GENERAL RULES. Purpose. Definitions

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December 8, 2020 GR-1

GENERAL RULES

Purpose

The Louisiana Citizens Property Insurance Corporation was formed in accordance with provisions of Louisiana R.S. Title 22, Subpart B, Section1430 to operate the FAIR and Coastal Plans which shall function exclusively as residual market mechanisms to provide Essential Property Insurance for residential and commercial property in Louisiana solely to applicants who are in good faith entitled, but are unable to procure insurance through the voluntary market.

Definitions

A. Personal Lines Application Package means a properly completed application with signatures of the insured and Producer; a properly completed Loss Settlement supplement form with signatures of the insured and Producer; and a Louisiana Citizens MS&B which must be completed via the link from the EPIC main page for the following policy types: DWG-2, DWG-3, HO-2, & HO-3.

B. Coastal Plan means the successor to that program amended and permanently established by Act 35 of the 1970 Regular Session of the Louisiana Legislature to provide a residual market for adequate insurance on property in the Coastal Plan Designated Areas of the state, now available as a program of the Louisiana Citizens Property Insurance Corporation.

C. Coastal Plan Designated Areas means all of that area of the state defined as Coastal Plan in the territorial definition of this Manual. Eligible risks in the designated Coastal Areas shall be eligible for Coverage in the Coastal Plan.

D. Commercial Application Package means a properly completed application with signatures of the insured and Producer; a properly completed supplemental application form with signatures of the insured and Producer; at least two (2) color photographs of all sides and the roof of each property to be covered under the policy; a tie-down certificate.

E. Coverage means insurance in the Coastal Plan or FAIR Plan as required pursuant to the Statute to be offered by the Corporation.

F. Department means the Louisiana Department of Insurance.

G. Emergency Assessments mean all Assessments which the Governing Board is authorized to levy pursuant to the Statute, to be collected by Assessable Insurers and the FAIR and Coastal Plans, and collected from Assessable Insureds, upon the issuance or renewal of policies for Subject Lines of Business in accordance with Section 17 of the Louisiana Citizens Property Insurance Corporation Plan of Operation.

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H. Essential Property Insurance means any of the following coverages against direct loss to property:

1. Fire, with or without extended coverage and vandalism and malicious mischief thereon;

2. Windstorm and hail without fire, but only with respect to dwellings and commercial properties on a monoline basis;

3. Homeowners.

I. FAIR Plan means the successor to that program established by Act 424 of the 1992 Regular Session of the Louisiana Legislature, and designated as the Fair Access to Insurance Requirements Plan to provide a residual market for adequate insurance on property in the state, now available as a program of the Louisiana Citizens Property Insurance Corporation.

J. FAIR Plan Designated Areas means all of that area of the state defined as FAIR Plan in the territorial definition pages of this Manual. Eligible risks in the designated FAIR Plan Area shall be eligible for Coverage in the FAIR Plan.

K. Governing Board means that Governing Board of Directors which is established under R.S.

22:1430.3 and where appropriate, any appointed designee to the Governing Board.

L. Insurable Property means real and tangible personal property at a fixed location in Louisiana when such property is in an insurable condition and basic property insurance is not obtainable in the voluntary market.

M. Louisiana Citizens, LCPIC means the Louisiana Citizens Property Insurance Corporation, and includes the residual market insurance programs known as the Coastal Plan and the FAIR Plan.

N. Market Equalization Charge means the surcharge which the Governing Board is authorized to levy on all FAIR and Coastal Plan policies pursuant to the Statute, to be collected by the FAIR and Coastal Plans, and collected from Assessable Insureds, upon the issuance or renewal of policies for Subject Lines of Business in accordance with Section 16 of the Louisiana Citizens Property Insurance Corporation Plan of Operation.

O. Plan of Operation means the document setting the rules of operation of the Corporation, as promulgated by the Governing Board and approved by the Louisiana Senate Committee on Insurance and the Louisiana House Committee on Insurance.

P. Plan(s) means the FAIR Plan and/or the Coastal Plan.

Q. Producer means any person licensed as a property and casualty Producer by the State of Louisiana.

R. Property Insurance Association of Louisiana (PIAL) means one of the organizations designated by the Louisiana Citizens Property Insurance Corporation to make inspections of properties insured by its Plans and to perform such other duties as may be authorized.

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S. Statute means Louisiana Revised Statutes.

T. Subject Lines of Business means the following lines of business: fire, allied lines, homeowners multi-peril, and the property insurance portion of commercial multi-peril policies.

