Property and Casualty Insurance (C) Committee

2015 Summer National Meeting Chicago, Illinois Property and Casualty Insurance (C) Committee August 17, 2015 2015 National Association of Insurance Commissioners

Consider Adoption of its May 15 and 4, 2015 Minutes Attachment One 2015 National Association of Insurance Commissioners

Attachment Property and Casualty Insurance (C) Committee 8/17/15 Draft: 7/30/15 Property and Casualty Insurance (C) Committee Conference Call May 15, 2015 The Property and Casualty Insurance (C) Committee met via conference call May 15, 2015. The following Committee members participated: Mike Chaney, Chair (MS); Jim L. Ridling represented by Charles Angell (AL); Tom Donovan (ID); James Stephens and John Gatlin (IL); James J. Donelon represented by Warren Byrd (LA); John G. Franchini represented by Alan Seeley (NM); Raymond G. Farmer (SC); Larry Deiter (SD); and Michael D. Riley (WV). Also participating was: Paula Pallozzi (RI). 1. Adopted Revised Cybersecurity Insurance Coverage Supplement to the Annual Statement Commissioner Chaney said additional comments on the Cybersecurity Insurance Coverage Supplement were received after the Committee s May 4, conference call. Sara Robben (NAIC) explained that a new draft was created that requests identity theft insurance information; removes the ranges of limits for cybersecurity insurance; revises the definition of cybersecurity insurance based on suggestions from American Insurance Association (AIA); and revises the instructions. Lisa Brown (AIA) said she was not sure what was meant by a package policy. Ms. Robben said it refers to any policy with cyber coverage added to it. Ms. Brown also said the definitions still need clarification on how to report identity theft coverage. Ms. Pallozzi suggested separately defining identity theft as a personal line coverage within the instructions. Upon a motion by Director Farmer, seconded by Mr. Angell, the Committee agreed to make the revisions discussed by Ms. Robben and Ms. Pallozzi. Stephen Broadie (Property Casualty Insurers Association of America PCI) expressed concern that the definition of cybersecurity insurance was overly broad and might require companies to include incidental cyber coverage as part of a package policy. Ms. Pallozzi said the definition may be broad because regulators want to collect any cyber risks covered by insurance companies. Director Farmer agreed and said regulators are looking for as much data as they can get. Ms. Brown said the AIA believes some of the data is confidential and they will bring this issue before the Blanks (E) Working Group as that group considers the proposal. Mr. Broadie agreed with potential confidentiality issues and said the cost of providing the data for some companies may exceed the benefits gained. Commissioner Chaney said he is comfortable with what data is being requested, noting that the goal is to get as much data as possible. He said the Blanks (E) Working Group can look into issues related to confidentiality. Eric Nordman (NAIC) said one of the purposes of collecting this data is to inform consumers and the federal government on the size of the cyber insurance market. Mr. Broadie said there is a difference between reporting on the size of the market and making individual company data available. Mr. Nordman said the data is not policyholder-level data, but is similar to market share data that the NAIC releases for other types of coverage. Ms. Pallozzi said she believes the most recent draft is a good compromise, as it removes the range of limits that may be difficult to collect. Commissioner Chaney said the intent of the blanks proposal is to be broad enough to provide good data to regulators and the public. He said the next step would be an exposure period by the Blanks (E) Working Group and a conference call of the Blanks (E) Working Group to be held June 30. Upon a motion by Director Farmer, seconded by Mr. Byrd, the Committee adopted the revised Cybersecurity Insurance Coverage Supplement for submission to the Blanks (E) Working Group. Having no further business, the Property and Casualty Insurance (C) Committee adjourned. W:\National Meetings\2015\Summer\Cmte\C\05-15 Cmin.docx 2015 National Association of Insurance Commissioners 1

Draft: 7/30/15 Attachment Property and Casualty Insurance (C) Committee 8/17/15 Property and Casualty Insurance (C) Committee Conference Call May 4, 2015 The Property and Casualty Insurance (C) Committee met via conference call May 4, 2015. The following Committee members participated: Mike Chaney, Chair (MS); John D. Doak, Vice Chair (OK); Lori K. Wing-Heier (AK); Jim L. Ridling represented by Charles Angell (AL); Katharine L. Wade represented by George Bradner (CT); Kevin M. McCarty represented by David Altmaier (FL); Tom Donovan (ID); James Stephens (IL); James J. Donelon represented by Warren Byrd and Tom Travis (LA); Raymond G. Farmer (SC); and Michael D. Riley (WV). Also participating was: Paula Pallozzi (RI). 1. Adopted its Spring National Meeting Minutes Commissioner Riley made a motion, seconded by Mr. Altmaier, to adopt its March 30 minutes (see NAIC Proceedings Spring 2015, Property and Casualty Insurance (C) Committee March 30, minutes). The motion passed. 2. Adopted the Cybersecurity Insurance Coverage Supplement to the Annual Statement Commissioner Chaney said the proposed draft Cybersecurity Insurance Coverage Supplement and related instructions were revised following discussion of comments at the Spring National Meeting. Commissioner Chaney said the American Insurance Association (AIA) submitted some additional comments (Attachment A). He said there is some discussion amongst regulators about potentially adding disclosure regarding identify theft, but he suggested postponing such discussion. Sara Robben (NAIC) described changes made to the supplement as a result of submitted comments. Angela Gleeson (AIA) said the definition of cybersecurity is broad, and must be to cover the stand-alone policies. But the broad definition causes problems when evaluating a multi-package policy. The AIA believes the Committee should decide the purpose of reporting for solvency assessment or to understand the market. She said the limit ranges are not going to provide helpful information to understanding the most common limits. Mr. Nordman suggested the AIA propose something other than the range. Dave Snyder (Property Casualty Insurers Association of America PCI) said the definition seems to have expanded the scope and types of policies covered. Ms. Robben said the definition was rewritten based upon comments submitted by the AIA. Ms. Pallozzi said the expanded definition comes from the federal government. Paul Tetrault (National Association of Mutual Insurance Companies NAMIC) said some of the information is proprietary and could signal competitive position in the market place, especially for niche writers. Commissioner Chaney said NAMIC might want to address that issue at the Blanks (E) Working Group. Birny Birnbaum (Center for Economic Justice CEJ) said there is no evidence for the assertion that this data should be held confidential. He said the same type of information is available for other types of insurers. He said an option for the range of liabilities would be to request the number of policies by limit grouping. It is more efficient and effective to collect transaction-level data. He said this data could be held confidential. Mr. Travis made a motion, seconded by Director Wing-Heier, to adopt the amended draft supplement for submission to the Blanks (E) Working Group (Attachment B). The motion passed. 3. Appointed the Creditor-Placed Insurance Model Act Review (C) Working Group Commissioner Chaney said the Committee is charged with updating the Creditor-Placed Insurance Model Act (#375). Initially, the Committee was going to review the data call information prior to commencing work. In light of the delay in receipt of that data, Commissioner Chaney asked that work commence with formation of a working group chaired by Mr. Altmaier. It was moved and seconded that the Committee establish a Creditor-Placed Insurance Model Act Review (C) Working Group. The motion passed. 2015 National Association of Insurance Commissioners 1

Attachment Property and Casualty Insurance (C) Committee 8/17/15 4. Discussed the Casualty Actuarial and Statistical (C) Task Force Charges Commissioner Chaney expressed support of the Casualty Actuarial and Statistical (C) Task Force to complete its charge regarding the Society of Actuary s (SOA) new general insurance educational track. Having no further business, the Property and Casualty Insurance (C) Committee adjourned. W:\National Meetings\2015\Spring\Cmte\C\05-4 Cmin.docx 2015 National Association of Insurance Commissioners 2

Consider Adoption of its Task Force and Working Group Reports Attachment Two 2015 National Association of Insurance Commissioners

