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IL N 177 09 12 CALIFORNIA PREMIUM REFUND DISCLOSURE NOTICE In accordance with CAL. INS. CODE § 481.(c), we are notifying you that in the event that the first Named Insured cancels the insurance policy, we shall retain 10% of the unearned premium. The premium refunded to you will therefore be calculated as 90% of the pro rata unearned premium. But if cancellation takes place during the first year of a multiyear prepaid policy, we will return 90% of the pro rata unearned premium for the first year and the full annual premium for the subsequent years. If you have an Equipment Breakdown policy or your policy contains an Equipment Breakdown Coverage Part, then the following premium refund calculation applies instead of that provided in the preceding paragraph. For the Equipment Breakdown policy premium or for the premium attributable to the Equipment Breakdown Coverage Part, we shall retain 25% of the unearned premium. The premium refunded to you will therefore be calculated as 75% of the pro rata unearned premium. But if cancellation takes place during the first year of a multiyear prepaid policy, we will return 75% of the pro rata unearned premium for the first year and the full annual premium for the subsequent years. However, the penalties set forth in the preceding paragraphs will not apply under the following circumstances, even if the first Named Insured cancels the policy: 1. The Insured(s) no longer has a financial or insurable interest in the property or business operation that is the subject of insurance; 2. Cancellation takes place after the first year for a prepaid policy written for a term of more than one year; or 3. The policy is rewritten in the same insuring company or company group. IN Risk MOuEemmtDtxstnn - REVIEWED&AppR Sr OW� Risk Management speoarist Of IL N 177 09 12 © Insurance Services Office, Inc., 2012 Page 1 of 1