Ed. 11/09. E. Agents will not misrepresent pertinent facts or policy provisions relating to the insurance contract.

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1 WHITE PIGEON MUTUAL INSURANCE ASSOCIATION UNDERWRITING RULES CONCEPTS OF UNDERWRITING Underwriting is the ability to take known rules and facts and associate them with a subject to determine if a risk should or should not be written. Underwriting begins with the writing agent. The agent is the first one to see the property. The agent has the first responsibility of committing White Pigeon Mutual on a risk. His/her decision is very important, as a loss could happen before anyone else from the Mutual even sees the risk. That agent's first impression of a risk becomes very important. Even as the agent approaches a risk he/she should look at the overall picture and be aware of many indicators of what type of risk he/she is looking at. Some items which the agent should be aware of are: a. Is the overall housekeeping maintained in a reasonable fashion? b. Is the premises being maintained? c. Are the structures essential to the operation or are they obsolete? d. Even the physical appearance of the prospective insured may indicate his overall attitude. Remember, White Pigeon Mutual not only insures the special characteristics of the buildings and property but the attitudes and management ability of the insured. There are three types of hazards which must be considered when underwriting a risk: PHYSICAL HAZARDS - a material condition which increases the chance of a loss. For Example: Inadequate electrical wiring Improperly installed heating system Improperly maintained chimney or vent. Storage of flammable liquids in buildings. Combustible materials stored adjacent to a heat source. (b) MORAL HAZARD - an individual characteristic of the insurethat increases the probability of loss. For Example: Could the insured profit by loss? Are there marital problems? Excessive drinking? Dishonesty - would the insured set a fire? MORALE HAZARD -an individual characteristic which would indicate the insured would not prevent or reduce the chance of a loss. A basic indifference to loss because of insurance. For Example: Leaving trash piled around. The indifference to reducing physical hazards. Lack of pride in maintaining structures or personal property. Will not intentionally set fire but will do nothing to prevent fires. By using all the indicators and information the agent collects when he/ she visits the property and associating it with his/her good judgement, he/she must arrive at a decision. Do we insure or do we not insure? This is the process of underwriting. Underwriting has a significant effect on the rates which the White Pigeon Mutual must charge. Improper underwriting cannot be rated effectively and will produce a devastating reduction in the assets of the Mutual. Growth in production should be only on business which will improve the Mutual's overall book of business. This type of risk tends to reduce loss ratios and improve the Mutual's overall financial situation. The Mutual's survival is directly linked to the type of underwriting decisions each agent makes each time he/she writes a policy. GENERAL UNDERWRITING RULES A. According to State Statute, White Pigeon Mutual is restricted to the following rules: (1) Farm property, including residences and other farm buildings and all classes of personal property in connection therewith. (2) Buildings & personal property used in the processing of agricultural products in conjunction with a farming operation. (3) Town, city & suburban residences including household & personal effects. (4) Churches, schools & community buildings. (5) Property located in Muscatine, Cedar, Scott, Johnson & Louisa Counties. B. The following property is not eligible for County Mutual coverages: (1) Commercial risks (2) Fur-bearing animals & turkeys (3) Dilapidated and poorly constructed buildings (4) Windmills & unanchored single cribs & grain bins (5) Aircraft, travel & camping trailers, camper bodies, snowmobiles, and all motor vehicles subject to motor vehicle registration laws. C. Policy minimums: (1) Minimum premium per policy $25.00 (2) $4,000 policy minimum on household & personal property coverage (3) $1,000 policy minimum on submersible pumps (each) (4) $1,000 policy minimum on outside wiring (5) 20,000 policy minimum on farm blanket D. Agents will comply with all the underwriting rules as established by the Board of Directors of White Pigeon Mutual.