2015 Summer National Meeting Chicago, Illinois CASUALTY ACTUARIAL AND STATISTICAL (C) TASK FORCE Saturday, August 15, 2015 9:00 10:30 a.m. Meeting Summary Report The Casualty Actuarial and Statistical (C) Task Force met Aug. 15, 2015. During this meeting, the Task Force: 1. Adopted its April 14, May 19, June 2, June 16, June 23, June 30 and July 21minutes, which included: Adoption of a response to the Property and Casualty Insurance (C) Committee regarding the Society of Actuary s General Insurance Actuarial Education Track. 2. Adopted the reports of its Actuarial Opinion (C) Working Group, Appointed Actuary (C) Subgroup, and Statistical Data (C) Working Group. 3. Exposed the draft Price Optimization White Paper and recommendations for a 30-day comment period ending Sept. 8. This paper will aid members decisions about actions to take regarding any use of price optimization by insurers. 4. Heard reports from the American Academy of Actuaries (Academy) regarding the Academy s work to aid appointed actuaries opining on P&C reserves and to enforce actuarial professionalism and adherence to actuarial standards. W:\National Meetings\2015\Summer\Summaries\Final Summaries\CASTF.docx 2015 National Association of Insurance Commissioners 1

Surplus Lines (C) Task Force did not meet at the National Meeting 2015 National Association of Insurance Commissioners

2015 Summer National Meeting Chicago, Illinois TITLE INSURANCE (C) TASK FORCE Sunday, August 16, 2015 4:00 5:00 p.m. Meeting Summary Report The Title Insurance (C) Task Force met Aug. 16, 2015. During this meeting, the Task Force: 1. Adopted its July 30 and May 6 minutes, which included adoption of the Title Insurance Consumer Shopping Tool template and its companion best practices guide, Options for Regulators to Distribute a Title Insurance Consumer Shopping Tool. The Task Force also disbanded the Title Insurance Guaranty Fund (C/E) Working Group and had multiple discussions regarding affiliated business arrangements and updates to the survey of state insurance laws regarding title data and title matters. 2. Adopted the reports of the Title Insurance Financial Reporting (C) Working Group and the Title Insurance Consumer Shopping Tools (C) Working Group. The Title Financial Reporting (C) Working Group submitted a proposal to the Statutory Accounting Principles (E) Working Group to revise language in the quarterly disclosure in SSAP No. 55 Unpaid Claims, Losses and Loss Adjustment Expenses and the title annual statement instructions, Notes to Financial Statements No. 25. This disclosure is currently uniform for all statement types; however, title reporting entities utilize slightly different terminology. The Title Insurance Consumer Shopping Tools (C) Working Group has completed its work on the Title Insurance Consumer Shopping Tool template and its companion best practices guide, Options for Regulators to Distribute a Title Insurance Consumer Shopping Tool and began drafting a shorter title insurance consumer brochure. 3. Heard an update on federal activities. U.S Rep. Keith Ellison proposed H.R. 1799, Ensure Fair Prices in Title Insurance Act, to amend the federal Real Estate Settlement Procedures Act of 1974. The purpose of the bill it to prohibit any referral source such as a realtor, builder or mortgage broker from receiving a financial benefit for referring homebuying clients to a title insurance firm. The bill prescribes that restitution be provided to clients and competitors from firms breaking the law and extends the statute of limitation from one to three years. 4. Discussed affiliated business arrangements (AfBA) including federal requirements, current activities and individual state laws regarding AfBA and made suggestions for how the Task Force can address the issue collectively. 5. Discussed the survey of state insurance laws regarding title data and title matters. A majority of the states have completed the survey. The Task Force agreed to give the remaining jurisdictions two weeks to respond before compiling the results and conducting a conference call to discuss the results. 6. Heard a presentation from the American Land Title Association (ALTA) on its Homebuyer Outreach Program. The Homebuyer Outreach Program was created to protect homebuyers by educating them about the value of purchasing owner s title insurance. W:\National Meetings\2015\Summer\Summaries\Final Summaries\TitleTF.docx 2015 National Association of Insurance Commissioners

Workers Compensation (C) Task Force summary available as a separate handout 2015 National Association of Insurance Commissioners

2015 Summer National Meeting Chicago, Illinois ADVISORY ORGANIZATION EXAMINATION OVERSIGHT (C) WORKING GROUP (Regulator-to-Regulator Session) Saturday, August 15, 2015 10:00 11:30 a.m. Meeting Summary Report The Advisory Organization Examination Oversight (C) Working Group met Aug. 15, 2015. During this meeting, the Working Group: 1. Heard comments from the following Advisory Organization representatives regarding the Comprehensive Annual Audit Form proposed at the Spring National Meeting: Mona Carter (National Council on Compensation Insurance NCCI), Mary Van Sise (Insurance Services Office ISO), Susan Miller and Randi Cigelnik (Independent Statistical Service ISS), Lenore Marema (Surety & Fidelity Association of America SFAA), Robin Westcott (American Association of Insurance Services AAIS). 2. Received a status update on the National Crop Insurance Services (NCIS) Exam. 3. Received a status update on the Auto Insurance Plans Service Office (AIPSO) Exam. 4. Received a status update on the National Independent Statistical Service (NISS) Exam. 5. Discussed plans for the 2016 National Council on Compensation Insurance (NCCI) Exam. W:\National Meetings\2015\Summer\Summaries\AOEOWG 2015 National Association of Insurance Commissioners 1

Affordable Care Act Medical Professional Liability (C) Working Group did not meet at the National Meeting 2015 National Association of Insurance Commissioners

2015 Summer National Meeting Chicago, Illinois AUTO INSURANCE (C/D) STUDY GROUP Saturday, August 15, 2015 3:00 4:00 p.m. Meeting Summary Report The Auto Insurance (C/D) Study Group met Aug. 15, 2015. During this meeting, the Study Group: 1. Adopted its Spring National Meeting minutes, which included: 1) discussion of the data template related to risk classifications and 2) a presentation regarding the TransUnion/CARFAX rating tool. 2. Discussed the data template related to risk classification and a new introduction meant to provide the background and purpose of the template. Commissioner Daniel R. Judson (MA) asked that comments on the template and overview document be submitted by the end of August. 3. Discussed a Federal Insurance Office (FIO) request for comment on FIO s proposed methodology and data related to an affordability of auto insurance study. The Working Group heard from Birny Birnbaum (Center for Economic Justice), Dave Snyder (Property Casualty Insurers Association of America) and Robert Detlefsen (National Association of Mutual Insurance Companies) on their thoughts related to the FIO proposed study. 4. Discussed an article from Consumer Reports and a report from the Consumer Federation of America about the use of certain variables in auto insurance rating. W:\National Meetings\2015\Summer\Summaries\Final Summaries\AutoSG.docx 2015 National Association of Insurance Commissioners 1

