There is a space on the Claim Form to request that future correspondence concerning the Settlement be sent to an address other than the address that this notice was mailed to. If you move before you receive a Notice of Determination you must notify Rust in writing providing your full name, new address, telephone number, and Insurance Claim number mailed to: FIRE Settlement Claims, P.O. Box 2280, Faribault, MN If the Court grants final approval of the proposed Settlement at or after a Final Approval Hearing on January 13, 2016 (see THE COURT S FINAL APPROVAL HEARING section below), there may be appeals and resolving them can take time. Please be patient. 12. What if I disagree with the decision about my eligibility or the amount of my payment? If you submit a Claim Form and you receive a Notice of Determination (a) that your Claim Form was not a Valid Claim Form, or (b) you are not an eligible Class Member, or (c) that your payment under the Settlement is less than you believe is owed you, you have the right to appeal the decision by submitting an Objection to Determination. An Objection to Determination must be made timely, be in writing, include a statement providing all reasons and facts supporting your contention that the Notice of Determination is incorrect, and include any documents supporting your appeal. If the parties cannot informally resolve the Objection to Determination, a neutral Referee will do so. Please see the Class Action Settlement Agreement for full details at What am I giving up to get a payment or to stay in the Settlement Class? Unless you exclude yourself, you are staying in the Settlement Class whether or not you submit a Claim Form, and that means you can t sue or continue to sue Fire Insurance Exchange, over the claims settled in this lawsuit. It also means that all of the Court s orders will apply to you and legally bind you. If the Court grants final approval of the Settlement, Class Members (including you if you are one) will be releasing Fire Insurance Exchange from all claims arising from or relating to any acts or omissions which have been asserted or which could have been asserted in the lawsuit, to full extent provided in Section XVII of the Class Action Settlement Agreement. Please see the Class Action Settlement Agreement, at for full details on the claims, persons, and entities that will be released. EXCLUDING YOURSELF FROM THE SETTLEMENT If you are eligible to be a Class Member and you want to keep the right to sue Fire Insurance Exchange about the issues in this lawsuit, then you must take steps to get out of the Settlement Class. This is called excluding yourself from which is sometimes referred to as opting out of the Settlement Class. If you want to preserve a right to pursue an independent legal remedy against Fire Insurance Exchange, you must exclude yourself from this Settlement by following the procedures described below. 14. How do I get out of the Settlement? If you are eligible to be a Class Member and you want to exclude yourself from the Settlement, you must send a letter by mail stating that you want to be excluded from the Settlement Class in Alexander. You must include the case number (BC460992), your full name, address, telephone number, Insurance Claim number and signature. You must mail this letter First Class U.S. Mail to the following address, postmarked on or before November 24, 2015: FIRE Settlement Claims, P.O. Box 2280, Faribault, MN You cannot exclude yourself from the Settlement on the telephone, by , or at the Settlement Website, If I don t exclude myself, can I sue Fire Insurance Exchange for the same thing later? No. Unless you exclude yourself following the procedures described above, you give up any right to sue, or be a part of any other lawsuit against Fire Insurance Exchange for the claims that this Settlement resolves, ever again. Remember, the deadline to mail your request for exclusion is November 24, If I exclude myself, can I get a payment from this Settlement? No. THE LAWYERS REPRESENTING YOU 17. Do I have a lawyer in this lawsuit? The Court appointed Kerr & Wagstaffe LLP of San Francisco, California to represent Class Members as Class Counsel. You do not have to personally pay Class Counsel. If you want to be represented by your own lawyer, and have that lawyer appear in court for you in this lawsuit, you may hire one at your own expense. If you have questions about the Settlement - 4 -

5 or anything contained in this notice, you can contact Class Counsel in writing at the following address: Michael von Loewenfeldt, Kerr & Wagstaffe LLP, 101 Mission Street, 18th Floor, San Francisco, CA How will the lawyers be paid? Class Counsel will ask the Court to award up to $900,000 to cover attorneys fees and up to $25,000 for expenses. Class Counsel will also request the Court to approve Incentive Payments to the Class Representatives, Mark Alexander, Thomas Downie and Anna Downie, for the work done on behalf of the Class. The Court will determine the amount of the Incentive Payments based on the service provided to the Class by the Class Representatives, but the parties have agreed that the Incentive Payments will not exceed $6,000 for Mark Alexander individually and $6,000 for Thomas Downey and Anna Downey jointly. Fire Insurance Exchange has agreed not to oppose in the Court Class Counsel s request for Class Counsel s fees and expenses up to the amounts described above, or the Incentive Payments up to the amounts described above. The Court may award less than these amounts. Fire Insurance Exchange has agreed to pay the amount the Court awards for Class Counsel s attorneys fees and expenses, and Class Representative Incentive Payments, up to the maximum amounts described above. Fire Insurance Exchange has also agreed to pay the costs of Rust, the class action settlement administrator, to administer the Settlement. Rust s administration costs are estimated to be approximately $158,000. These payments to Class Counsel, the Class Representatives, and Rust will not reduce the amount distributed to eligible Class Members entitled to Settlement Class Payments. OBJECTING TO THE SETTLEMENT If you are eligible to be a Class Member and you do not exclude yourself, you can tell the Court if you don t agree with the Settlement or some part of it, or you can seek to intervene in the lawsuit. 