2 E. Agents will not misrepresent pertinent facts or policy provisions relating to the insurance contract. F. All applications and endorsements shall be completely and correctly filled out using the correct forms by the agent and signed by the applicant or his representative. G. All applications, changes of coverage and other forms will immediately be forwarded to White Pigeon Mutual's home office by either hand delivering or by first class mail. H. If the agent has a current inspection report on the buildings at the time of writing or renewing the policy, the inspector's recommendations concerning their insurability shall be adhered to by the agent. I. Dwellings which are vacant beyond a period of 60 consecutive days must have a vacancy permit attached to the policy for the dwelling to be covered. J. No vacant, unoccupied premises or seasonal dwellings including structures thereon may be accepted unless this association has all other eligible property of the insured and a mandatory $250 deductible is required. K. No coverage of household and personal property will be accepted or continued in vacant dwellings. L. Submersible pumps are excluded from coverage under "outside wiring & equipment" and must be specifically insured to be covered. M. Coverage for borrowed farm machinery is now provided under the terms of our farm policy if these items are specifically listed on the face of the policy. This will be an excess coverage over any insurance the owner of the machine has. Borrowed machinery will be charged at the specific farm personal property rate with a minimum premium for each item equal to 25% of what the annual premium for that item would have been. N. Qualifying earth sheltered homes may receive a discounted premium based on their construction. Each dwelling shall be evaluated individually by our inspector to determine how much if any discount can be applied. In order to qualify for the maximum discount, the exterior walls should be masonry and more than two-thirds earth covered; and the roof and floor must be made of incombustible material. O. Guidelines (1) DIRECT BILL: All premiums written by the agent shall be billed direct from the office, with the exception of the initial premium, this premium is to be collected by the agent and remitted to the office with the application. (2) AGENT ACCOUNTS: The agent shall receive from the office a copy of all policies due for renewal within that agency at least 30 days in advance of the renewal date. The revised declarations sheet shall be returned to the office. (3) POLICY RENEWALS: When the agent receives the Renewal Declaration Sheet, review the coverages with the insured. Cross out any item(s) not to be insured, write in any new item(s), giving all pertinent information (i.e. dimensions, roof ages, models, etc.). Verify address, mortgagee, phone number, locations, deductible options, and policy billing options, etc. Verify current endorsement numbers, delete endorsement not needed, add any new endorsement numbers required. Obtain insureds signature if at all possible. Explain inspectors recommendations to insureds and make applicable changes. If policy requires endorsements that require a signed application for the endorsement, submit a signed endorsement application. Work will be returned for signature. (4) APPLICATIONS: NEW MEMBER - NEW POLICY Decline coverage if you know the applicant has had serious problems with his previous carrier. Applications on persons currently in Bankruptcy proceedings should not be taken. Application cannot be bound unless the agent or our inspectors have physically seen the property. All new property written will be inspected. Please note on new applications if there is a solid fuel burning appliance of any kind. Applications must have signed Claims History Authorization form attached. (5) CHANGE OF COVERAGE Changes indicating deletion of coverage will not be accepted without a signed application for the change. If adding an endorsement specify endorsement number, if endorsement requires a signed application please obtain signature on appropriate application. Change will be returned if signature is not provided. Changes that develop a return premium, the premium will be on a pro-rata basis. Request to cancel a policy will generate a short-rate premium on non-homeguard policies, unless the policy is rewritten by the same insured. Changes in the farm blanket must reflect items that are being added or deleted. If a request is made to change policy type, (i.e. Dwelling policy to Homeguard) cancel the old policy and rewrite. This is necessary when the change will require a policy of a different policy type. Back dating a request for a partial cancellation to increase premium refund will not be tolerated.