2015 Summer National Meeting Chicago, Illinois CATASTROPHE INSURANCE (C) WORKING GROUP Sunday, August 16, 2015 11:00 a.m. 12:00 p.m. Meeting Summary Report The Catastrophe Insurance (C) Working Group met Aug. 16, 2015. During this meeting, the Working Group: 1. Adopted its March 29 minutes, which included: 1) adoption of its Spring National Meeting minutes; 2) a report from the Consumer Outreach and Assistance Post-Disaster (C) Subgroup; 3) a report from the Post-Catastrophe Regulatory Guidance (C) Subgroup; 4) an update on the National Flood Insurance Program (NFIP) and catastrophe-related legislation; 5) a presentation from Karen Clark regarding her company s RiskInsight U.S. storm surge model; and 6) a presentation regarding the status of the Federal Emergency Management Agency s (FEMA) Superstorm Sandy lawsuits. 2. Adopted the Post-Catastrophe Regulatory Guidance (C) Subgroup s Aug. 11 minutes and the Subgroup s report. The Subgroup received 37 responses to a survey sent out to the states regarding states statutes and regulations regarding catastrophes, as well as questions relating to underwriting and the various state departments procedures. NAIC staff are to follow-up with the states that did not respond to the surveys. NAIC staff will also supply specific summary information for all yes responses. The Subgroup will hold a call toward the end of September to discuss the results. The Subgroup will discuss how the updates will be submitted for initial summary review, as well as yearly updates. It will also discuss how to fulfill its charge i.e., model law/regulation or guideline versus a tool that regulators can use as a reference to consider adopting similar requirements via legislative or regulatory initiatives. 3. Adopted the Consumer Outreach and Assistance Post-Disaster (C) Subgroup s July 27 minutes and the Subgroup s report. The Subgroup discussed sending a survey out to industry by way of the trade associations to gather information regarding insurer practices following a catastrophic event. The responses the Subgroup receives from industry would be used to guide the Subgroup s deliverables, rather than identifying how each company handles claims. The draft questions are included in the Subgroup s minutes, as well as the discussion the Subgroup held regarding the survey questions. The Subgroup will meet via conference call in September to discuss the survey questions and possible revisions. NAIC staff also provided the Subgroup with a draft claims guide. NAIC staff will continue to add to the claims guide. This guide is intended to guide consumers through the processes following a catastrophic event. Additionally, NAIC staff will provide the Subgroup with a list of faith-based organizations, their contact information and information regarding the services each organization provides. 4. Received an update on the NFIP and catastrophe-related legislation. The NFIP Regulator Handbook being written by FEMA staff is expected to be available by the end of the year. Congress required an affordability study, which includes studying the feasibility of means tested vouchers. In addition, FEMA and the Government Accountability Office (GAO) are required to conduct privatization studies. In April, FEMA began implementing a number of changes stemming from the flood reform laws. These changes include: 1) an additional deductible option; 2) a new annual surcharge; and 3) implementing annual rate changes that set rates using rate-increase limitations set forth by the 2014 reform law. The U.S. House of Representatives and U.S. Senate Financial Services Government spending bills include language prohibiting the use of funding to implement the Obama administration s Federal Flood Risk Management Standard, which would require higher base flood level elevations for federally funded investments, until Congress is satisfied public input has been adequately considered. The federal banking regulators have still not released their final rulemaking regarding private flood insurance. The NAIC has endorsed the Flood Insurance Market Party and Modernization Act to help spur the development of the private flood market. Congress continues to focus on its oversight on examining FEMA s handling of the Superstorm Sandy claims process. In June, the Senate Banking Committee issued a report assessing the NFIP s management and accountability following Superstorm Sandy. 2015 National Association of Insurance Commissioners

Finally, the NAIC has endorsed the Disaster Savings Accounts Act to address natural catastrophe preparation and recovery. 5. Heard a presentation from Guy Carpenter regarding LiveCat/Deductible Buy-Down. This product enables personal and commercial consumers to purchase coverage to protect against potential losses due to a live windstorm in the Atlantic/Gulf hurricane basin in the retention/deductible of a current policy. The coverage can be purchased both on a LiveCat basis that is, when a live windstorm is present and on a pre-season basis. The products allow insureds to both buy-down their current deductible and obtain coverage for gaps and/or exclusions within their traditional coverage. There is some question as to whether this is an actual insurance product. W:\National Meetings\2015\Summer\Summaries\FInal Summaries\CatIns.docx 2015 National Association of Insurance Commissioners 2

Catastrophe Response (C) Working Group summary available as a separate handout 2015 National Association of Insurance Commissioners

2015 Summer National Meeting Chicago, Illinois CLIMATE CHANGE AND GLOBAL WARMING (C) WORKING GROUP Saturday, August 15, 2015 8:00 9:00 a.m. Meeting Summary Report The Climate Change and Global Warming (C) Working Group met Aug. 15, 2015. During this meeting, the Working Group: 1. Adopted its March 28 minutes, which included: 1) a presentation from Munich Re America on its multi-faceted climate change strategy; and 2) a presentation from Ceres on briefing materials developed to educate financial examiners on how climate risks and opportunities affect insurer solvency. 2. Heard a presentation from Deb Clarke, Global Head of Investment Research at Mercer, on Mercer s Investing in a Time of Climate Change report. The report represents a unique and unprecedented effort to model the complex affects of climate change on the diversified portfolios of institutional investors, including insurers. W:\National Meetings\2015\Summer\Summaries\Final Summaries\Climate.docx 2015 National Association of Insurance Commissioners 1

Attachment -- Property and Casualty Insurance (C) Committee 8/17/15 Draft: 8/12/15 Creditor-Placed Insurance Model Act Review (C) Working Group Conference Call Aug. 6, 2015 The Creditor-Placed Insurance Model Act Review (C) Working Group of the Property and Casualty Insurance (C) Committee met via conference call Aug. 6, 2015. The following Working Group members participated: David Altmaier, Chair, and Robert Lee (FL); Joel Laucher (CA); Carrie Couch (MO); David Browning (MS); Buddy Combs (OK); Elizabeth Dwyer (RI); Mark Worman and Jennifer Soldano (TX); Rebecca Nichols (VA); and Jason Levine (WI). 1. Reviewed the Working Group Charge Mr. Altmaier said the charge for the Working Group reads: Review information from the public hearing on lender-placed insurance and determine if changes to the Creditor-Placed Insurance Model Act (#375) are warranted. Make recommendations for changes, if warranted. Complete work on the model by the 2015 Fall National Meeting. He said the Working Group would review the 2012 public hearing, as well as what actions states have taken to address individual lender-placed insurers or the market as a whole. 2. Reviewed the Key Takeaways from the 2012 Public Hearing Mr. Altmaier said NAIC staff had drafted a document that summarized key takeaways from the 2012 public hearing on lender-placed insurance. He said it is not planned that the document would be adopted but that it would guide discussion within the Working Group. He said the document includes opinions from industry proponents and from consumer groups. Mr. Lee said three carriers write virtually all of the lender-placed insurance business. He said he disagrees with the industry argument that the market does not experience reverse competition. He said the financial institution is the named insured, and the homeowner is the secondary insured. He said banks place all business with one insurer. He also asked whether the industry has any evidence that more companies have exited the market recently than have entered. Mr. Levine said loss ratios can be low in a normal year, but they may be much higher in years with catastrophes. He said the group should keep this in mind if there is consideration given to a minimum loss ratio. Mr. Lee said Florida has not seen a major catastrophe in 10 years, but even so, lender-placed loss ratios are lower than those for homeowners policies. Mr. Altmaier said the summary should describe what years are associated with the loss ratios. Birny Birnbaum (Center for Economic Justice CEJ) said the time period used was 2004 2012. He said average loss ratios for homeowners was 60% 65%, and the average for lender-placed insurance was approximately 25%. He said the United States did experience catastrophes during this time, including Superstorm Sandy. He said lender-placed insurers cover flood, while homeowners insurers do not, yet lender-placed insurers still had lower loss ratios. Jim Novak (QBE) said the summary accurately characterizes the testimony of the industry. Mr. Birnbaum said reverse competition describes a market structure and is defined in the Credit Personal Property Insurance Model Act (#365). He said under this structure, consumers exert no market power on price. He said competition for the referrer s business drives up the price of insurance. He said the lender-placed insurance market is textbook reverse competition. Mr. Lee said in Florida, personal property and liability are options under a lender-placed insurance policy. Mr. Birnbaum said that is not really force-placed insurance because in that case, the consumer is making an affirmative decision to opt-in to that coverage. Mr. Lee pointed out that the current Model #395 does not apply to real property. Mr. Novak asked how reverse competition applies to lender-placed insurance since the consumer does have the choice to maintain insurance coverage. He said if a consumer does not comply with a contractual obligation, he or she should not have a say in insurance. He said there were more than a dozen competitors in the industry 20 years ago, and now there are two or three major writers. Mr. Lee said consumers have limited choices. He said the financial institution chooses the insurance, so the market does not exhibit normal competition. He said there have only been three major writers for several years. 2015 National Association of Insurance Commissioners 1