U. Tax Exempt Surcharge means the additional amount equal to the premium tax provided for in R.S. 22:1065 which Louisiana Citizens is authorized and required to collect under the provisions of R.S. 22:1430.12(B). This fee is charged on all premium transactions and is subject to a pro-rata refund if the policy is cancelled or endorsed to a lower premium.

Who May Apply

Any person having an insurable interest in real or tangible property at a fixed location in Designated Eligible Areas may submit an application to Louisiana Citizens directly or through a representative authorized by the applicant.

Eligible Property – General

Real and tangible personal property at a fixed location in a Designated Eligible Area of Louisiana;

when such property is in an insurable condition and meets all eligibility requirements as set forth by Louisiana Citizens and Essential Property Insurance Coverage is NOT obtainable in the voluntary market.

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Ineligible Property – General

A. Motor vehicles.

B. Manufactured Homes (Mobile Homes), NOT in compliance with Appendix H of the Standard Building Code in regard to Piers, Tie-Downs and Ground Anchor requirements. For the purpose of this manual, manufactured or mobile home means a manufactured structure, transportable in one or more sections, which is not more than eighteen (18) feet wide, nor less than thirty-two (32) feet long, built on a permanent chassis and designed to be used as a dwelling with or without permanent foundation.

C. Structures in whole over water or structures partially over water.

Exception to Part C: Under dwelling form DWG-1, fire and extended coverage can be provided on structures that are easily accessible by emergency vehicles by land. If the structure is not easily accessible by three (3) sides, Coverage can be provided at Protection Class 10 Fire rates and the applicable Extended Coverage rate for the Territory/Zone in which the risk is located. Flood Insurance Coverage must be in full force and effect throughout the term(s) of the policy.

D. Property that is accessible by boat only.

E. Vacant/unoccupied property. (Note: Commercial multi-family or multi-occupancy properties must be at least fifty percent (50%) occupied.)

F. Property with characteristics of ownership that is in violation of law or public policy.

G. Property that is under repair or renovations; unless the coverage is written as a Builders Risk Renovations Policy.

H. Contents of ineligible properties.

I. Property of an insured that has failed to pay any earned premiums or other valid charges owed to Louisiana Citizens Property Insurance Corporation.

J. Additional restrictions for Coverage are outlined in the Dwelling Fire Program, Homeowners Program, and Commercial Program sections of this Manual.

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Operations

All communications in matters pertaining to Louisiana Citizens Property Insurance Corporation should be mailed to:

Mortgage Bill and General Mail:

Louisiana Citizens Property Insurance 1 Galleria Blvd, Suite 720

Metairie, LA 70001

Payment with remittance form:

Louisiana Citizens Property Insurance Dept 2444

PO Box 11407

Birmingham, AL 35246-2444 Payment without remittance form:

Louisiana Citizens Property Insurance LB#6370

PO Box 11407

Birmingham, AL 35246 Overnight Payments:

Louisiana Citizens Property Insurance

Attn: Wholesale Lockbox Department/Box 6370 2090 Parkway Office Circle

Birmingham, AL 35244

Telephone (504) 831-6930 Toll Free (888) 568-6455 Fax (504) 831-6676

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Hurricane Underwriting Restrictions

LCPIC will not accept applications for new coverage, nor will endorsements for increased coverage be bound, written or issued, or monies accepted for such coverage, regardless of the proposed effective date of coverage, when a Tropical Storm or Hurricane Watch or Warning has been issued by the National Weather Service for any part of the State of Louisiana. The

management staff of LCPIC reserves the right to withdraw binding authority at any time.

Notifications that binding authority restrictions have been implemented will be posted on the LCPIC website.

System limitations when binding authority restrictions have been implemented:

Personal Lines:

EPIC will not allow the user to fully complete an application. The Quote can be completed through the “Policy Submission” screen; however, only the “Save Policy – Not Ready to Process” option will be available. In addition, on this screen, a red-highlighted message will appear indicating that there are Hurricane Restrictions currently in place.

Commercial Lines:

EPIC will only allow the user to access the Create Commercial Lines Quote. The user will be allowed to complete the application and quote but not submit.

Binding of Coverage will resume when the National Hurricane Center of the National Weather Service designates that the weather system is no longer a threat to Louisiana.

Rates

Rates shall be in accordance with rating Plans approved by the Louisiana Department of Insurance for use by the Louisiana Citizens Property Insurance Corporation.

Premiums

A. Premiums are payable to Louisiana Citizens Property Insurance Corporation by check, credit card or money order. (Cash, prepaid credit cards (gift cards), counter checks, temporary checks and travelers’ checks are not acceptable methods of payment.) Checks returned by the bank due to non-sufficient funds (NSF) will be charged a fee by Louisiana Citizens and a second NSF check from the same payee may result in Louisiana Citizens refusal to accept further personal checks or Producer checks from the payee.

