1. Prepared by National Flood Services Flood Insurance It’s more than just a lender requirement – don’t get left behind… 1

2. Prepared by National Flood Services Proprietary & Confidential History of the NFIP  Congress established the NFIP with the passage of the National Flood Insurance Act of 1968 2

3. Prepared by National Flood Services Proprietary & Confidential History of the NFIP  The Federal Emergency Management Agency (FEMA) administers the NFIP  Participation in the NFIP is based on an agreement between local participating communities and the federal government  Community agrees to implement and enforce floodplain measures (ordinances and laws) to reduce future flood damage to new construction in Special Flood Hazard Areas  Everybody lives in a flood zone 3

4. Prepared by National Flood Services Proprietary & Confidential History of the NFIP  The Standard Flood Insurance Policy is available through WYO companies and through the NFIP Direct  Write Your Own (WYO) Program began in July 1983  The rates and regulations are set by the federal government and approved by Congress 4

5. Prepared by National Flood Services Proprietary & Confidential History of the NFIP  National Flood Insurance Act of 1968  Flood Disaster Protection Act of 1973  Coastal Barrier Improvement Act of 1990 and Coastal Barrier Resources Act  National Flood Insurance Reform Act of 1994  Flood Insurance Reform Act of 2004 was enacted June 30, 2004 5

6. Prepared by National Flood Services Proprietary & Confidential History of the NFIP  Biggert-Waters NFIP Reform Act was signed into law on July 6, 2012 -Implementation began on January 1, 2013 -Extends the Program for 5 years while requiring significant program reform  Homeowner Flood Insurance Affordability Act was signed into law on March 21, 2014 -Implementation began on October 1, 2014 -Focus on implementing recent law by adjusting premium increases, issuing new rates and map updates, supporting mitigation and ensuring advocacy to connect policyholders with the information they need to better understand the program 6

7. Prepared by National Flood Services Proprietary & Confidential Changes, changes, and more changes 7

8. Prepared by National Flood Services Proprietary & Confidential Changes  April 2015 Changes - Rate Changes - Reserve Fund Assessments 15%/PRP 10% - Annual Surcharge $25 primary residence/$250 all other - Substantially Damaged/Improved Structures 25% increase - Property Newly Mapped into SFHA - Federal Policy Fee changes - Minimum Deductibles and Increased Option Deductibles 8

9. Prepared by National Flood Services Proprietary & Confidential Changes  Full-risk rates in our future Subsidized rates are offered for Pre FIRM buildings (built before 12/31/1974 or before the effective date of the initial FIRM whichever is later) Pre-FIRM buildings can be rated using full-risk rates if more favorable to the property owner Subsidized premium rates will be phased out over time through annual premium increases Once it is determined that full-risk rating will provide a lower premium, a policy may be endorsed for the current policy year only to obtain a lower rate. 9

10. Prepared by National Flood Services Where it rains…it can flood Covered losses are paid through the National Flood Insurance Fund 10

11. Prepared by National Flood Services Proprietary & Confidential Rating Basics  Ratemaking: subsidized and actuarial also known as Full- risk rates  Subsidized rates – based on general rating factors (Pre FIRM properties)  Full-risk rates – based on property specific information – there is a rate for most risks 11

12. Prepared by National Flood Services Proprietary & Confidential Community Approval vs Rating 12

13. Prepared by National Flood Services Proprietary & Confidential Community Approval vs Rating 13

14. Prepared by National Flood Services Proprietary & Confidential Community Approval vs Rating  Submit-for-Rate -Rates used for Post FIRM non-compliant structures  Documentation required includes a Community issued a variance  If no variance was granted, a signed statement from the agent or applicant that no variance was granted is acceptable  Variance or no variance does not impact rate  FEMA Mitigation utilizes this information to determine if communities are complying with the NFIP Floodplain Management Ordinance for Post FIRM structures 14

15. Prepared by National Flood Services Proprietary & Confidential Variance Chart 15

16. Prepared by National Flood Services Proprietary & Confidential Variance Chart 16

17. Prepared by National Flood Services Proprietary & Confidential Resources 17 FEMA Homeowner Flood Insurance Affordability Act http://www.fema.gov/media-library-data/1396551935597- 4048b68f6d695a6eb6e6e7118d3ce464/HFIAA_Overview_FINAL_03282014.pdf FEMA Flood Insurance Reform – The Law Informational links to the laws passed: https://www.fema.gov/flood-insurance-reform-law FEMA Flood Insurance Reform – Resources for Property Owners and Renters, Insurance Agents, Real Estate Agents and Community Officials: https://www.fema.gov/flood-insurance-reform-resources-property-owners-and-renters- insurance-agents-real-estate-agents-and FloodSmart.gov https://www.floodsmart.gov/floodsmart/pages/flooding_flood_risks/ffr_overview.jsp

18. Prepared by National Flood Services Proprietary & Confidential Contact List Amy Itschner Compliance Manager 1.888.888.2169 x2704 Amy.Itschner@nationalfloodservices.com Connie Floria Team Lead Training Specialist 1-888-888-2169 x1210 Connie.Flora@nationalfloodservices.com 18