Attachment -- Property and Casualty Insurance (C) Committee 8/17/15 Mr. Novak said the mortgage credit crisis was not related to lender-placed insurance, and lender-placed insurance did not force people into default. He said the major causes of mortgage defaults were unemployment, health insurance issues and divorce. Mr. Lee said overpriced lender-placed insurance is a contributor to defaults. Mr. Novak said the default comes before lender-placed insurance is placed. Mr. Birnbaum said reverse competition does not have to do with the borrower s obligation under the mortgage contract. In a normal market, insurers compete on price. He said the lender-placed insurance market competes on providing consideration to the referrers of the business. He said there is a need for regulators to have oversight over pricing. Mr. Birnbaum said the causes of default are not before this Working Group. He said the Consumer Financial Protection Bureau (CFPB) found unnecessary placements by the lender-placed insurers. Mr. Levine asked how insurance regulators should deal with bad actions made by lending institutions. Mr. Altmaier said the Working Group may wish to look at Florida consent orders. Mr. Birnbaum said Florida and New York have prohibited lender-placed insurers from entering into commission arrangements with servicer-affiliated agents and from entering into captive reinsurance agreements with affiliates of the servicers. He said regulators can prohibit lender-placed insurers from engaging in practices in conjunction with servicers. He also said New York made findings that reverse competition existed. Mr. Altmaier said the New York regulation that was promulgated in January will be distributed to the Working Group. 3. Discussed the Potential Approaches to Revisions to Model #375 Mr. Altmaier said the Working Group will look at what actions states have taken since 2012. He said these actions should be analyzed, and then each section of Model #375 should be reviewed to determine if the model is in line with the key takeaways from the public hearing. He said he thought the rates section of Model #375 would get significant attention. Ms. Dwyer said Model #375 seems to exclude lender-placed insurance on real property, and she asked what the history was of this exclusion. Mr. Lee said Model #375 was originally meant for lender-placed auto. He said the Working Group would need to decide whether it wants to add references to property and flood. Mr. Birnbaum said the NAIC had a committee in the mid-1990s that looked at credit insurance, and it first focused on credit property insurance. He said the Credit Insurance Experience Exhibit was revised in 2004 to include home and auto. Mr. Novak agreed and said there were some discussions over real property at the time, but it was not added. Ms. Dwyer asked whether this would be the first time the NAIC considered adding real property to Model #375. Mr. Altmaier said the Working Group would need to decide whether to expand the model to real property and whether other changes are needed. Mr. Lee pointed out that private lender-placed flood insurance exists. Mr. Birnbaum said the Working Group should consider whether to recommend withdrawing the model or working on it. He said the model is adopted in only three states. He said the model is deficient and conflicts with actions taken in Florida and New York. Mr. Laucher said the Working Group may need to retain generic language in the model and then create subsections for different types of coverage. David Cleff (State National Insurance Companies) said his company writes lender-placed auto insurance and has used Model #375 as a framework. He said the Working Group should consider whether there is a need to withdraw the model completely. Mr. Levin said there could be separate acts. Ms. Dwyer recommended the Working Group begin by looking at the New York regulation. Mr. Altmaier agreed as he thinks New York is the only state to take this kind of action. He also asked individuals to send in any other actions they know that have been taken by states. Having no further business, the Creditor-Placed Insurance Model Act (C) Working Group adjourned. W:\National Meetings\2015\Summer\Cmte\C\Creditor Placed Ins Model Review\8-6 CreditorPlacedWG min.docx 2015 National Association of Insurance Commissioners 2

2015 Summer National Meeting Chicago, Illinois CROP INSURANCE (C) WORKING GROUP Saturday, August 15, 2015 2:00 3:00 p.m. Meeting Summary Report The Crop Insurance (C) Working Group met Aug. 15, 2015. During this meeting, the Working Group: 1. Adopted its Spring National Meeting minutes, which included: hearing updates from the Risk Management Association (RMA) and the National Crop Insurance Services (NCIS). 2. Heard a presentation from the Independent Insurance Agents and Brokers of America, Inc. (IIABA). The IIABA provided the agent and broker perspective concerning the current state of the crop program, the impact of the Standard Reinsurance Agreement (SRA) on agents and brokers and the education initiatives of the IIABA on reducing exposures relative to errors & omissions coverage associated with crop insurance placement. 3. Discussed a referral from the Statutory Accounting Principles (E) Working Group regarding SSAP No. 78 Multiple Peril Crop Insurance. The issue relates to a provision in the farm bill that allows farmers to pay premiums after the exposure period. SSAP No. 78 Multiple Peril Crop Insurance may need to be updated to clarify and define the due dates and terms included in the 2012 farm bill revisions. 4. Heard an update on federal activities. Brooke Stringer (NAIC) provided an update to the Working Group regarding the U.S. Department of Agriculture s (USDA) new crop insurance coverage option that provides producers with coverage against an unexpected decrease in their operating margin, the expansion of the USDA crop insurance coverage for fruit and nut producers beginning in 2016 and the grant money available through the USDA for education programs in states with low levels of federal crop insurance participation and availability. W:\National Meetings\2015\Summer\Summaries\Final Summaries\CropWG.docx 2015 National Association of Insurance Commissioners

2015 Summer National Meeting Chicago, Illinois EARTHQUAKE (C) STUDY GROUP Saturday, August 15, 2015 2:00 3:00 p.m. Meeting Summary Report The Earthquake (C) Study Group met Aug. 15, 2015. During this meeting, the Study Group: 1. Heard a presentation from Kyle Murray (Oklahoma Geological Survey), who provided an overview of historic versus recent seismic activity in the contiguous U.S. The presentation also provided information on plate tectonics, major fault zones and anomalous events that have resulted in benchmark scientific studies and influenced U.S. seismic hazard mapping. 2. Discussed the Notice Issued to Protect Oklahomans Who Have Earthquake Insurance consumer bulletin originally issued on March 3 by Commissioner John D. Doak (OK). The bulletin was issued to insurance companies to clarify the Oklahoma Insurance Department s expectations for earthquake insurance coverage. It focused on exclusions for manmade damage, pre-existing damage and claims adjusters. An updated bulletin was issued July 17 to advise consumers coverage was available for induced seismicity. 3. Discussed the NAIC Center for Insurance and Policy Research (CIPR) summer event, which was held on Aug. 15. The event, hosted by Commissioner Doak, featured a number of expert presenters and panelists discussing issues and challenges of earthquake exposures. Topics covered by the event included scientific findings related to the induced seismicity, the role of mitigation, insurance coverage concerns and regulatory experiences with earthquakes. 4. Discussed findings from The State of Earthquake Coverage report, issued this month by the Missouri Department of Insurance. The report found 1) that while rates have increased throughout Missouri, the rates in the highest risk areas of the state have increased much more rapidly, widening the costs between high- and low-risk areas; 2) earthquake insurance coverage for residences in the New Madrid Seismic Zone has fallen to 20% in 2014, down from more than 60 % in 2000; and 3) the value of self-insured residential property in moderate to high-risk zones exceeds $100 billion. 5. Discussed a work plan for 2015. Study Group members were asked to send work plan ideas to NAIC staff. W:\National Meetings\2015\Summer\Summaries\Final Summaries\earthquake.docx 2015 National Association of Insurance Commissioners 1

Public Adjuster (C/D) Working Group did not meet at the National Meeting 2015 National Association of Insurance Commissioners

Risk Retention (C) Working Group did not meet at the National Meeting 2015 National Association of Insurance Commissioners

2015 Summer National Meeting Chicago, Illinois SHARING ECONOMY (C) WORKING GROUP Saturday, August 15, 2015 9:00 10:00 a.m. Meeting Summary Report The Sharing Economy (C) Working Group met Aug. 15, 2015. During this meeting, the Working Group: 1. Adopted its July 22 minutes, which included: 1) presentations from short-term rental companies regarding their current insurance programs, as well as their required terms and conditions; 2) a presentation from the Florida Office of Insurance Regulation regarding proposed Florida Senate Bill 1298, which includes the regulation of short-term rental companies. 2. Heard a presentation from Jeff DeTurris (Insurance Services Office ISO). He explained the language included in the ISO s existing homeowners and dwelling policies pertinent to home-sharing, as well as the ISO s proposed plans to address insurer concerns. 3. Heard a presentation from Robert Passmore (Property Casualty Insurers Association of America PCI). He explained that the concept of individuals renting rooms or vacation homes is not new, and products currently exist to accommodate those exposures. Standard homeowners policies allow for the occasional rental of one s personal residence, and only a couple of states have introduced legislation on short-term rentals. 4. Discussed consumer alerts from state insurance departments and the NAIC. Multiple states and the NAIC have published consumer alerts warning homeowners of the risks involved in renting their homes through short-term rental companies. Many alerts also warn renters of the inherent risks involved in renting an individual s home. W:\National Meetings\2015\Summer\Summaries\Final Summaries\SharingEconWG.docx 2015 National Association of Insurance Commissioners 1

