Society of Risk Management Consultants By: Greg Mondello | Corporate Client Manager | Flood Zone Correction Inc., CRIO Inc., Flood Risk Solutions LLC, Premier Elevation Certificate Network Inc. O. 877-356-6396 ext. 121 | F. 561-616-8859 | C. 561-602-9175 E: gmondello@floodzonecorrection.com

Presentation Agenda Flood Basics Background information about our companies: CRIO, Inc. Flood Zone Correction, Inc. Flood Risk Solutions, LLC Premiere Elevation Certificate Network, Inc. Inland Reclassifications VS. Coastal Reclassifications Biggert Waters Flood Insurance Reform Act and Its Ramifications NFIP Statistics

Flood Basics: National Flood Insurance Program (NFIP): Was created by the United States government through the National Flood Insurance Act of 1968 to enable property owners in participating communities to purchase insurance against losses from flooding from the government. This insurance was designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods. Flood Insurance Rate Map (FIRM) : There are roughly 138,000 published FIRM that define the flood risk across all 50 states. Special Flood Hazard Area ( SFHA ): FEMA considers High Risk Flood zones, where the land is below the 100 year storm flood water height. Lenders impose the mandatory flood insurance requirement. Base Flood Elevation ( BFE ): FEMA established 100 yr flood water height.

Flood Zone Classifications: High Risk Zones ( 100 yr ): A,AE,AH,AO,AR,A01-A30, A99, V,VE,V01-V3 Moderate Risk ( 500 yr ): X-Shaded, B Low Risk: X-Unshaded, C Unmapped areas: D

FIRM Overlay: Red is AE flood zone (SFHA) Pink is X-Shaded flood zone (non-SFHA)

Background Information: We are a collection of companies that offer the most comprehensive portfolio of flood risk related services in the insurance and risk management industry. Our clients own and operate over 4 million apartments over 30,000 shopping malls, office buildings, retail plazas and industrial parks, as well of thousands of single-family homes, townhouses and condominiums.  For more than a decade we have served commercial property owners and condominium owners. Our companies have received accolades from FEMA, Wright Flood ( FKA Fidelity National Flood ) and other prestigious organizations for our superior knowledge and capabilities relating to the flood risk peril.

Services: Flood Zone Correction Service Flood Map Revision Service Flood Premium Reduction Service Lender Release Service Portfolio Review Service Elevation Certificate Coordination Flood Brokerage Development Consulting

Flood Zone Correction Service: For inland buildings (non V zone) Goal is to reclassify the building into a more favorable flood zone classification Use FEMA’s MT-1 Letter Of Map Change (LOMC) Program, which assumes the zones and BFE on the FIRM are correct Compare the building to zone and BFE on FIRM plus data included in underlying Flood Insurance Study (FIS) Goal is to prove the building has been built in a flood safe manner according to FEMA’s rules and regulations FEMA issues either a Letter Of Map Amendment (LOMA) or Letter Of Map Revision – Based on Fill Dirt (LOMR-F) 1/20th rule OAS Refund eligibility

Flood Map Revision Service: Applies to coastal buildings (in V zones) Goal is to redraw the flood map so that the building becomes located in more favorable zone Use FEMA’s MT-2 Map Revision Process to prove the zones and BFE on the FIRM are wrong and to redraw the map Perform complicated coastal flood studies to determine where zones should start and stop and what the BFE should be for each zone FEMA issues a Letter Of Map Revision (LOMR) that includes a revised FIRM Refund eligibility

Flood Premium Reduction Service: Applies to inland and coastal buildings Evaluate the current rating of the NFIP flood policy to determine if less expensive rates are available Evaluate the current NFIP policy implementation to determine the optimal risk transfer strategy for construction type. If yes, work with agent and carrier to re-rate the NFIP policy to take advantage of lower rates Refund eligibility

Lender Release Service: Applies to inland and coastal buildings Goal is to eliminate unwarranted flood insurance requirement imposed by lenders May or may not include obtaining a LOMA or LOMR Prove that building is not in a Special Flood Hazard Area (SFHA) so the lender eliminates the flood insurance requirement Refund eligibility

Portfolio Review Service: Applies to inland and coastal buildings Develop an accurate foundation of flood data upon which complete risk informed decisions can be made Deliver current zone, future zone if available, and levee identification Future FEMA flood map change tracking – only company in nation with this capability Goal is to prevent uninsured or underinsured flood losses and to deliver data to aid in future decision making and budgeting

Elevation Certificate Coordination: Recently at an NFIP conference FEMA stated nearly half ( 50%) of all elevation certificates are wrong due to some type of error or omission made by the surveyor PECN is a national network or surveying and engineering firms In house mapping specialist In house surveyors In house engineers Provide second level of compliance analysis for all non site visit data on all elevation certificates

Example Elevation Certificate:

Flood Brokerage: CRIO Flood Advantage® CRIO serves as a true “one-stop-shop” for all flood-peril needs CRIO offers a proprietary research-driven underwriting process Future flood map tracking Finger on the pulse of NFIP regulations changes/implementation Flood zone determinations Flood insurance rating options Annual (Flood Risk Analysis) vs. standard renewal process

Development Consulting: Goal is to help developers build in a flood safe manner according to FEMA’s rules and regulations to prevent flood damage and minimize flood insurance costs. Analysis of building plans. CLOMR processing. Help clients understand the implications of their building designs in terms of qualifying for flood zone correction as well as impacting their cost of and access to flood insurance.