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B. Payment should be received by Louisiana Citizens before Coverage can be effective.

Payments may be made in person at the Producers office or by mail on completed applications.

The $65 non-refundable application fee must be paid electronically in the producer’s office.

C. A minimum down payment of 25% of the premium, 100% of the Emergency Assessment, Market Equalization Charge & Tax Exempt Surcharge, and $65 non-refundable application fee is due at the time of policy submission.

D. EPIC allows the collection and uploading of premium in the Producer’s office or on our website www.lacitizens.com.

– EFT/ACH – A check from the Insured or Producer may be uploaded to the payment screen.

– Credit Card – A credit card payment may be uploaded by the Producer.

E. Loan Closings

– If a policy is bound for a loan closing where there is a mortgage company and the mortgage company is the payer, you have the option of uploading the $65 non- refundable application fee. The uploading of only the non-refundable application fee does not issue a policy, a Coverage Confirmation Letter will be issued.

– Payment for the remaining premium due must be received in the office of Louisiana Citizens within 14 days of the requested effective date to receive a policy. If the payment is not received within 14 days of the requested effective date the Coverage Confirmation Letter expires and no coverage is provided.

F. If the insured elects to use independent premium financing, one hundred percent (100%) of the gross annual premium and all applicable fees must be submitted with a legible copy of the premium finance agreement.

ACH/EFT (Automated Clearing House/Electronic Funds Transfer) and Credit Cards

 The insured’s authorization is required each time an ACH/EFT & Credit Card is entered. Print the Electronic Funds Transfer Authorization Form or Credit Card Authorization Form to capture the insured’s signature prior to scanning and uploading the form into the EPIC System.

 Only Personal Checks will be accepted. Third Party or mortgage company checks should not be used with ACH/EFT transactions.

Visa, MasterCard, & Discover may be used. We do not accept American Express, Visa gift cards, and any pre-paid credit cards.

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Application Processing Fee

A non-refundable application processing fee of sixty-five dollars ($65.00) applies to all new applications submitted to Louisiana Citizens. This fee shall not be considered premium and shall be considered fully earned and non-refundable regardless of the ultimate determination of the eligibility of the property. Commission shall not be paid on this application processing fee.

The Insured’s producer shall collect this fee in full from the applicant at the time of completion of the Louisiana Citizens application.

Direct Bill Payment

A. All policies are eligible for the four payment Plan. The applicant/insured has the option to remit one hundred percent (100%) of the annual policy premium or a down payment of twenty five percent (25%) of the annual policy premium, plus one hundred percent (100%) of the sixty-five dollars ($65.00) application processing fee(non-refundable), one hundred percent (100%) of the Tax Exempt Surcharge and, if applicable, one hundred percent (100%) of the Market Equalization Charge and/or one hundred percent (100%) of the Emergency Assessment. If the optional 4 installment payment Plan is chosen the remaining balance will be billed in three (3) equal installments. The billing due dates will be sixty (60) days, 150 days, and 240 days from the inception date of the policy.

B. To avoid cancellation of a policy for non-payment of premium, the payment must be received in the Louisiana Citizens office prior to the cancellation date of the policy. Note: Louisiana Citizens reserves the right to require payment in full for the remaining balance on policies where payments have not been received by the due date.

C. A six dollar ($6.00) service fee on Personal Lines policies and a ten dollar ($10) service fee on Commercial Lines policies will be charged on each of the three (3) remaining installments. No commissions are paid on this service fee. No service fee will be due on full pay policies or the down payment installment on new or renewal policies. All payments must be submitted on a gross premium basis; commissions may not be deducted from payments remitted to Louisiana Citizens.

D. For new applications where the premium is to be escrowed by a lending institution a minimum down payment as described in A. above is required when the application is submitted. The remaining balance can be billed in full to the lending institution. For renewals, Louisiana Citizens will bill the lending institution the full premium amount, if requested by the insured.

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Commissions

A. Any Producer licensed to write property insurance in Louisiana is eligible to submit business to Louisiana Citizens. Producers must submit a copy of their current Louisiana Property and Casualty License or a Letter of Certification from the Louisiana Department of Insurance when applying as a new Producer. Additionally, a complete and signed Internal Revenue Service Form W-9 (Request for Taxpayer Identification Number and Certification) must be submitted.

The Form W-9 should contain the exact name and taxpayer identification number that will be used to report the commission income to the IRS. Any changes to the information on the Form W-9 must be submitted on a new Form W-9 and accompanied by a letter of explanation on the Producer’s letterhead.