2015 Summer National Meeting Chicago, Illinois TERRORISM INSURANCE IMPLEMENTATION (C) WORKING GROUP Sunday, August 16, 2015 8:00 9:00 a.m. Meeting Summary Report The Terrorism Insurance Implementation (C) Working Group met Aug. 16, 2015. During this meeting, the Working Group: 1. Adopted its July 9 and April 21 minutes and its Spring National Meeting minutes, which included: 1) discussing the potential collection of terrorism data; 2) discussing comments received on a terrorism data blanks proposal; and 3) adopting the Terrorism Risk Insurance Supplement and its accompanying instructions. 2. Heard a report from NAIC staff on an Aug. 12 Federal Insurance Office (FIO) stakeholder meeting related to terrorism data. Interested parties shared concerns with the FIO regarding the collection of certain data elements. Beginning in 2016, the FIO is planning to begin collecting data referenced in the Terrorism Risk Insurance Program Reauthorization Act of 2015. Michael T. McRaith (FIO) said the FIO welcomes input from state insurance regulators, with a goal of avoiding a duplication of data-collection efforts. 3. Heard an update on the status of the Terrorism Risk Insurance Supplement, which will be considered by the Accounting Practices and Procedures (E) Task Force at this national meeting. 4. Discussed the need to have continued discussions on the challenges of data collection and what additional data might be collected in the future. The Working Group also discussed the possibility of collecting data on take-up rates. W:\National Meetings\2015\Summer\Summaries\Final Summaries\TerrWG.docx 2015 National Association of Insurance Commissioners 1

2015 Summer National Meeting Chicago, Illinois TRANSPARENCY AND READABILITY OF CONSUMER INFORMATION (C) WORKING GROUP Saturday, August 15, 2015 11:00 a.m. 12:00 p.m. Meeting Summary Report The Transparency and Readability of Consumer Information (C) Working Group met Aug. 15, 2015. During this meeting, the Working Group: 1. Adopted its Spring National Meeting minutes, which included: a referral from the Sharing Economy (C) Working Group to update A Shopping Tool for Homeowners Insurance and A Shopping Tool for Auto Insurance, as well as the consumer guides for both homeowners and auto insurance, to include ride-sharing and home-sharing information; and a presentation regarding ways to improve service and communication and to incorporate public data into a useable format. 2. Heard a presentation from Joel Laucher (CA) regarding California s policy comparison tool. This tool allows a consumer to compare homeowners insurance offered by various insurance companies. It helps consumers by allowing them to see what each policy offers before they make a purchasing decision. 3. Discussed an article regarding ways in which the states should use open data to empower consumers. The article suggests the states should work together through forums such as the NAIC to provide information regarding key data about property, casualty and life insurance. The article also suggests that open data standards should be created through the NAIC. 4. The Working Group did not have time to discuss the language for transportation network companies to be added to the consumer guides and shopping tools. It will meet via conference call sometime in September to discuss this issue. W:\National Meetings\2015\Summer\Final Summaries\Transparency.docx 2015 National Association of Insurance Commissioners 1

Consider Adoption of the Title Insurance Consumer Shopping Tool Template and Options for Regulators to Distribute a Title Insurance Consumer Shopping Tool Attachment Three

Adopted by the Title Insurance (C) Task Force July 30, 2015 How to Buy Title Insurance in [Insert State] This guide: Covers the basics of title insurance. Explains the need for title insurance. Offers tips to shop for title insurance and closing services. Gives you questions you should ask before you buy title insurance. [Name] [Superintendent of Insurance] [DOI Logo] [DOI Website Address] Drafting Note: This template has been developed for state departments of insurance who are interested in providing a consumer education publication regarding title insurance. The template was developed as a comprehensive guide that can be edited/personalized to meet the individual needs of a state. 1

Table of Contents Introduction Page 3 Buying or Refinancing a Property Page 3 What is Title Insurance, and What Does it Cover? Page 4 Two Types of Title Insurance Owner s and Lender s Policies Page 4 What Doesn t Title Insurance Cover? Page 4 Who Sells Title Insurance? Page 5 The Right to Choose Your Own Title Agent/Company Page 5 Who Pays for Title Insurance? Page 5 What Does Title Insurance Cost? Page 6 Ask if You re Eligible for Discounts Page 6 The Difference Between Title and Homeowners Insurance Page 6 Questions to Ask Before You Buy Title Insurance Page 6 The Real Estate Closing Page 7 Closing Agents Page 8 Questions to Ask When You Choose a Closing Agent Page 8 Closing Protection Letters Page 8 Shop Around for Title Insurance and Closing Services Page 8 Cost Comparison Chart Page 9 Final Tips to Remember Page 10 How to File a Title Insurance Claim Page 10 The [INSERT DOI NAME] is Here to Help Page 10 Other Resources Available Page 11 Disclaimer: The information included in this publication is meant to serve as a guide and is not a substitute for legal or professional advice. Please contact a professional if you have any questions. 2

Introduction A real estate transaction may be one of the largest investments you ll ever make. Because the decisions you make when you buy or refinance a home can have effects for years to come, it s important to take time to learn about the process so you can make good decisions. You may want to hire a licensed professional to help you with the many steps to buy or refinance a home or piece of property. Before you agree to do business with anyone, however, be sure the individual is qualified and licensed. Buying or Refinancing a Home or Property So you re ready to buy or refinance a home or piece of property. Now what? If you ve found the perfect home or property and the seller has accepted your offer, the next steps will most likely be: You ll get a loan from a mortgage lender. A professional will inspect and appraise the home or property. You ll choose an individual or business, known as a closing agent, to organize and finalize your real estate transaction. You ll choose a closing date to sign paperwork and take ownership of your new home. You ll buy homeowners insurance through a licensed property and casualty insurance agent. You ll decide if you need flood and/or earthquake insurance, which you can buy through a licensed property and casualty agent. You ll decide if you ll need title insurance, which you can buy through a licensed title agent or company. A professional may survey the property. A survey is a professional drawing of the property s boundaries. It also shows where a home is located on the property. You may be able to buy a home warranty that covers the mechanical breakdown of individual parts of a home, such as the electrical and plumbing systems. A warranty doesn t cover the home s structure, may or may not cover appliances, ends at a specific point in time (for example, one year) and has exclusions and limitations that you should review. Home warranties might not be regulated as insurance in your state. A final walk through of the home you re buying will be scheduled. You ll sign legal paperwork to finalize your new loan. Drafting Note: States may consider including additional types of catastrophe insurance such as wildfire coverage depending on the exposures common to their region. If you re refinancing your home or property: You ll get a new loan from a mortgage lender. A professional may inspect and appraise your home or property. You ll give the lender information about your homeowners, flood and/or earthquake insurance coverage. You ll decide if you need title insurance, which you can buy from a licensed title agent or company. A closing date will be selected. You ll sign legal paperwork to finalize your new loan. When you buy or refinance a home or piece of property, you ll need to decide whether to buy title insurance. What is title insurance? Why do you need it? This guide will answer those questions and more. 3

