1. Professional Liability InsuranceNotice H 04-15 Department of Housing and Urban Development Office of Multifamily Development HUD Notice H 04-15

2. Introduction • Overview of Presentation • Introduction of Panelists • Discussion of Changes • Presentation of Industry Professionals • Question and Answer Session HUD Notice H 04-15

3. Rating Providers of Insurance • Liability Insurance must be Rated by AM Best with a B++ • Rating Captives & Risk Retention Groups • Offshore Insurance Providers Prohibited • Approval of Additional Rating Agencies HUD Notice H 04-15

4. Joint Underwriting Associations • What are JUAs • HUD Approval of JUA providers of Professional Liability Insurance • JUAs in Operation Less than four Years • Disqualification of JUAs HUD Notice H 04-15

5. Operator/Manager of Healthcare Facilities • Definition of Operator/Manager • Corporate Operator/Managers HUD Notice H 04-15

6. Financial Statements • HUD Needs Audited Financial Statements for Operator/Manager • HUD will Accept Operator/Manager Certified Financial Statements in lieu of Audited Financial Statements HUD Notice H 04-15

7. Submission of Claims Information • Incident Reports for Serious Injuries • Insurance Loss Reports must be Submitted • Inventory of Claims must by Provided • State Licensing Surveys must be Provided for all G Rated or Higher Deficiencies HUD Notice H 04-15

8. HUD Review of Insurance Needs • HUD will Review Information Prior to Submission of Application • HUD will Provide Guidance of Insurance Needs HUD Notice H 04-15

9. Surplus Lines Carriers • Licensed Carriers Acceptable • Surplus Lines Carriers also Acceptable from HUD as Long as they have Authorization to Conduct Business in the State HUD Notice H 04-15

10. Insurance Tail Coverage • Tail Coverage is Required if Claims are the Responsibility of the Operator/Manager • No Tail Coverage if Property is being Purchased and Prior Claims are not the Responsibility of the New Operator/Manager HUD Notice H 04-15

11. 223 A(7) Refinancing • If Applicant has Adequate Professional Liability Insurance, Requirements of Notice H 04-15 will NOT Apply HUD Notice H 04-15

12. Troubled State Designation • Designation of Troubled State is Eliminated • HUD will Review Each Applicant Where High Insurance Costs Impacts the Feasibility of the Project HUD Notice H 04-15

13. Minimum Coverage and Deductibles • Minimum Insurance coverage is $1,000,000/$3,000,000 • HUD may Lower Minimum Coverage is Application is Infeasible Due to Insurance Cost • Deductible Raised to $100,000 • Maximum Deductible is $1,000,000 for Operator/Managers with 50+ Facilities HUD Notice H 04-15

14. Hamilton Insurance Agency • Presentation of Alan Zuccari of Hamilton Insurance Company on Industry Perspectives of Revised Notice • Review of Issues that Insurance Underwriters Focus on When Conducting Due Diligence of Healthcare Facilities HUD Notice H 04-15

15. Questions and Answers • Panel: • Michael McCullough (HUD) • Alan Zuccari • C. Mark Williams (HUD) • Minnie Monroe-Baldwin (HUD) HUD Notice H 04-15

16. Final Comments • Final Comments from HUD STAFF • Discussion of Next Steps in Training Process for Professional Liability Insurance Issues HUD Notice H 04-15