B. Each Producer must read and accept the Subscriber Agreement.

C. Each Producer must provide a copy of the Louisiana Property and Casualty License or a Letter of Certification from the Louisiana Department of Insurance each time the license is renewed.

D. Commissions equal to ten percent (10%) of the collected policy premium shall be paid to the Producer of record. (Commissions are not paid on non-refundable fees or policy surcharges.) This rate shall be subject to change as determined by the Louisiana Citizens Governing Board of Directors and approved by the Louisiana Department of Insurance. The Producer will receive a monthly statement of commission earnings. A check will be issued only if a commission is due.

E. In the event of cancellation of a policy, or if an endorsement is issued which requires a return premium, the Producer’s commission statement will be adjusted for return commissions at the same rate at which such commissions were originally paid. If no commissions are payable to the Producer to offset the return commission due, the Producer must remit the pro-rata return commission to Louisiana Citizens FAIR or Coastal Plan.

F. In the event an endorsement is issued which requires an increase in the policy premium, the Producer’s commission statement will be adjusted for the increase in premium accordingly.

Procedures for Submitting Applications & Binding Coverage

A. Application for Insurance

1. A complete Application Package may be submitted directly by the property owner or by the owner’s representative

2. When the applicant appoints a representative to submit an application, Louisiana Citizens will discuss the application information only with the applicant’s Producer of record. If

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the applicant requests that Louisiana Citizens communicate with a party other than the Producer of record, the applicant must provide a signed letter of record authorizing release of information to that party.

3. The Producer of record must complete the portion of the application requiring the Producer’s license number, expiration date, and signature.

4. All applicable items in the Application Package must be completed in detail and must be legible and accurate. Complete and readable information is important in processing an application.

5. The application and supplement(s) must be signed and dated by the insured and the Producer. Only applications and supplements with signatures are acceptable. The completed personal lines application package must be uploaded to the EPIC system within 17 days of the policy’s effective date to avoid cancellation of the policy.

6. Commercial Lines applications require color photographs of all sides and the roof of each structure to be insured, and each structure containing property to be insured. Photographs are also required when an endorsement is requested adding new buildings/locations. The photographs must be at least three (3) inches by three (3) inches and must have been taken in the last sixty (60) days. The roof, the type of construction, and the physical condition must be clearly visible in each photograph. Additional photographs may be required by the underwriting to prevent the cancellation of the policy.

7. On the following policy types we require a Personal Lines Louisiana Citizens MS&B, completed via EPIC, to be submitted with the application package: HO2, HO3, DWG2, and DWG3.

8. Commercial Applications should be uploaded in the EPIC system under the corresponding document type; application, supplement, photographs (per location), Louisiana Citizens MS&B(s) (per location), and Premium Finance Agreement if applicable. If the risk is a Condominium Association, a copy of the Condominium Association bylaws should be uploaded.

B. Commercial Lines Program

1. The applications for Commercial Lines Insurance Coverage are currently being submitted through the EPIC system. EPIC will allow you to issue a Coverage Confirmation Letter or a policy.

2. Coverage Confirmation letters are valid for 7 days after the effective date.

3. The completed application package should be received by Louisiana Citizens 10 days after the effective date.

The Hurricane Underwriting Restrictions take precedence over the above.

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C. Dwelling or Homeowners Procedures

For dwelling (1-4 families) or Homeowners (1-4 families), an Application Package may be submitted for processing by:

1. Following the procedures in the General Rules Section: Application for Insurance and obtaining the appropriate premium and other charges via the Louisiana Citizens Website at www.lacitizens.com using the EPIC system.

2. Inspection of the premises may be ordered in accordance with General Rule Section of this manual.

3. Coverage and limits of liability will remain in effect as initially requested once a minimum payments is received unless the insured’s Producer has been notified by underwriting of any change necessary to place Coverage in proper order for continuance. The underwriter will review all applications to be certain the risk as submitted meets the Louisiana Citizens underwriting standards. The insured’s representative will be notified if the risk is ineligible due to its physical condition, as a Direct Notice of Cancellation will be mailed in accordance with state law. The insured’s agent will also be notified if the underwriter requests a change in the limits of liability, Coverage form number, or request for repair. A fourteen (14) day allowance for response to the underwriter will be granted to resolve changes needed. If a response is not received, a Direct Notice of Cancellation will be mailed in accordance with state law. If a change in policy form is required, a new application and supplement signed by the applicant and Producer will be required.

D. CLUE, Inspections, and Rating

1. Once the $65 non-refundable application fee is uploaded into EPIC consumer reports may be ordered. This includes but it not limited to an inspection report and a CLUE report.

Personal Lines inspection and CLUE reports will be ordered on all applications.