What is Title Insurance, and What Does it Cover? A title documents your legal ownership or interest in property. Title insurance is an insurance policy that covers past title problems that come up after you buy or refinance a property. Lost, forged or incorrectly filed deeds, property access issues and liens on a property are just a few of the title problems that could come up after you buy or refinance a home or piece of land. For example, if you received a letter telling you there s an unpaid mortgage on the property you just bought, you could submit a claim to your title insurance company. The title insurance company would pay the legal costs to settle the dispute and/or to resolve the problem. Without title insurance, you might have to pay all of the legal costs to settle the dispute. And if you lose the dispute, you could lose money, the equity you have in your home, and possibly ownership. Two Types of Title Insurance Owner s and Lender s Policies There are two types of title insurance policies: An Owner s Policy A Lender s Policy An owner s policy protects you for the full price you paid for the home plus legal costs if a past title or ownership issue comes up after you buy your home. An owner s policy is issued for the amount you paid to buy your home, and the policy will cover you as long as you own an interest in the property. You are not required to purchase an owner s policy, but if you choose not to, you may lose the money you ve paid for your home. If a basic owner s policy doesn t cover a specific title issue, often you can add coverage, known as a policy endorsement. For example, if you re buying a new home and the owner s policy doesn t cover claims (often known as a mechanic s lien) filed by a contractor, you can add a policy endorsement to ensure you are covered. Some endorsements are free while others can be added for an additional fee. An enhanced owner s policy, which has a higher level of coverage than a standard owner s policy, also may be available in your area. Enhanced owner s policies cost about 20% more than a standard owner s policy, but they cover extra risks. An enhanced owner s policy also may continue to provide coverage after a property has been transferred. If you borrow money to buy your home or property, your lender is likely to require you to buy a lender s policy. A lender s policy only protects the lender if a title or ownership problem comes up after the property is purchased. A lender s policy is issued for the amount of the mortgage, and the coverage goes down as you pay down your loan. Unlike an owner s policy, the lender s policy ends when you pay off your mortgage. You may be expected to pay the premium for a lender s policy. Because a lender s policy only protects the lender from title problems, you ll also need an owner s policy if you want to protect yourself. What Doesn t Title Insurance Cover? Title insurance policies do not cover ownership issues that come about after you ve bought a home. For example, if your neighbor builds a fence on your property after you ve bought your home, your title insurance policy will not cover the costs to settle the dispute. 4

Also, most title insurance policies don t cover issues such as easements, boundary line disputes, zoning violations and air or mineral rights. Your title insurance policy may spell out other issues that won t be covered. And if there s a title issue specific to the home you re buying or refinancing, your title policy may not cover it. Ask for a list of what will and will not be covered, and be sure to read your policy. Who Sells Title Insurance? Only licensed title insurance companies, agencies and agents can sell title insurance in [INSERT STATE]. Drafting Note: If a state permits other individuals and entities to sell title insurance, this sentence should be amended to include those parties. You can buy title insurance directly from a title insurance company or a title agent who sells title insurance for a company. The Right to Choose Your Own Title Agent/Company You have the right to shop for and choose your provider of title insurance and settlement services A good time to shop for title insurance is when you choose a real estate agent, and a lender has prequalified you for a loan. You ll have an idea of the price you can pay for a home/property and a title insurance agent or company can use that information to estimate your title insurance costs. There are several ways you can find a title insurance agent or company: You can ask the sellers who they used when they bought the home. You can check the [INSERT NAME OF DOI] website, [INSERT WEB ADDRESS]. You can look up title insurance agents, agencies and companies in the phone book. You can check online for title insurance agents, agencies and companies in your area. You can ask for recommendations from your real estate agent, attorney, mortgage lender, financial institution or builder. If your real estate agent, attorney, builder or lender offers to arrange title insurance for you, or suggests you use a specific title agent or company, ask if they have a business arrangement with the title company or agent they re recommending and if they ll make money from the referral. Federal law requires real estate professionals, title agents and lenders to tell you about any business arrangements they may have. Also, beware of statements such as: Everyone charges the same price. We ll give you a discount on something else if you use our title agent. If you choose another title agent, your purchase may be delayed. These types of statements may be used to convince you to give up your right to choose a title agent or company, and you may pay more for title insurance than if you had shopped around. Who Pays for Title Insurance? If you re buying a home, who pays for title insurance depends in part on local custom. It may be something, however, that you can negotiate with the seller of the property. When buying a home, be sure to ask your real estate agent what the custom is in your area and if you ll likely be the one to pay for title insurance. 5

If you re refinancing your home, it ll be your responsibility to buy and pay for the title insurance policy. A title insurance policy is paid for with a one-time premium payment. What Does Title Insurance Cost? The cost of title insurance is usually tied to the value of the home. If you re buying an owner s policy, the price of your policy will depend on the home s selling price. The price of title insurance also can include more than just insurance. One cost included in the price is a title search. When a title search is conducted, a title agent or company reviews local records, such as deeds, mortgages, wills, divorce decrees, court judgments and tax records looking for any title issues with the property. In [INSERT STATE NAME], a title search must be done before a company can issue a title insurance policy. If you re buying a lender s policy, the price of title insurance will depend on your loan amount. Ask if You re Eligible for Discounts When you buy title insurance, ask if you re eligible for any discounts. If there was a previous title policy on the home (because the home changed owners or you re refinancing), you may get a discount known as a reissue rate. If you decide to buy both an owner s and lender s policy, you may get a discount if you buy both policies together. The Difference Between Title and Homeowners Insurance Title insurance is different from homeowners insurance. Title insurance protects you against past title problems. Homeowners insurance protects you against future issues that cause damage to your home or personal property. Homeowners insurance also limits your personal legal responsibility (or liability) if someone is injured while they re on your property. Licensed title agents and companies sell title insurance. Insurance agents licensed to sell property, and casualty insurance sell homeowners insurance. You pay the premium for title insurance with a one-time payment, when you buy or refinance a home. A homeowners insurance policy is paid for on an ongoing basis and is up for renewal each year. Homeowners insurance does not protect your ownership in the property and does not replace the need for title insurance. Questions to Ask Before You Buy Title Insurance When you shop for title insurance, be sure to ask the title agent or company the following questions: How long have you been licensed to sell title insurance in [INSERT STATE]? What title insurance company do you sell policies for? Are title insurance premiums regulated in [INSERT STATE]? Are any discounts available? Are you related or affiliated in any way with my real estate agent, mortgage lender, builder, or attorney? Will anyone be paid a referral fee or commission or be compensated if I buy title insurance from you or a company you represent? 6

In addition to title insurance premiums, what other fees and charges will I pay? What policy endorsements are available? Do you charge a cancellation fee if I don t buy title insurance from you after you do a title search? Will I need to pay for a survey before you can sell me title insurance? The Real Estate Closing The last step to buying or refinancing a home / property is known as the closing. Shortly after the seller accepts your offer to buy their home or the lender approves your refinancing, a closing date will be set. A closing can be done in person, electronically or by mail. As part of the closing, you ll be asked to sign the legal paperwork required to finalize the real estate transaction. On the day of the closing, you (as well as the seller) will be expected to pay any money owed. If an in person closing is scheduled, expect the closing to last an hour or two. In addition to you, the seller, real estate agent(s), attorney, title agent and lender may attend the closing. Make sure you understand what you re being asked to sign. During the closing, you ll be signing documents that are legal binding contracts. Take time to understand what they mean. If you don t understand something, ask someone to explain it to you, or ask for time to contact a trusted friend, family member, attorney or advisor for help. One document you ll be asked to review and sign is the closing disclosure. The closing disclosure shows all of the money to be paid to complete the transaction. Some of the costs listed on the closing disclosure will include: Outstanding mortgages to be paid. Money to be exchanged between the buyer and seller. The amount of the new loan(s). Loan origination charges. Property appraisal fees. Credit report fees. Real estate agent fees. Tax preparation fees. Taxes owed. Escrow funds. Title insurance premiums. Courier fees. Settlement or closing fees. Closing protection fees. Document or recording fees. Federal law gives you the right to see the closing disclosure at least three business days before closing. It s highly recommended that you ask for a copy of the closing disclosure ahead of time so you have a chance to review it and ask questions. If everything isn t in order by your scheduled closing date, your closing date may be moved to another date. After the closing, you ll be given copies of all the documents you signed. 7