Letter Of Map Amendment ( LOMA/ LOMR-F) MT-1 Program: FEMA established program allowing building owners to dispute Flood Zone Designation Geographic challenge – (OAS) LOMA Construction type challenge – ( Removal ) LOMA Fill dirt – (Removal ) LOMR-F

Conditional Letter of Map Revision ( CLOMR ): Pre-construction opinion from FEMA on construction plans Can be converted to a LOMR-F upon completion of construction if built to same specifications Helpful to obtain loans from HUD

LOMA Example:

Letter Of Map Revision ( LOMR ) MT-2 Program: Based on scientific method and facts supported by technical analysis Physically changes the Flood Insurance Rate Map ( FIRM ) Flood zone delineation lines move Base Flood Elevations ( BFE ) change Refund eligibility

LOMR Example:

Coastal Image:

Biggert-Waters Flood Insurance Reform Act of 2012: Signed by President Obama on July 6, 2012 Notable Major Changes Required by the Act Five Year Reauthorization of NFIP through September 30, 2017 Increases the Annual Cap on Premium Increases from 10% to 20% Phase Out Subsidized (pre-FIRM) Rates Phase Out Grandfathered Rates Increase Building Coverage Limit to $500,000 from $250,000 for Multifamily Buildings (5+ Units) Increase Deductibles for Some Policy Types Establish Reserve Fund for Catastrophic Loss Years Increase Penalties on Lenders for Non-Compliance Protect Condo Unit Owners’ Right to File Separate Claims Authorize Reimbursement for Flood Zone Correction Costs Authorize Pursuit of Private Market Reinsurance for the Program

Biggert-Waters Act: What parts of the Act is FEMA actually implementing? New NFIP flood insurance business vs. Renewals Important Dates: October 1st 2013 and July 6th 2012

Biggert-Waters Act Implementation: Annual cap on rate increases is being raised from 10% to 20% beginning Oct 1, 2013 Initiation of federal reserve fund: additional, non-commissionable 5% fee being added to each NFIP policy. All pre-FIRM policies, regardless of the occupancy class, with the initial NFIP policy effective date on or after July 6, 2012: For pre-FIRM policies where the initial NFIP policy effective date was before July 6, 2012: Non-Residential Buildings/ Single-Family, Non-Primary Residence: Single-Family, Primary Residence / 2-4 Family / Other Residential / RCBAP buildings:

NFIP Statistics: source: www. FEMA NFIP Statistics: source: www.FEMA.gov/policy-claim-statistics-flood-insurance As of 1/31/2013: Total Number of Policies In-Force: 5,565,807 Total Premium: $3,592,476,941 Total Claim Payments Since January 1, 1978: $45,533,821,110

NFIP Statistics source: www. FEMA NFIP Statistics source: www.FEMA.gov/policy-claim-statistics-flood-insurance

NFIP Statistics source: www. FEMA NFIP Statistics source: www.FEMA.gov/policy-claim-statistics-flood-insurance

NFIP Statistics source: www. FEMA NFIP Statistics source: www.FEMA.gov/policy-claim-statistics-flood-insurance NFIP Program – Growth in Number of Policies 1978 Policies in Force = 1,446,354 1980 Policies in Force = 2,103,851 1990 Policies in Force = 2,477,861 2000 Policies in Force = 4,369,087 2010 Policies in Force = 5,645,436 2012 Policies in Force = 5,629,396 Policy count has decreased in last few years, which is a new trend for the NFIP.

NFIP Statistics suorce: www. FEMA NFIP Statistics suorce: www.FEMA.gov/policy-claim-statistics-flood-insurance Top 5 States by Premium ( as of 1/31/13 ) Florida - $1,028,047,823 Texas - $362,000,608 Louisiana - $348,566,795 California - $208,767,724 New Jersey - $223,387,257 These top 5 states represent: 61% of all written premiums in-force, 64% of the polices in-force, 68% of all insurance coverage limits in-force. Top 5 States by Total Claims Payments ( 1/1/78 – 1/31/13 ) Louisiana - $16,605,074,851 Texas - $5,529,254,671 Florida - $3,697,916,908 New Jersey - $3,200,676,159 New York - $3,051,145,531

Thank You. Questions? Greg Mondello gmondello@floodzonecorrection.com Account Executive Cell: (561)-602-9175 Office: (877-356-6396), ext. 121 gmondello@floodzonecorrection.com www.crio.com www.floodzonecorrection.com www.floodrisksolutions.com