Commercial Lines inspection and CLUE reports may be ordered on all applications. LCPIC will designate an organization to make the inspections.

2. The inspector must be permitted access to all relevant areas of the property. If access is not permitted Coverage may be declined or cancelled if the policy is already in force.

3. The applicant, or the applicant’s representative, may accompany the inspector during the inspection. The inspector will not point out features of construction, occupancy, or physical hazards which may result in declination of insurance Coverage.

4. Sub-standard condition surcharges may be applied if appropriate. Upon underwriting review, the underwriter will determine applicable sub-standard condition surcharges for dwelling.

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5. The Inspection Report will be on file with Louisiana Citizens and a copy will be made available upon written request of the applicant or the applicant’s representative.

E. Underwriting

1. Applications, inspection reports, and rating details will be examined by the underwriter.

Acceptable Risks are required to meet Reasonable Underwriting Standards.

2. Reasonable Underwriting Standards include but are not limited to the following:

a. The building should be of sound construction with controlled access. Doors and windows should be in place. Roof, wiring, heating, and plumbing should be in good condition.

b. The property must demonstrate acceptable occupancy for the applicable program and evidence reasonable housekeeping and maintenance.

c. The property must have specific characteristics of ownership, condition, occupancy, or maintenance that are legal and in keeping with public policy.

3. The amount of insurance requested, together with other insurance, must be within reasonable relationship to the replacement value or actual cash value of the property involved depending on the policy form requirements. Building valuation guidelines will be established by Louisiana Citizens. An applicant may submit a recognized independent appraisal which will be subject to the acceptance of the underwriting Department. Any and all independent costs will be incurred by the applicant. Dwellings should be insured to a minimum of 80% of MS&B replacement cost with debris removal and a maximum of 120% for DWG2 &3 and HO2 &3. Dwellings insured on DWG-1 and HO-8 should be insured to a minimum of 50% of the MS&B replacement cost with debris removal and a maximum of 120%.

4. Neighborhood or any environmental hazard beyond the control of the property owner shall not be deemed to be acceptable criteria for declining a risk.

5. The Minimum Tie Down Requirements on a Mobile Home are as follows:

a. Number of Tie Downs

i. Extended Coverage Zones 1, 2, & 3

Length of Home Frame Ties and

Anchors Per Side Over Home Ties

Up to 40’ 3 2

41’ to 60’ 5 3

61’ to 80’ 6 3

ii. Extended Coverage Zones 4 & 5

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Length of Home Frame Ties and

Anchors Per Side Over Home Ties

Up to 40’ 4 2

41’ to 60’ 6 3

61’ to 80’ 8 4

iii. Multiple-wide mobile homes shall have diagonal ties and anchors as required above for single-wide mobile homes. No over-the-roof ties shall be required.

b. Anchor

A minimum anchor is an auger (steel screw) at least 6 inches in diameter on a rod that allows the auger to penetrate at least 4 feet into the ground while leaving the eye or tensioning head exposed.

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c. Connectors

i. Galvanized steel strap – 1¼” x 0.035” with tensioning device.

ii. Galvanized or stainless steel cable – 3/8” (7x7 – 7wires each).

iii. Galvanized aircraft cable 1/4” (7x19 – 7 strands of 19 wires each).

iv. Cable ends secured by 2 U-bolt clamps.

v. Steel rods – 5/8” with ends welded closed.

vi. Turnbuckles – 1/2” drop forged-closed eyes.

d. Blocking and Footings

i. Spaced at 10ft. intervals on both frame rails with end footings no further than 5’ from end of home.

ii. Footings of solid concrete 16”x16”x4”.

iii. Blocking of – 8”x8”x16” celled concrete block with cells placed vertically, topped with a solid 4” concrete cap.

iv. Treated shims for leveling.

v. Perimeters of 14’ wide and over, must be blocked adjacent to over-the-home ties.

6. Camps, Seasonal, and Secondary Dwellings

a. Secondary dwellings are not the owner or tenant’s primary dwelling.

b. Seasonal dwellings are dwellings which are continuously unoccupied for a period of thirty (30) or more consecutive days during any one year period.

c. Camps, Secondary, and Seasonal dwellings may be insured only under Louisiana Citizens Dwelling Form DWG – 1.

d. Structures may be insured under the name of a private owner, company, or LLC.

e. If the risk is in a company or LLC there must be a lease agreement between the named insured and the occupying member(s) of the company.

i. The minimum term of the lease agreement must be no less than one year. A copy of the lease should accompany the application.

ii. Proof of interest in the company may be requested from the underwriter.

f. Only the perils of Fire and Extended Coverage are available. V&MM Coverage is not available.