Closing Agents Closing agents handle real estate closings and coordinate all of the steps required to make the real estate transaction official. They re responsible for getting mortgage and loan pay-off amounts from the seller s lender(s) and the amount of property taxes owed. They also give instructions to the buyer and seller, hold money until the home s title is transferred, prepare documents for the buyer and seller to sign, pay out money owed and file documents with the county recorder, who updates records to show a property has changed owners. Some title agents do more than just sell title insurance. They also conduct real estate closings by serving as a closing agent. Their responsibilities as a closing agent are separate from what they to do as a title agent. Other professionals, such as attorneys, also can be closing agents. Just as you have the right to choose a title agent or company, you also have the right to choose your closing agent. Questions to Ask When You Choose a Closing Agent When you choose a closing agent, be sure to ask the following questions: Can you give me a list of all the fees and charges I would pay if you were my closing agent? What fees and charges are negotiable? Are your closing staff licensed title insurance agents? How and when do you conduct closings? Who will handle my closing? When will you give me a copy of the settlement statement? 1 Do you have references or testimonials available? Do you offer closing protection coverage? How much does closing protection cost? Closing Protection Letters Title insurance doesn t protect the lender or buyer against mistakes made during the closing, or if money is stolen or paid to the wrong parties. For an added fee, title insurance agents and companies that conduct real estate closings offer closing protection letters. If you buy a closing protection letter, the title insurance company will reimburse you for any money you lose from negligence, fraud, theft of funds or errors the closing agent made. Without this, you d have to sue the agent to get back any money lost. If you buy closing protection coverage, be sure to ask for a copy of the closing protection letter for your records. Drafting Note: States who do not require closing protection should delete this section. Shop Around for Title Insurance and Closing Services As rates and fees for title insurance and closing services may vary, you should shop for title insurance and closing services. Use the chart that follows to learn how much you ll be charged for certain rates, fees and services. 8

Cost Comparison Chart Company Name Company Name Company Name Title Insurance Premium Price (Lender's Title Policy) $ $ $ Premium Price (Owner's Title Policy) $ $ $ Endorsement Price $ $ $ Title Search Fee $ $ $ Closing Protection Letter $ $ $ Deed Preparation Fee $ $ $ Other $ $ $ Other $ $ $ Total: $ $ $ Closing Costs Company Name Company Name Company Name Government Recording Charge $ $ $ Tax & Other Certifications $ $ $ Overnight Mail $ $ $ Wire Fee $ $ $ Transfer Tax $ $ $ Notary Fee $ $ $ Settlement Fee $ $ $ Document Preparation Fee $ $ $ Email/Electronic Doc Fee $ $ $ Other $ $ $ Other $ $ $ Total: $ $ $ Drafting Note: This cost comparison tool has been developed as a guide that may be edited or personalized for the individual needs of the state. States may change the order, add or remove items to adhere to state law. 9

Final Tips to Remember Deal only with licensed professionals who re in good standing in [INSERT STATE]. As soon as you make an offer on a house or choose a lender to refinance with, start shopping for title insurance. Decide up front who ll pay for the title insurance policies. Whoever buys the title insurance policy has the right to choose the title agent or title company. A professional who recommends a title insurance company or agent to you may receive a commission or referral fee. Ask the seller which title insurance company they used. Ask friends or family who recently bought a home if they would recommend their title agent/company. If you buy an owner s policy, be sure the coverage is equal to the price you paid for your home. Comparison shop, and get at least three quotes before you buy title insurance and closing services. Ask about available discounts. Ask title and closing agents for an itemized list of their fees and charges. Ask for a copy of the title commitment at least three weeks before your closing date. Know exactly what your title insurance policy will cover. If your title agent also will be the closing agent, ask if closing protection coverage is available. Ask the closing agent for a settlement statement at least one business day before your scheduled closing. Knowledge is power, so don t be afraid to ask questions! Read and understand all documents before signing them. Request copies of all documents. Keep a copy of your title insurance policy for as long as you own your property. How to File a Title Insurance Claim If an issue arises about your home s title, contact your title insurance company as soon as possible. If you don t know the name of your title insurance company, check the paperwork you signed when you bought or refinanced your home. You also can contact your title agent or closing agent for help. The [INSERT DOI NAME] is Here to Help For more information about buying insurance, please visit [INSERT DOI WEBSITE ADDRESS], or call [INSERT TELEPHONE NUMBER]. As a consumer protection agency, the [INSERT DOI NAME] also can help if you believe an insurance agent or company has misled you or acted improperly. To file a complaint, please visit our website at [INSERT WEB ADDREESS], or send a written complaint and any supporting documents to: [DOI Logo] [DOI Address] [City, State Zip Code] [DOI Telephone Numbers] [DOI Website] [DOI Facebook / Twitter Contact Information] 10

Other Resources Available To verify the license status of the professionals who will be helping you with your real estate transaction, please contact: Real Estate Agent Bank/Mortgage Lender Real Estate Appraiser Insurance Agent / Insurance Company and Title Agent Title Insurance Company Attorney [STATE AGENCY NAME] [STATE AGENCY ADDRESS] [CITY, STATE & ZIP CODE] [AGENCY WEBSITE] [AGENCY TELEPHONE NUMBER] [STATE AGENCY NAME] [STATE AGENCY ADDRESS] [CITY, STATE & ZIP CODE] [AGENCY WEBSITE] [AGENCY TELEPHONE NUMBER] [STATE AGENCY NAME] [STATE AGENCY ADDRESS] [CITY, STATE & ZIP CODE] [AGENCY WEBSITE] [AGENCY TELEPHONE NUMBER] [STATE AGENCY NAME] [STATE AGENCY ADDRESS] [CITY, STATE & ZIP CODE] [AGENCY WEBSITE] [AGENCY TELEPHONE NUMBER] [STATE AGENCY NAME] [STATE AGENCY ADDRESS] [CITY, STATE & ZIP CODE] [AGENCY WEBSITE] [AGENCY TELEPHONE NUMBER] To find other useful information regarding the home buying process, please contact: U.S. Department of Housing and Urban Development 451 7 th Street S.W. Washington, DC 20410 202-708-1112 www.hud.gov National Flood Insurance Program 500 C Street SW Washington, DC 20472 800-621-FEMA www.floodsmart.gov Consumer Financial Protection Bureau P.O. Box 4503 Iowa City, Iowa 52244 855-411-2372 855-237-2392 (Fax) http://www.consumerfinance.gov 11

Adopted by the Title Insurance (C) Task Force July 30, 2015 Options for Regulators to Distribute a Consumer Title Insurance Shopping Tool State departments of insurance (DOI) should consider: Developing a helpful guide for consumers regarding title insurance and how to shop for it. The NAIC has created a shopping tool template that can be modified pursuant to state law. Asking the NAIC to circulate the guide to all state DOI. Asking the NAIC to work with the Consumer Financial Protection Bureau (CFPB), National Association of Realtors, National Association of Home Builders (NAHB) and National Association of Mortgage Brokers (NAMB) regarding the promotion of the shopping tool. Including a link to the shopping tool on their websites. Designing a marketing campaign geared toward promotion of the shopping tool. Working with the various media outlets (local newspapers, local lifestyle magazines, local real estate magazines, etc.) on an article about the importance of the issue and letting consumers know the shopping tool is available for use. Optimizing social media sites as promotional tools. Researching search engine optimization (SEO) strategies to ensure the shopping tool is listed in the top search results for specific words queried. Sending a link to the shopping tool to authorized carriers, agents and agencies and asking them to promote the shopping tool to consumers. Partnering with the American Land Title Association (ALTA) and their local land title association to promote use of the guide. Partnering with the state agencies that regulate real estate agents, lenders and mortgage brokers to promote the shopping tool on their websites. Partnering with the state American Bar Association (ABA) to promote the shopping tool. Partnering with nonprofit organizations that provide education/materials to first-time home buyers. Partnering with consumer groups, builders, real estate agents, lenders, title agents, closing agents, real estate attorneys, etc., to promote the shopping tool. 2015 National Association of Insurance Commissioners 1

Consider an Extension for Revisions to the Creditor-Placed Insurance Model Act (#375) 2015 National Association of Insurance Commissioners

Discuss the June 30, 2015, Letter from the Casualty Actuarial and Statistical (C) Task Force Attachment Four

