State of Alabama Department of Finance Division of Risk Management Kim Huggins Claims Manager

ALABAMA April 27, 2011

The State Insurance Fund Originated in 1923 to insure state owned properties, K-12 school systems and state university properties 28,000 +/- building/structures surveyed every three years by in house staff At FY10 close, $46 Billion insured values Claims are handled by in house staff and/or independent adjusting firms on contract with SIF.

State of Alabama 2011 Property Program One Reinsurer provides $250M x/o $750M Excess Capacity One Reinsurer provides $250M x/o $500M Excess Capacity Three Reinsurers provide $300M x/o $200M Excess Capacity Nine Reinsurers provide $100M x/o $100M Seven Reinsurers provide $50M x/o $50M Six Reinsurers provide $50M x/o SIR S.I.R.= $3.5M All Other Perils Occurrence/$10M Named Storm Occurrence/ $10 M Annual Aggregate $1 B $750M $500M $200M $100M $50M $3.5M

Statewide Impact of April 27, Tornados - 3 EF EF EF Deaths $3 Billion In Insured Losses 120,000 Claims

Historic Tornado Outbreak April 27, 2011

IMPACT OF APRIL 27, 2011 ON SIF $110M Reserved 588 Claims 215 Locations 8 Exceeding $5M 6 K-12 Schools 1 Community College 1 State Park 10 Exceeding $1M

Hackleburg Elementary/High School

Phil Campbell High School

Alberta Elementary School

SIF Comparison of Catastrophe Losses CategoryIvanCat 46 Date of Loss9/16/20044/27/2011 Counties Impacted5333 Agencies Impacted10260 Locations Impacted Number of Claims Amount of Loss$30 Million$110 Million Location Claims $5M +18 Location Claims $1M +310

Summary Analysis  Ivan was a Category 3 Hurricane Impacted a large portion of Alabama Major damage to only a few locations  Cat 46 was a series of EF 3, 4 & 5 Tornadoes Impacted a large portion of Alabama Major damage to a large number of locations

ISSUES

Coordination  Coordination with Excess Carriers Assignment of the lead adjuster Third Party Experts  Engineers  Estimators  Accountants  Salvagers Broker’s Role.

Communication  Communication with SIF Policy Holders Role of Risk Management Immediate and Clear Instruction Availability of Advance Funds.

Independent Adjusters  Role of Independent Adjusters Our Representative Works with Excess Adjusters and Experts Directs and Manages Claim

Delays  By Excess Experts to Provide Building Estimates Scopes  By SIF Policyholders to Initiate Emergency Restoration due to State Bid Law rules.

On A Positive Note  Our Broker helped us resolve issues quickly and is currently working with excess on specific guidelines to follow after a CAT Loss  Our Independent Adjusters remained loyal to the SIF  The SIF made advance funds immediately available to hardest hit locations.

ALABAMA Department of Finance Risk Management Division Questions?