7. Metal Buildings & Converted Commercial Buildings Requirements:

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i. The total square footage of the building and what amount of the square footage is living area.

ii. Solely occupied as a residence.

iii. Occupied on a full time basis.

iv. Owned by an individual.

v. Interior photographs of all areas.

vi. If the square footage includes storage space, and this space exceeds 25% of the total area, the risk cannot be bound. If the storage space is less than 25%

of the total area, we will need the following to consider binding the risk:

 Interior photographs of living area

 Interior photographs of storage area

8. Dwelling Fire Policy Forms - Permitted Incidental Occupancies DWG-E20

a. One of the following incidental occupancies is permitted on properties eligible for coverage under Dwelling Policy, if all conditions are met.

i. Offices, Schools, or Studios meaning offices for business or professional purposes, private schools or studios for music, dance, photography and other instructional purposes.

ii. Small Service Occupancies meaning occupancies primarily for service rather than sales for example, barber or beauty shop, tailor or dressmaker, telephone exchanges or shoe repair shops using handwork only.

iii. Storage of merchandise is permitted if the value of the merchandise does not exceed ten thousand dollars ($10,000.00).

 The amounts of insurance for the contents of the incidental occupancy and merchandise in storage shall be stated as separate contents items in the policy declarations.

 Premium: determine the Coverage C base premium under Section FR – base premium computation using the single key factor for the total amount of insurance for the following.

o Household personal property

o Contents of the incidental occupancy o Merchandise in storage

b. The policy provides insurance under Coverage A, B or C.

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c. The incidental occupancy is operated by the insured who is the owner or a resident of the premises; there are no more than two persons that work in the incidental occupancy and there are no signs advertising the business.

d. DWG-E20 provides personal property coverage for incidental business occupancies, such as offices, schools, studios, small service occupancies, and storage of merchandise valued up to $10,000.

9. Homeowner policy forms - Permitted Incidental Occupancies Residence Premises HO 04 42

a. Coverage for a permitted incidental occupancy is limited under Section I and excluded under Section II. The policy may be endorsed to provide expanded Section I Coverage and Section II Coverage on a permitted incidental occupancy in the dwelling.

b. Use Permitted Incidental Occupancies Residence Premises Endorsement HO 04 42 for Sections I and II Coverage.

c. The following business occupancies are permitted with prior underwriting approval:

i. Offices, Schools, or Studios meaning offices for business or professional purposes, private schools or studios for music, dance, photography and other instructional purposes.

ii. Small Service Occupancies meaning occupancies primarily for service rather than sales for example, barber or beauty shop, tailor or dressmaker, telephone exchanges or shoe repair shops using handwork only.

d. The premises must be occupied principally for private residential purposes.

e. The incidental occupancy must be operated by the insured who is owner and resident.

f. No more than one other person is allowed to work in the incidental occupancy.

g. The insured is not allowed to post any signs and/or advertise the business.

h. The permitted incidental occupancies endorsement also covers personal property pertaining to the permitted incidental occupancy within the Coverage C limits stated in the declarations.

i. HO 04 42 provides coverage on an “other structure” located on the residence premises and used for business purposes. The structure must be described on the application.

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10. Named Insured Homeowner’s Association

a. Personal Lines does not offer coverage when the named insured is a Homeowner’s Association.

i. Coverage should be written in Commercial Lines.

b. Homeowner’s Associations seeking coverage for a guard gate, tennis court, park equipment, pool, Laundromat, community gate and /or subdivision signs can be written in Commercial Lines.

i. A copy of the Homeowner Association By-Laws must be attached to the application package.

c. When an insured is part of a Homeowner’s Association, the coverage can be written in two ways:

i. Owner Occupied

 Coverage can be secured under a HO-2 or HO-3 policy form and written in the name of the insured.

ii. Tenant Occupied

 Coverage can be written under the DWG-1 policy form for the owner which would allow coverage for the structure and minimal coverage for contents.

 Coverage can be written under a HO-4 for the tenant.

11. Named Insured Condominium Association

a. Personal Lines does not offer coverage when the named insured is a Condominium Association (building owner); regardless of the number of units.

i. Coverage should be written in Commercial Lines.

ii. A copy of the Condominium Association By-Laws must be attached to the application package.

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12. Builders Risk

a. Coverage is available only on new structures prior to commencement date of construction. Louisiana Dwelling Property Form DWG – 1 may be used to provide coverage for dwellings in the course of construction for residential purposes. An annual policy will be issued and renewal will not be offered. The amount of insurance will be the completed value of the dwelling.

b. Coverage for contractors is available only under commercial builder’s risk forms and rates.

c. A builders risk commences when building materials are delivered to a job site exclusive of fill dirt and grading of land.

d. Louisiana Citizens may offer one (1) additional renewal for each location upon written request of the insured or producer. The request must be received prior to the expiration date of the current active term.