3 (6) CLAIMS: From time to time a claim in your agency may arise, please follow the prescribed procedures in handling claims. Complete an ACORD loss notice and forward it to the office for processing. Details involving the claim should be as explicit as the Agent can make them. This detail affects the method in which the claim is handled. Make a Dollar estimate of the damage as realistic as possible. DO NOT speculate with the insured as to how the adjustor will handle the claim, how much will be paid, etc. On death of livestock advise insured to have the animal posted by a DVM of his choice as soon as possible, advise on loss notice which DVM is being used. If the claim is of an emergency nature, please call in claim to office immediately. The adjustor will advise you on any necessary proceedings needed. Follow your call with a written loss notice. If there are further questions concerning claims, please refer to the Claims Manual. UNDERWRITING RULES FOR REAL ESTATE & PERSONAL PROPERTY A. Real Estate (1) All property will be fully and accurately described by the agent. Accurate measurements are necessary to value a building properly. Agents will measure all buildings and complete all blanks on the application form for the appropriate class of property. (b) Dwelling estimate worksheets will accompany each application for Home Guard and Select Custom Farm Dwelling policies. (2) All property will be valued by the agent. B. Personal Property Replacement Cost for underwriting purposes will be determined by the most current edition of the Dwelling Replacement Cost Estimator (Form RC 108). (1) Personal property, if contained in a structure, must be contained in an eligible structure, before the agent should consider writing. (2) All personal property must be written at 100% of Actual Cash Value. C. Special Classes of Property. (1) CUSTOM FARM DWELLING POLICY WITH REPLACEMENT COST. Must be owner occupied or occupied by a son or daughter of the owner. (b) Must be of superior quality construction and contain: (1) A sound continuous masonry or concrete foundation under all exterior walls (rock foundations are not acceptable). (2) A roof in excellent condition. (3) An approved and tested heating and venting (4) An approved and adequate electrical Must be insured to at least 80% of Replacement Cost, but not lessthan $70,000. (d) Dwellings insured for over $60,000 qualify for 75% personal property coverage. Dwellings over $250,000 will receive 60% for personal property and 10% for Additional Living. (2) CUSTOM FARM DWELLING POLICY W/O REPLACEMENT COST. (b) Dwelling must be owner-occupied or occupied by a son or daughter of the owner. Must be of above average quality construction and contain: (1) A sound continuous masonry or concrete foundation under all exterior walls (rock foundations are not acceptable.) (2) An approved and tested heating and venting (3) An approved and adequate electrical Must be insured to at least 50% of Replacement Cost. (d) Dwellings insured for over $50,000 qualify for 75% personal property coverage. Dwellings over $250,000 will receive 60% for personal property and 10% for Additional Living. (3) HOME GUARD Policy. (b) Dwelling must be owner-occupied. Must be above average condition, quality construction and contain: (1) A sound continuous masonry or concrete foundation under all exterior walls (rock foundations are not acceptable). (2) An approved and tested heating and venting (3) An approved and adequate electrical

4 Must be insured to at least 70% of replacement cost. (d) Dwellings insured for over $60,000 qualify for 75% personal property coverage. (3) An approved heating (Woodburning heating systems will not be acceptable.) (4) Insure at Actual Cash Value. (7) FARM BLANKET PERSONAL PROPERTY. (f) Dwellings over $250,000 will receive 60% for personal property and 10% for Additional Living and Other Structures coverages. To qualify for the Additional Coverage Endorsement the dwelling must be insured for at least $70,000. A completed Farm Personal Property Schedule (RC 41 I) must accompany all blanket applications. (b) The coinsurance clause will be explained by the agent and the inventory form signed by the insured or a legal representative. (4) DWELLING, RENTED DWELLING, FARM DWELLING Policies. (b) Dwelling must be occupied. Must be of average quality construction and contain: (1) A sound continuous foundation under all exterior walls. (2) An approved and tested heating and venting (3) An approved and adequate electrical Must be insured to at least 50% of Replacement Cost. (d) Rented Dwellings must have a mandatory $500 deductible and supporting insurance. Broad Form available on dwellings over $50,000. (5) FARM OUTBUILDINGS OR STRUCTURES. White Pigeon Mutual will not accept policies insuring only outbuildings. This Association must also have either the dwelling and/or the individual's farm personal property in order to insure his outbuildings. (b) Farm outbuildings must be used in the farming operation or have a Rebuilding