MAX Underwriting Training

1
MAX Underwriting Training

• Presented by
• Denise Stucky
• Brenda Dutton
• Holly Yousey

2
Agenda

• Underwriting contact information
• MAX Eligibility
• Application and Endorsement procedures
• Payment Plans
• Underwriting Guidelines
• Binding Authority
• Resource Materials
• Agents Bulletins
• Questions and Answers

3
Underwriting Contact Information

• MAX Toll Free Number 1-877-971-6300
• Brenda Dutton, Underwriting Manager, extension
  124 email bdutton_at_maxwholeness.com
• Denise Stucky, New Business Underwriter for
  Personal Lines, extension 306 email
  dstucky_at_maxwholeness.com
• LaDonna Wedel, Renewal Underwriter for Personal
  Lines, extension 307 email lwedel_at_maxwholeness.c
  om
• Brad Shrum, Commercial Lines Underwriter,
  extension 123 email bshrum_at_maxwholeness.com

4
MAX Eligibility Requirements

• MAX is a reciprocal and each prospective client
  must meet our eligibility requirements for
  membership, which include the following
• A member or attendee of an eligible denomination
  or congregation and their immediate family
  members (children and parents), whether or not
  the children or parents are active members or
  attendees of an eligible group.
• An institution or entity affiliated with or
  serving any of the approved church groups,
  including its employees and volunteer staff.
• An employee of any of the MAX family of
  companies.
• A student attending a college, school, or
  seminary affiliated with an approved church
  group or person who graduated from such an
  institution.
• A resident living in a retirement community/home
  affiliated with an approved church group.
• Any other person or group who applies for
  eligibility and is approved by the President
  and/or MAX board of directors. (Such persons or
  groups will be referred to the MAX mutual aid
  ministries (MAM) team for initial screening and
  any recommendations to the President).
• Commercial businesses are eligible if at least
  50 of the ownership of such business meets the
  criteria listed above.

5
Eligible Church Groups

• Amish Fellowship of Evangelical Churches
• Amish Mennonite Fellowship of Grace Brethren
  Church
• Apostolic Christian Churches of America General
  Conference Mennonite Church
• Beachy Amish Churches German Baptist
  Brethren
• Beachy Amish Mennonite Mennonite Brethren
  Church
• Bible Fellowship Church Mennonite Church USA
• Biblical Mennonite Alliance Midwest Mennonite
  Fellowship
• Brethren Church (Ashland Brethren) Missionary
  Church
• Brethren in Christ Church Nationwide
  Fellowship Churches (Fellowship Mennonite)
• Bruderhof Communities
  Old Colony Mennonite
• Christian Anishinabec Fellowship Old Order
  Amish
• Church of God in Christ (Holdeman) Old Order
  German Baptist Brethren
• Church of God in Christ Mennonite Old Order
  Mennonite
• Church of the Brethren Old Order River
  Brethren
• Conservative Mennonite Conference Reformed
  Mennonite
• Dunkard Brethren Sweets Corners Christian
  Church
• Eastern Pennsylvania Mennonite Church United
  Brethren in Christ
• Evangelical Mennonite Conference United
  Christian Church
• United Zion Church

6
Application / Endorsement Procedures

• The agent should complete the MAX application for
  the line of business coverage is being requested
  for.
• Note MAX does use CLUE reports for property
  insurance.
• In addition to the signed application, agents are
  responsible for completing an e2value estimate on
  each structure and upload photos showing all
  sides of each structure to the e2value estimate.
• Additional underwriting questionnaires should be
  included with the application as needed i.e.
  woodburning stove questionnaire, trampoline
  questionnaire, etc.
• Save the application in Filebound, then send a
  note in MPPS to the underwriter that the risk is
  ready for underwriting.
• Endorsement requests should be created in MPPS
  with a note sent to Customer Service requesting
  processing of the requested change.