13. Builders Risk Renovation

a. Occupied / Non Occupied Damaged Property

i. Coverage is available for occupied structures provided that services and utilities have been restored.

ii. May be quoted in EPIC using DWG-1 form for Dwelling Fire or Mobile Home with a mandatory 2% hurricane deductible for the FAIR Plan or a 5%

hurricane deductible for the Coastal Plan and $2,500 minimum all perils deductible.

iii. A signed contract with a licensed contractor or a building permit must be submitted with the application.

iv. Policy term is for one year only.

v. New application must be submitted when construction is complete.

b. Louisiana Citizens may offer one (1) additional renewal for each location upon written request of the insured or producer. The request must be received prior to the expiration date of the current active term.

c. The estimated finished value of the renovated property must be used to determine the coverage limit and to calculate the premium.

d. The endorsement form CTZ U 0462 (11/20) must be attached to the DWG-1 policy form.

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e. Coverage for contractors is available only under commercial builder’s risk forms and rates.

f. Coverage is available for damaged properties including unoccupied properties provided the intent to occupy is demonstrated via a signed contract with a Licensed Contractor or a building permit issued to allow repairs to be made to the property.

g. The property must be gutted and prepared for the repairs prior to the application for coverage.

h. Both exterior and interior photographs are required.

F. Risk Identification

All documents issued by Louisiana Citizens will bear a file number. Reference should be made to the Louisiana Citizens file number in any communication to Louisiana Citizens with respect to Louisiana Citizens risks.

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G. Policy Changes

1. If approved, policy changes will become effective 12:01 A.M. on the date following receipt by Louisiana Citizens. Backdating of a policy may be allowed with approval of the underwriter. Under no circumstances can the change be backdated more than thirty (30) days prior to the date of receipt.

2. Request for changes in the policy or cancellation by the insured or the insured’s representative shall be made to Louisiana Citizens in writing. To request an increase in coverage, furnish the amount of the increase, the reason for the increase, and the estimated replacement cost with Louisiana Citizens MS&B. If the reason for increase is an addition or other physical change to the structure, attach a photograph meeting the requirements of the General Rules section of this manual.

3. To request a decrease, please submit an endorsement request signed by the insured including the requested effective date and the reason for the decrease. If pertinent, provide a Louisiana Citizens MS&B using the Louisiana Citizens valuation program.

4. To add an item, furnish the requested effective date, the amount of insurance requested, the description of occupancy and type of construction, floor area and height, and the replacement cost and actual cash value using the Louisiana Citizens valuation program and a completed building information page of the appropriate Louisiana Citizens application form. In addition, attach a photograph meeting the requirements (Application for Insurance) of the General Rules section of this manual.

5. The changes will become effective upon approval by Louisiana Citizens. The insured will be billed for any additional premium due to Louisiana Citizens. If the change results in a return premium, the return premium will be remitted by Louisiana Citizens to the insured, the Producer, or the premium finance company.

6. Location Address Change

a. We do not change the location addresses on a policy.

b. However, there are a couple of exceptions as long as the actual risk being insured is not changed. These exceptions are:

i. If the property is a duplex and only part of the address was entered, we can add the other part of the address since it is the same risk.

ii. We can correct the spelling of a street, as long as it is an obvious mis-spelling. We will not change the name of the location.

iii. We can correct the street suffix, for example:

1. If 123 Main St. is entered but it should state 123 Main Rd., this is ok to change, as long as the risk does not change.

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H. Dwelling Fire Endorsements – DWG-1 Adding and Deleting of Extended Coverage

Louisiana Citizens Property Insurance Corporation enters into contracts with Customers

providing coverage for certain perils. This is agreed to by the receipt of a completed application package and the payment of premium. If the basic contract of what perils are being insured against is being changed by the Insured or Producer a new application package must be

submitted. Louisiana Citizens will no longer rewrite or endorse policies when an endorsement is received requesting the addition or deletion of Extended Coverage.

I. Policy Assignment

Subject to the rules of this manual and any necessary adjustment of premium, a policy shall not be transferred from one insured to another in the event of transfer of title of the property. The new owner must submit a completely new Application Package to Louisiana Citizens. However, in the event that the transfer is made to the original insured’s spouse, a new application package will not be required so long as all legal documents regarding the transfer of ownership are supplied to us.