Endorsement (RC 306) put on it if it is vacant, unoccupied, obsolete or used only for casual storage. Dwellings used for storage must be insured as dwellings and include a Vacancy Permit and a rebuilding endorsement. (d) Must be used for its intended use or be adequately reconstructed to withstand its new use. Minimum premium on buildings insured for less that $3,400 is $25. (6) MOBILE HOME ENDORSEMENT Must be anchored with an approved anchoring (b) Mobile homes must have the following: (1) Permanent water, sewer, fuel and power hookups. (2) Adequate skirting. The inventory must be taken and include all items of farm personal property at Actual Cash Value. (1) Livestock will include the total units the insured expects to produce and have on hand at any one time during the year. (2) Hay, straw, silage and farm produce will include the total value the insured expects to produce and have on hand at any one time during the year. (3) Farm supplies will include the maximum value the insured expects to have on hand at any one time. (4) Machinery will include all machines, implements, small equipment, feeders, waterers, hand tools, shop tools, motors and other equipment which the insured would expect to have on hand at any one time during the year. (d) The Farm Blanket should be written at no less than 90% and preferably 100%. Minimum amount for farm blanket shall be $20,000. (f) All locations of where any of the property will be housed will be named on the location section of the declarations page of this policy. (g) No irrigation equipment will be written under the Farm Personal Property Blanket. (h) Farm Blanket Machinery used for custom farming must be placed on the Comprehensive Machinery Endorsement if receipts are over $2,000 per year. (i) The following property is not eligible for blanket coverage: (1) Buildings of any type (including portable buildings, range shelters, etc.) (2) Self-feeders over 375 bushel capacity. (3) Vehicles/Trailers licensed for road use. (8) FARM PERSONAL PROPERTY - SPECIFIED Livestock amounts may exceed the maximum limit per head on blankets by special permission. (b) If an amount is indicated for Specified Machinery the machine or implement will be fully described by make, model and serial number (if possible). Permanently installed equipment does not qualify for coverage.

5 AVAILABLE PROPERTY ENDORSEMENTS This is a listing of the White Pigeon Mutual available endorsements. A detailed description of these endorsements can be found on the Grinnell Mutual Website (gmrc.com under Forms & Manuals). If you see an endorsement on the website that is not listed below, please contact our office. RC 42 RC 42 RC 54 RC 56 RC 59 RC 64 RC 69 RC 77 RC 84 RC 85 RC 86 HG 86 RC 87 HG 90 RC 90 RC 91 RC 93 RC 95 RC 96 HG 97 RC 97 RC 98 RC 99 WPM 100 HG 105 HG 106 RC 106 RC 107 HG 107 HG 117 HG 119 HG 129 WP 129 HG 133 RC 133 RC 135 RC 135 RC 136 HG 136 RC 137 WP 139 HG 141 RC 141 RC 149 HG 149 RC 149 WPM 200 HG 211 RC 272 Comprehensive Machinery (Scheduled) Special Livestock Custom Farm Dwelling Comprehensive Machinery Dwelling Policy Glass Breakage (Farm Machinery) Livestock Ensorsement (Blizzard) Extended Theft Extra Expense Coverage Peak Season Refrigerated Products Refrigerated Products Scheduled Leased or Rented Farm Machinery Replacement Cost (Contents) Contents Replacement Cost Livestock Suffocation Loss of Farm Earnings Comprehensive Machinery (Blanket) Farm Service Building Additional Coverage Total Loss Total Loss Outside Storage Enorsement - Windstrom & Hail Dwelling Special Coverage Sewer or Drain Coverage Other Structures Special Coverage Additional Coverage Additional Coverage Dwelling Replacement Cost Dwelling Replacement Cost Mobile Home Mobile Home Theft of Building Material Theft of Building Material Deletion of Theft Coverage Deletion of Theft Coverage Weight of Ice and Snow Weight of Ice, Snow or Sleet Earthquake Extension Earthquake Extension Collision and Overturn Theft of Building Material Special Property (Inland Marine) Special Property (Inland Marine) Unit Owners Coverage (Condo) Condominium Unit Owners Loss Assessment - Condo Outbuilding Endorsement Loss Payable Clause Steel Silo RC 279 HG 280 HG 282 RC 286 WPM 300 HG 306 RC 306 RC 307 WPM 307 RC 310 HG 319 RC 319 RC 322 HG 333 RC 353 RC 367 RC 375 HG 380 HG 397 RC 412 UNDERWRITING RULES FOR ENDORSEMENTS AND MISC. ITEMS RC 56 RC83 RC84 RC85 RC86 Deductible Endorsement Special Endorsement Standard Mortgage Clause Pollution Clean Up and Removal Coverage Limits on Unscheduled Lawn Equipment Rebuilding Rebuilding Roofing Roofing and Siding Endorsement Vacancy or Unoccupancy Water Backup Drain Coverage Water Backup Drain Coverage Limited Roofing Outbuilding Endorsement Fungi & Bacteria Perishable Farm Personal Property Additional Insured - Property Coverage Loss Assessment (Unit Owners) Coverage Limitation For Unoccupied Dwelling Broad Form Comprehensive Machinery Endorsement (Scheduled) - This endorsement provides Comprehensive Machinery coverage for a