To: From: Commissioner Mike Chaney, Chair, Property and Casualty Insurance (C) Committee Richard Piazza (LA), Chair, Casualty Actuarial and Statistical (C) Task Force Date: June 30, 2015 Re: 2015 charge regarding SOA general insurance education The Casualty Actuarial and Statistical (C) Task Force has the following charge: Provide a recommendation by July 1, 2015, regarding the ability of SOA members who obtain the SOA fellowship in general insurance and meet U.S. qualification standards to sign actuarial opinions for NAIC P/C annual financial statements. If appropriate, follow the recommendation with a blanks proposal to allow SOA members who obtain the SOA fellowship in general insurance and meet U.S. qualification standards to sign P/C Statements of Actuarial Opinion. This charge results from having defined Qualified Actuary for the purpose of signing Statements of Actuarial Opinion for the NAIC Property and Casualty Annual Statement (Actuarial Opinion). A definition is required since actuaries are not licensed (as are accountants and lawyers). The definition of Qualified Actuary as included in the NAIC s 2015 P/C Annual Statement Instructions is as follows: Qualified Actuary is a person who meets the basic education, experience and continuing education requirements of the Specific Qualification Standard for Statements of Actuarial Opinion, NAIC Property and Casualty Annual Statement, as set forth in the Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States, promulgated by the American Academy of Actuaries, and is either: (i) A member in good standing of the Casualty Actuarial Society; or (ii) A member in good standing of the American Academy of Actuaries who has been approved as qualified for signing casualty loss reserve opinions by the Casualty Practice Council of the American Academy of Actuaries. To evaluate the Society of Actuaries (SOA) general insurance educational track the Task Force needs to know if the track conforms to the specifications in the U.S. qualification standards and whether the resulting education sufficiently prepares an actuary to sign an Actuarial Opinion. The Task Force has one initial concern: While the standards established by the American Academy of Actuaries (Academy) seem sufficient in regard to experience and continuing education requirements, the qualification standards lack detail regarding what a basic education entails. We believe this may be a result of only having one U.S. P/C actuarial educational body (the Casualty Actuarial Society) in the past. The Task Force finds the issue regarding basic education specificity should be addressed later and separately from the above charge. The Task Force would like to conduct an independent review of the SOA s general insurance educational track. The Task Force s focus would be on the evaluation of the SOA s educational track and the examination system as a whole, especially to gain comfort with the reliability and consistency of the basic educational system. An independent review would be a valuable tool to determine whether the SOA general insurance education can or cannot produce actuaries qualified to sign P/C Actuarial Opinions. The Task Force considered an independent review over the past year but was unable to obtain a commitment from the NAIC to fund the review. Though the Task Force believes a review funded by the NAIC would avoid any question concerning the independence of the review process, the Task Force realized it would be expedient to look at an alternative funding source. The SOA has volunteered to fund the study and would work with the Task Force to keep the study as independent as possible. A benefit from SOA funding would be that the study could begin more quickly than if NAIC funds the study. The Task Force believes it needs to complete the independent study of the examination system before it can determine if Fellows completing the SOA general insurance track are qualified to sign P/C Actuarial Opinions.

Currently, the Academy s Casualty Practice Council (CPC) reviews requests from non-cas-educated actuaries to determine whether the actuary meets the qualifications to sign the statement on casualty loss reserves. In order to be a Qualified Actuary, basic education is one piece of the qualification requirements, along with experience and continuing education. The Task Force believes it would be informative to receive reports from the CPC regarding its review of Fellows completing the SOA general insurance track. The Task Force makes the following recommendations and would like your approval to proceed along this path: 1. The NAIC can continue to rely on the CPC to review individual Fellows completing the SOA general insurance track and should request periodic reports from the CPC as to the general results of these reviews. The Task Force should commence work on the content of these reports immediately. The content of these reports will be delineated by the Task Force but subject to the CPC s ability to provide them. 2. The Task Force should obtain an independent review of the SOA general insurance educational track and examination system to verify that the resulting education sufficiently prepares an actuary to sign Actuarial Opinions for NAIC s P/C financial statements. The Task Force should begin work immediately to provide the needed information for an RFP to obtain an independent review of the SOA general insurance track and requests the NAIC issue an RFP. The Task Force recommends accepting the SOA's offer to fund this review but, as an alternative, NAIC may want to consider funding the review itself. The targeted completion date is March 31, 2016. 3. The Task Force may need to collect additional information. Upon consideration of the information gathered by the Task Force over the course of addressing this charge, the Task Force should evaluate the current definition of Qualified Actuary in the P/C Annual Statement Instructions and modify it as needed. The Task Force s targeted date for completion of this evaluation is three months after the completion of the independent review. 4. In the Task Force s charge to provide a recommendation regarding the SOA general insurance educational track, the July 1 deadline should be extended to three months after the completion of the independent review. If you have questions, please contact me at 225-342-4689 or RPiazza@ldi.la.gov or Kris DeFrain at 816-783-8229 or kdefrain@naic.org. cc: Kris DeFrain (NAIC) W:\National Meetings\2015\Summer\TF\CasAct\CASTF SOA GI Track Response to C_final.docx 2

Hear Presentation Regarding the U.S. Supreme Court Decision Upholding Disparate Impact 2015 National Association of Insurance Commissioners

Hear Presentation Regarding Farmers Education of Consumers on Disaster Resilience Attachment Five 2015 National Association of Insurance Commissioners

MAKING CUSTOMERS SMART ABOUT SAFETY AND DISASTER RESILIENCE August 17, 2015 Victoria L. McCarthy, CPCU, PMP, Farmers Insurance, Head of State and Federal Regulatory Affairs PROPRIETARY AND CONFIDENTIAL MAKING CUSTOMERS SMART ABOUT INSURANCE Our mission is to instill confidence, security, and peace of mind in our customers by helping them get smart about insurance, plan for potential risk, and quickly restore their lives after a loss We deliver on our brand promise by helping our customers get smarter about their insurance Our employees and exclusive agents work together with a common purpose to help make our customers smarter about insurance, help them plan for the unexpected, and restore order when the unexpected occurs Through our award-winning University of Farmers, we train employees and agents to deliver on our Smart brand promise at our campuses in Michigan and Southern California 2 PROPRIETARY AND CONFIDENTIAL

SMARTER CUSTOMERS MAKE SMARTER INSURANCE DECISIONS Farmers believes in helping make customers smarter, more informed, and better prepared Every time a customer interacts with Farmers, they come away a little more knowledgeable about insurance This is more than just an advertising tagline every interaction with a customer is an opportunity to help customers become educated about insurance and risk mitigation Because disaster can strike at any time, it is important for insurance consumers to be prepared Farmers created customer guides, brochures, and checklists with information on what to do to help avoid common causes of loss, how insurance can help, and how customers can protect the people and property they care about The more Farmers customers know, the better they can plan ahead 3 PROPRIETARY AND CONFIDENTIAL SMART TO PLAN AHEAD Farmers partnered with the Institute for Business and Home Safety to create the Smart Tool Kit Informs customers how to prepare for day to day safety and natural disasters Tips are rooted in industry research Educates customer how to better prepare, prevent, and plan ahead Resources Include: Hail Storm Preparation Tips Reducing Earthquake Risk Brochure Hurricane Preparation tips Tornado Safety Tips Reducing Wildfire Risk Brochure Earthquake Checklist Wildfire Preparedness Checklist Hurricane Preparedness Checklist Home Maintenance Checklist Flooding Preparedness Checklist Tornado Preparedness Checklist 4 PROPRIETARY AND CONFIDENTIAL

SAMPLE PREPAREDNESS CHECKLISTS Over half a million Smart Materials were shared with customers in the first 45 days of publication 5 PROPRIETARY AND CONFIDENTIAL QUESTIONS? PROPRIETARY AND CONFIDENTIAL

Insurance Institute for Business & Home Safety Disaster Mitigation Resources Brenda O Connor, IBHS Senior Vice President IBHS Mission: To conduct objective, scientific research to identify and promote effective actions that strengthen homes, businesses, and communities against natural disasters and other causes of loss."

IBHS Research Center WIND WILDFIRE WATER RAIN

Finding Solutions with Allies Consumer Wildfire Resources

Consumer Hurricane Resources Thank You. Pleasevisit visit DisasterSafety.org DisasterSafety.org Please