7
MAX Payment Plan Options

• MAX offers the following payment plan options to
  our customers
• Annual Payment (Required on all premiums under
  150)
• Semi-Annual Installments
• Quarterly Installments
• Monthly Installments
• Electronic Funds Transfer (EFT) is available
  under all pay plans, but is
• mandatory for monthly installments.
• The following fees apply to the MAX billing
  program
• 5 Installment fee for semi-annual and
  quarterly installment plans
• 2 Installment fee for monthly installments,
  including EFT
• transactions
• 15 Reinstatement fee
• 25 NSF funds fee when a check or EFT
  transaction is returned for
• non-sufficient funds

8
MAX Payment Plan Options

• Payments are due to MAX by the due date stated on
  the
• invoice. Agents are not authorized to accept
  payment for
• lapsed policies without prior approval from
  underwriting.
• Policies that have lapsed for non-payment will be
  required
• to pay the funds required to bring the account
  current
• including the associated reinstatement or NSF
  fees.
• Prior approval is required from underwriting
  before
• reinstating or rewriting a lapsed policy with
  MAX.
• Underwriters may require the agent to secure a
  signed
• statement of no losses for the period in which
  the lapse
• occurred.

9
Homeowner Program
10
Homeowner Underwriting Guidelines

• We offer all Homeowner forms in the AAIS program
• COVERAGE A (Form 2, 3 and 5) COVERAGE C (Form 4
  and 6)
• 30,000 Minimum 6,000 Minimum
• 650,000 Maximum 75,000 Maximum
• COVERAGE L (Liability) COVERAGE M (Medical
  Payments)
• 100,000 Minimum 1,000 Minimum
• 300,000 Standard 5,000 Standard
• Minimum deductible is 500.
• MAX offers ACV, Functional Replacement and
  Modified Replacement Cost endorsements.
• We strongly recommend 100 Insurance to Value on
  all dwellings.
• Dwellings over 40 years old require the system
  updates for plumbing, electrical and heating.

11
Homeowner Underwriting Guidelines

• Electrical must be on circuit breakers
• Polybutylene pipes (blue pipes) are not eligible
  for coverage.
• Generally, roofs over 15 years old will be
  written at ACV. Additional consideration will be
  given to higher grade shingles.

• Solid fuel appliances require the woodstove
  inspection worksheet be completed. This includes
  wood, pellet or coal stoves, and outdoor wood
  furnaces. Photos of the unit must accompany this
  form.
• Must be installed to manufacturer or NFPA 211
  requirements.

12
MAX Home Guard Guidelines

• MAX Home Guard Elite Requirements
• Home must be insured to 100 of replacement
  value, and
• The minimum dwelling value is 100,000, and
• Home cannot have a wood or coal stove, and
• Home cannot have a liquid fuel space heater, and
• Home cannot be older than 40 years old, and
• Home must be located in a protected or partially
  protected area, and
• Home must be the insureds primary residence, and
• Home must be a single family dwelling, and
• Home cannot be under construction, and
• Home cannot be a modular, and
• No unique construction.
• MAX Home Guard Extra Eligibility Requirements
• If the property being insured meets the
  eligibility requirements for the MAX Home Guard
  endorsement but does
• not qualify for the MAX Home Guard Elite
  endorsement, the company may offer the
  policyholder a package of
• coverages comparable to the MAX Home Guard
  Elite. This endorsement is available for an
  additional
• premium of 5 of the adjusted base premium.
  Additional Insurance Coverage A can also be
  purchased if the
• home was constructed within the last 40 years.

13
Home Guard Coverages
14
Home Guard Coverages
15
Homeowner Underwriting Guidelines

• Mobilehomes are not eligible for the MAX program.
  
• Risks with previous losses are subject to
  underwriting approval. MAX will allow no more
  than two weather related losses or one
  non-weather related loss on new business.
• Homes Under Construction can be written with MAX
  if they will be completed and occupied within 180
  days. Work must be performed by a professional
  contractor and we require a 1,000 minimum
  deductible on these risks.

16
Homeowner Underwriting Guidelines

• In order to qualify for the homeowner program
  with a farm exposure the farming that is
  conducted must be purely incidental to the
  occupancy of the residence as an owner occupied
  dwelling.
• An incidental farming exposure should be a small
  source of income for the insured and consist of
  cultivating less than 20 acres of land or raising
  no more than 10 farm animals for their own
  consumption.
• Detached structures on the described location
  that were originally built for agricultural
  purposes or use are specifically excluded under
  the MAX homeowner program.
• Such building should be written under a Farm
  Property policy with MAX.

