Maximum Service Protection (MSP) Accounting Overview Module 2 v.1 – May 2019

Agenda Program Overview Introduction to MSP Processes Declaration Page Accuracy & Rejections Tax Application, Reporting and Remittance Monthly Remittance Process Statements/Reporting Cancellations   Resource Information Resources Contact Information Questions?

Program Overview 3

Introduction to MSP MSP covers a new or pre-owned vehicle in the event of mechanical breakdown The program is marketed by MDA Services Ltd. and administered and underwritten by American Bankers Insurance Company of Florida For more detailed information, refer to Module 1 or the MSP Operations Manual Refer to the MSP Operations Manual for further details:   Pages: 3 – 6

Processes

Declaration Page Accuracy & Rejections Incomplete declaration pages will be sent back for updates with a deadline to send back required information Dealer initials are required for all updates made to the declaration page Policyholder initials will be required depending on what information is missing/incomplete: Red – Requires both customer and dealership initials on updates made Yellow – Requires dealership initials only on updates made Refer to the MSP Operations Manual for further details:   Pages 29-30

Declaration Page Accuracy & Rejections   If required information is not received prior to deadline set, the contract will be rejected: F&I managers will be notified of a rejected contract via email Rejected contracts will appear on the dealer monthly statement under the section titled “Contracts Not Processed” The amount remitted for the rejected contract will be credited on the monthly statement sent to the dealership The accompanying dealer cost & applicable taxes will need to be resubmitted with the updated contract the following month Refer to the MSP Operations Manual for further details:   Pages 29-30

Tax Application, Reporting & Remittance The sale of the MSP product attracts tax at the retail level in all provinces & territories: Province GST/HST PST British Columbia 5% N/A Alberta Saskatchewan 6% Ontario 13% Yukon PST (Saskatchewan only) The dealership is responsible for reporting & remitting the PST based on the consumer retail price to the applicable government authority GST/HST (British Columbia, Alberta, Saskatchewan, Yukon and Ontario) The dealership is responsible for reporting & remitting the GST/HST based on the dealer commission portion of the MSP sale to the applicable government authority The dealership is responsible for reporting & remitting the GST/HST based on the dealer net cost to MDA (included in the monthly remittance) Refer to the MSP Operations Manual for further details:   Page 16

Tax Application, Reporting & Remittance Tax Exempt Customers Retail Cost Customers who provide proof of exemption (eg Native Status Card or other government authorized validation) should not be charged tax on the retail cost of MSP product Dealer Net No tax is applied to the dealer net cost which should be reflected on the MSP Remittance form A copy of the Status Card or Authorized Government ID must be submitted with the monthly remittance package Refer to the MSP Operations Manual for further details:   Page 16

Monthly Remittance Process Compile MSP Declaration Pages On the 1st day of the month, gather all MSP Declaration Pages sold in previous month Only the MSP and MDA copies of the Declaration Pages are to be submitted to MDA within the remittance package Complete MSP Remittance Form Complete all fields on the MSP Remittance Form Mail Remittance Package Include a cheque for the “Amount Due MDA” made payable to MDA Services Ltd. Mail the remittance package including, Declaration Pages, remittance form and cheque to: MDA Services Ltd. (Suite 220, 9440 – 49 Street NW, Edmonton, Alberta T6B 2M9) Please open the MSP Operations Manual to page 26 which goes into the remittance process in more detail. There is a sample of the remittance form displayed on page 27 and detailed instructions are listed on page 28. Monthly remittance packages are due at the MDA Services Ltd. office by the 5th business day of every month.

Statements and Reporting The following report is sent to the dealership monthly: Dealer Statement SOA (Statement of Activity) CMA (Current Months Activity) These reports list MSP policies sold and cancelled The reports also list policy type, fees and dealer commission Cheques paid to and received from the dealer will also show on this reporting Refer to the MSP Operations Manual for further details:   Page 36

Cancellations and Refunds Cancel with full refund within 30 days (with no claims) With claims - The refund will be calculated pro-rata, less any claims paid and a cancellation fee of $75.00 charged to the customer Pro-rated refund if cancelled after 30 days, less any claims paid + cancellation fee of $75.00 Dealer is required to submit a cancellation form to Assurant to commence cancel and refund process If applicable, dealer net cost portion of the refund will be issued and settled on monthly reporting sent to accounting Refer to the MSP Operations Manual for further details:   Pages 21-24

Resource Information 13

Resources MSP Operations Manual A comprehensive document providing detailed coverage information for the MSP product as well as the associated administrative processes MDA Services Ltd. Website www.mdaservicesltd.com - key documents including: Forms  Cancellation, Remittance, Transfer & Waiver MDA District Manager Your assigned MDA District Manager is available to answer your questions and provide access to the MDA website

Email Address/Fax Number Contact Information Related Inquiry Who to Contact Phone Number Email Address/Fax Number General questions relating to the product Assigned MDA District Manager Use contact information for assigned MDA District Manager Monthly remittance questions MDA Services Ltd. 1-780-440-9339 Or 1-800-661-6926 (M-F 8:00am–4:30pm MT) Fax: 1-780-469-5433 Where to send monthly remittance (Including completed declaration pages) 9440 – 49 Street NW, Suite #220 Edmonton Alberta T6B 2M9 N/A Refer to page 37 of the MSP Operations Manual for further details regarding contact information

Questions?