J. Renewal Procedures

Renew policies and billing will be automatically distributed forty five (45) calendar days for Personal Lines and sixty (60) calendar days for Commercial Lines prior to expiration. A billing for the renewal premium will be mailed to the payer forty five (45) calendar days for Personal Lines and sixty (60) calendar days for Commercial Lines prior to the effective date of the renewal policy. If payment is not received by the effective renewal date the renewal policy will EXPIRE.

To avoid termination of Coverage the renewal premium must be received by Louisiana Citizens prior to the expiration date of the current policy.

Policy Term

Policies will be issued for a one year term.

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Cancellations

A. When a policy is in effect for less than sixty (60) days Louisiana Citizens may cancel for any reason. The following reasons are the most common:

1. The risk is vacant.

2. Failure to submit requested underwriting information within fourteen (14) days of the request. If underwriting information is incomplete, or more information is needed, the underwriter will send a letter to the insured’s producer detailing the information needed.

3. If the requested underwriting information is received and indicates that the property fails to meet underwriting standards.

4. The property does not meet underwriting criteria or if the risk is over-insured.

5. The risk is not written on the correct policy form.

6. A policy where the named insured does not have ownership/insurable interest in the risk.

B. When a policy has been in effect for sixty (60) days or more LA Citizens may cancel for the following reasons:

1. Non-payment of the premium, the non-refundable application fee, Market Equalization Charge, Emergency Assessment, or the Tax Exempt Surcharge.

2. A material misrepresentation of fact which is known to Louisiana Citizens would have caused us not to issue the policy.

3. If the risk has changed substantially since the policy was issued.

4. The risk is vacant.

5. A policy where the named insured does not have ownership/insurable interest in the risk.

6. The premium has been financed and the premium finance company acting pursuant to a Power of Attorney granted by the Insured requests cancellation for non-payment of premium.

7. Fraud or material misrepresentation, with the intent to deceive, in the presentation of a claim.

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C. Cancellations requested by the insured will be processed under the following conditions:

1. Cancellations will be effective on the date the cancellation request is received in the Louisiana Citizens office.

2. Backdating of cancellations is permitted only if proof of sale of property or if evidence of duplicate coverage is provided. Backdating shall not exceed thirty (30) days prior to receipt of the request by Louisiana Citizens.

3. The insured must surrender the original policy, or provide a completed, signed and dated Policy Release, or provide a Direct Notice of Cancellation by a premium finance company in order for the request for cancellation to be processed. If the policy was premium financed, any return premium will be sent directly to the entity that provided the financing.

D. Pro rata cancellation shall be used for all policies. All cancellations are subject to minimum premium requirements by policy type.

E. Notice of Cancellation shall be provided to the first named insured, the Producer, the premium finance company, and the mortgage company. A copy of each notice will be maintained in the underwriting file. The number of day’s written notice shall be in accordance with state law.

Reinstatements

Louisiana Citizens’ policies will not be reinstated after the legal cancellation date.

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Producer of Records

If a change or removal of a Producer is requested by an insured during a policy term, Louisiana Citizens shall give the Producer written notice fifteen (15) days in advance of the change or removal. If Louisiana Citizens receives a request to change a Producer within fifteen (15) days of the policy expiration, Louisiana Citizens shall provide the required fifteen (15) day notice;

however, any required changed Producer shall be effective on the inception of the renewal policy.

Commission will not be payable to the new Producer until the next policy renewal.

If an insured sends something in writing indicating that they no longer wish to work with their current Producer of Record, and would instead like switch to a particular agent, we cannot give any policy information out to the new agent until they have been officially made the new Producer of Record for the policy. They can only receive policy information once the Endorsement has been processed to make them the new Producer of Record at renewal, even if we have already received the completed “Agent of Record Letter”. If they wish to have the new agent immediately become their Producer of Record, their only option is to cancel the current policy and have it re- written through the new agent.

Sale of Book of Business

In order to achieve a smooth transition relative to the sale of a book of business the following notification procedures must be completed:

The selling Producer must furnish Louisiana Citizens a listing of all FAIR and Coastal Plan policies sold by policy number and insured’s name. If possible, the inception and/or expiration dates should be included.

The purchasing Producer must provide a letter on their letterhead assuming full responsibility for any unearned commission during the current term of all in force policies.

Policies currently issued to the selling Producer will continue to be billed to that Producer until expiration. The mailing address of the purchasing Producer will be used on all subsequent correspondence, but the Producer of record name can only be changed at renewal.

Appeals

Any applicant or insured may appeal in writing to the Governing Board of Directors of Louisiana Citizens Property Insurance Corporation within fifteen (15) days of any ruling, action, or decision of Louisiana Citizens Property Insurance Corporation. Any ruling, action, or decision of the Committee may be further appealed to the Louisiana Insurance Rating Commission within thirty (30) days after written notification of the Board’s decision.