19. How do I tell the Court if I don t agree with the Settlement? If you are eligible to be a Class Member and you do not exclude yourself, you can object to any part of the Settlement, ask the Court not to approve the Settlement, ask the Court to modify a portion of the Settlement or request to intervene in the lawsuit for the purpose of contesting the Settlement. To do so, you must send a written objection or request to intervene by mail stating that you object to the Settlement in Alexander. Any notice of intent to object or request to intervene must contain: (a) a heading which refers to the lawsuit; (b) your name, address, telephone number and signature; (c) a statement whether you intend to appear at the Settlement Final Approval hearing in person or through counsel, and if through counsel, identifying counsel by name, address and telephone number; (d) a statement of the specific legal and factual basis for intervention and/or each and every objection, and if through counsel, a legal memorandum in support of the objection(s) or intervention; (e) a list of any witnesses, along with the expected testimony of each such witness and photocopies of exhibits which you intend to seek to introduce into the record at the Settlement Final Approval Hearing; (f ) a statement that you have reviewed the Settlement Class definition and have a good faith belief that you are a Class Member; and (g) a list of all objections submitted by you or your counsel, if any, to any class action settlement submitted in any court in the United States in the previous five years, or alternatively an affirmation that you and your counsel, if any, have not objected to any other class action settlement in the United States in the previous five years. You must mail your written objection or request to intervene by First Class U.S. Mail to the following address, postmarked on or before November 24, 2015: FIRE Settlement Claims, P.O. Box 2280, Faribault, MN You cannot object to the Settlement or request to intervene on the telephone, by , or at the Settlement Website, If you do not submit a timely written objection or request to intervene, you waive the right to do so in the future and will be forever barred from intervening or making any objection to the Settlement or appealing a Final Order and Judgment in the lawsuit. If you object to the Settlement or seek to intervene in the lawsuit for the purpose of contesting the Settlement, you must still submit a Valid Claim Form in order to be eligible to receive a Settlement Class Payment. Objecting or seeking to intervene shall under no circumstances constitute the submission of a Claim Form. 20. What s the difference between objecting and excluding yourself? Objecting is simply telling the Court that you don t like something about the Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class. If you exclude yourself, you have no basis to object because the lawsuit no longer affects you. If you do not exclude yourself from the Settlement Class, and object to the Settlement, you still will be a member of the Settlement Class. If you object and the Court grants final approval of the Settlement over your objection, you will not have another opportunity to exclude yourself and you will be bound by the Settlement. THE COURT S FINAL APPROVAL HEARING The Court will hold a Final Approval Hearing to decide whether to grant final approval of the Settlement. You may attend and you may ask to speak, but you do not have to. 21. When and where will the Court decide whether to grant final approval of the Settlement? The Court has scheduled a Final Approval Hearing at: 11 a.m. on January 13, 2016, at the Superior Court of the State of California, County of Los Angeles, Central Civil West Courthouse, 600 South Commonwealth Avenue, Los Angeles, CA 90005, in Department 310, before the Honorable Kenneth R. Freeman. The Final Approval Hearing may be moved to a - 5 -

6 different date, time, or location without additional notice, so it is a good idea to check with Class Counsel or the Court s website, (on website, insert case no. BC into SEARCH BY CASE NUMBER box on Civil Case Calendar page located in Online Services tab), to confirm the Final Approval Hearing date and location if you plan to attend. At this hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court may listen to people who have asked to speak about an objection. The Court may also decide how much to award Class Counsel as fees and expenses for representing the Settlement Class and whether and how much in Incentive Payments to award the Class Representatives for representing the Settlement Class. At or after the Final Approval Hearing, the Court will decide whether to grant final approval of the Settlement. It is not known how long this decision will take. 22. Do I have to come to the hearing? No. If you are a member of the Settlement Class, Class Counsel will represent you and will answer any questions that the Court may have. You are not required to attend the hearing. If you wish, you are welcome to come to the hearing at your expense. If you submitted an objection or request to intervene, you do not have to come to Court to talk about it. As long as you submitted your objection or request to intervene on time, the Court will consider it, but Class Counsel will not argue it on your behalf. You may also pay your own lawyer to attend the hearing, but it is not necessary. 23. May I speak at the hearing? If you submitted an objection to the Settlement or request to intervene in the lawsuit, you may ask the Court for permission to speak at the Final Approval Hearing. You cannot speak at the Settlement Final Approval hearing if you exclude yourself. IF YOU DO NOTHING 24. What happens if I do nothing at all? If you are a Settlement Class Member and do nothing, you will receive no payment from this Settlement. And, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Fire Insurance Exchange for the claims released in the Settlement, ever again. GETTING MORE INFORMATION 25. How do I get more information about the Settlement? This notice summarizes the proposed Settlement. More details are set forth in a Class Action Settlement Agreement. You can get a copy of the Class Action Settlement Agreement at or by contacting Class Counsel in writing at the following address: Michael von Loewenfeldt, Kerr & Wagstaffe LLP, 101 Mission Street, 18th Floor, San Francisco, CA PLEASE DO NOT CALL OR WRITE TO THE COURT OR FIRE INSURANCE EXCHANGE FOR INFORMATION OR ADVICE ON THE PROPOSED SETTLEMENT. BY ORDER OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - 6 -