scheduled piece of machinery. Machinery must be written for the full Actual Cash Value of the machine it is covering. The machine is removed from the blanket inventory when covered under this endorsement. Farm Operations Records Endorsement - Custom Farm Dwelling packages include $250 coverage for loss of farm operations records from an insured peril. To increase this amount or add this coverage to farm policies not providing it, use this endorsement. Charges will be the same as the regular farm outbuilding rate. Extra Expense Coverage - This endoresement provides coverage for extra (increased) expenses incurred during the period of restoration, following a covered loss, to resume or continue normal farming operations. The minimum coverage available is $5,000. Premium rate per thousand will be the same as the regular farm outbuilding rate. Peak Season Endorsement - This endorsement can be used to cover farm personal property, (either blanket or specific), that the insured will have on hand for only a short period of time. The minimum amount of time this endorsement can be written for is one month, and the maximum time of coverage will be six months. Premiums are earned (no refund). It will provide the increased coverage each year the policy is in force for the dates originally selected. Refrigerated Products Endorsement - Custom Farm policies include $1,000 coverage for loss to refrigerated household personal property located on the premises and caused by interruption of electrical service to or mechanical or electrical breakdown of a refrigeration The coverage is not available for farm personal property. By use of this endorsement, additional refrigerated products coverage may be added to the policy. Note: The Home Guard no longer offers this coverage. The HG 86 has been added to all Home Guard policies for $1,000 coverage.

6 RC87 RC90 RC91 RC 93 RC 95 Leased or Rented Farm Machinery Endorsement - Leased or rented farm items should be written separate from the policy. The endorsement should be written for the length of the lease or rental agreement and charged at the specific farm personal property rate. Agents are cautioned to check the lease or rental agreement to see if inland marine coverage is called for. If so, the Comprehensive Machinery Endorsement should be added on. A copy of the lease or rental agreement must accompany the application. Household Personal Property Replacement Cost Endorsement - With this endorsement, covered losses to household personal property will be adjusted on a replacement cost rather than an actual cash value basis, (subject to certain limitations). If both the dwelling and contents are insured, the policy must meet the following condition: 1. The dwelling must be insured for at least $60,000. This endorsement is also available for Custom Farm and Home- Guard policies insuring only household personal property. The following conditions must be met on those policies: 1. The household personal property must be insured for at least $10,000. The Endorsement for HomeGuard is HG 90. Limited Suffocation Endorsement - With this endorsement livestock in a confinement building can be insured against suffocation caused by electrical interruption or mechanical breakdown. This Coverage may not be bound by Agents until an inspection by Grinnell Mutual engineers has been completed. The deductible is $1,000 or the policy deductible, whichever is greater, and applies separately to each location on a per occurrence basis. Coverage will not be considered unless building has alarm system and back-up generators. Loss of Farm Earnings- Provides coverage for loss of farm earnings during the period of restoration due to the interruption of the insured s farming operation. Coverage is limited to 25% of the limit of insurance stated in the endorsement, or in the Declarations, for each consecutive 30 day period, not to exceed the limit of insurance for this coverage. The interruption must be caused by a covered peril which causes direct physical damage to property used in the insured s farming operation which, as defined in the endorsement, includes: 1. Farm implement(s); or 2. Building(s), including machinery, equipment or supplies located inside the building. The period of restoration begins immediately after the property is damaged and ends on the earliest of the following dates: 1. Date property should be repaired, rebuilt or replaced with reasonable speed and quality; 2. Date operations are resumed; or 3. Twelve months from the date of loss. Comprehensive Machinery Endorsement (Blanket) -The purpose of this endorsement is to provide our larger, more careful farm operator with Comprehensive Machinery coverage for all of his machinery and equipment on a blanket basis. The endorsement will be available only to policyholders with a farm blanket coverage of at least $40,000; and whose past loss history is good. The endorsement is subject to a minimum $250 deductible, (unless the policy deductible is higher). RC 107 Replacement Cost (Farm Outbuildings)- This Amends the basic policy to provide replacement cost coverage for buildings specifically identified in the Declarations. This endorsement carried an 80% replacement cost coinsurance requirement. RC306 Rebuilding Endorsement - With this endorsement, in case of loss to any building covered under the policy, any payment due in excess of 40% of the amount of insurance on the building specified will be withheld from the initial payment. Upon completion of repairs or replacement of the building, the balance remaining due will be paid. This endorsement can be effective in promoting deletion of obsolete or vacant buildings from the policy. The Homeguard form is HG306. RC 307 Restrictive Roofing Endorsement- This endorsement excludes coverage for further windstorm and/or hail damage to the roof of a described building until acceptable repairs are made or the roof is replaced. Agent must get insured's signature. Home Guard endorsement is HG 307. RC 322 Limited Roofing Endorsement- Attached to any new policy or during the policy term if replacement cost coverage applies. No credit will be given for the use of this endorsement. The endorsement may be removed when the insured notifies the mutual that the roof has been replaced and provides documentation of the replacement. This endorsement may be attached to the policy at the time of renewal at the discretion of the underwriter. The endorsement will be attached automatically at the time of a total loss to the roof and shall remain in effect until such time as the roof is replaced. The endorsement must be signed by the named insured at the time it is attached to the policy and at the time of policy renewal. Home Guard Endorsement is HG 322. HG 333 Other Structures Exclusion - This endorsement is to be used to exclude coverage on other structures that do not directly relate to the occupancy of the dwelling on Home Guard policies. (i.e. cribs, barns, grain bins, etc.)

7 To: White Pigeon Mutual Agnets Re: Writing Property Which May be Defined as Commercial Property Whtie Pigeon Mutual Insurance Association is organized under Chapter 518 and is prohibited from writing structures and property which could be construed as business property, with the exception of the small, business property "special limits" found in some of the Grinnell Mutual forms. Our Reinsurance Contract also prohibits Reinsurance Recovery for property losses resulting from the underwriting and acceptance of prohibited properties. Though it is difficult to strictly define "Commercial Property: we hope to provide some examples of acceptable risks as well as some of those which are considered unacceptable. The legal definition (Black's Law) of commercial property is, "Income producing property, (e.g. office buildings, apartments, etc.)" Of course, commercial property does not actually have to show a profit or income, it must simply be designed or used for a commercial purpose. Acceptable risks would include the residence dwelling of an insurance agent who maintains a second office in one room. This may not be acceptable if the agent saw customers at that location because of the increase in hazard concerning the liability exposure. Any residential dwelling with a second office where the insured does not regularly invite business guests would be acceptable. Examples of unacceptable risks would include any structures which house a commercial enterprise such as a bar/restaurant, plumbing shop, or any other service or retail establishment in the structure which is also being used as a dwelling by the insured. The correct way to underwrite such an exposure would be to write a tenant-homeguard (if it qualifies) on the residential portion. Commercial property coverages would have to be obtained from a commercial lines carrier for the entire structure and business property. A common-sense guideline would be that if the property risk of loss is increased in any manner by the presence of a commercial business, the entire structure must be written as a commercial exposure. For example, the plumbing shop mentioned above as an unacceptable homeowner's exposure has the risk significantly increased by the presence of plumbers who may be welding, soldering, using and storing dangerous chemicals, etc. Please ensure that the underwriting documentation supplied to you as agents, contains sufficient information to allow identification of property which should be written commercially. It is the obligation of White Pigeon Mutual Insurance Association to write only property which is legally acceptable under Chapter 518. Violations of Chapter 518 regarding the insuring of prohibited risks will result in an investigation of the circumstances surrounding the underwriting of the property and the claim. If circumstances reveal that the mutual knew or should have known that the property written violates the provisions of Chapter 518 and the Reinsurance Contract, any reinsurance recovery attributable to a loss to the prohibited risk will be denied.