17
Homeowner Underwriting Guidelines

• INELIGIBLE EXPOSURES
• Aggressive breeds that are not eligible for
  coverage with MAX include
• Akita
• American Staffordshire Terriers
• Doberman
• Pit Bull
• Presa Canarios
• Rottweiler
• Wolf or Coyote hybrids
• Mixed Breeds with aggressive breeds as part of
  the mix are treated as pure breeds
• Unusual or exotic animals
• Animals with a previous history of biting or
  vicious behavior
• Risks in poor condition
• Unfenced swimming pools or trampolines
• Risks previously cancelled or non-renewed by
  another carrier for any reason
• Vacant dwellings
• Unsupported secondary or seasonal property

18
Homeowner Underwriting Guidelines

• RENEWAL UNDERWRITING
• Risks subject to renewal underwriting include
• Risks involving two or more claims (both paid and
  unpaid),
• Risks with losses in the first term of coverage,
• Losses involving gross negligence and/or of major
  proportion,
• Losses involving fire or theft, and
• All liability losses
• Renewal underwriting actions may include no
  action, deductible
• changes, coverage restrictions, repair
  verification, requests for
• repairs, or non-renewal.

19
Dwelling Property Program
20
Dwelling Property Underwriting Guidelines

• COVERAGE A
• 30,000 Minimum
• 650,000 Maximum
• LIABILITY
• Liability coverage for rental property is
  available through the Landlord Liability coverage
  endorsement.
• Liability coverage for owner occupied property is
  available through the Personal Liability coverage
  endorsement.
• DEDUCTIBLE
• 500 Minimum

21
Dwelling Property Underwriting Guidelines

• ELIGIBLE DWELLINGS
• One to four family structures are eligible for
  coverage in this program. Dwellings with sleeping
  quarters in the basement must have proper egress
  windows.
• Eligible dwellings must be occupied for
  residential purposes only
• Owner occupied dwelling are eligible for this
  program
• Primary homeowner coverage must be written with
  MAX to insure rental property
• Maximum of 6 family units per client (1 family
  rental 1 family unit)
• 100 ITV recommended
• FL-1 coverage should be written for risks insured
  at the Actual Cash Value
• FL-2 or FL-3 coverage should be written for risks
  insured at the Replacement Cost Value
• gt40 Years requires System Update Information be
  provided
• gt15 Year Old Composition Roof are subject to ACV
  Roof Endorsement.

22
Dwelling Property Underwriting Guidelines

• Mobilehomes are not eligible for the MAX Dwelling
  Property program.
• LOSS HISTORY
• A three year loss history is required for all new
  applicants. New risks are eligible for coverage
  if in the preceding three year experience period
• There is no more than two weather related losses,
  or
• There is no more than one non-weather related
  paid loss

23
Dwelling Property Underwriting Guidelines

• INELIGIBLE EXPOSURES
• Rental property that MAX does not write the
  property coverage for is not eligible for
  liability coverage with us either.
• Rental property with more than four units per
  structure (Ex six unit apartment building)
• Aggregate exposures that exceed 2,000,000 for
  one member
• Homes that are purchased for subsequent resale
  (flipping)
• Risks in poor condition
• Risks previously cancelled or non-renewed by
  another carrier for any reason
• Vacant dwellings
• Risks with solid fuel burning appliances
• Risks undergoing major renovation are not
  eligible for coverage

24
Farmowner Programs
25
Farmowner Underwriting Guidelines

• Dwellings (FO1, 2, 3 or 5)
• 30,000 Minimum
• 650,000 Maximum
• Liability Medical Payments
• 100,000 Minimum 1,000 Minimum
• 300,000 Standard 5,000 Standard
• Personal Property (FO4)
• 6,000 Minimum
• 75,000 Maximum
• Hay in the Open 20,000 Maximum limit per stack
• Total Farm Property Coverage Maximum is
  2,000,000 per risk.
• Deductible
• 250 Minimum

26
Farmowner Underwriting Guidelines

• A signed completed MAX Farmowner application is
  required for all new risks.
• Agent is responsible for completing an e2value
  rebuilding cost estimate for the dwelling and
  each farm building or structure to be insured and
  providing photos of all sides of the dwelling,
  other structures, swimming pools, trampolines,
  farm buildings and structures.
• Photos must be uploaded to the e2value estimate.
• A diagram showing the layout of the farm dwelling
  and buildings is required as part of the
  application as well.

27
Farmowner Underwriting Guidelines

• MAX strongly recommends insuring all risks at
  100 of the rebuilding cost estimate. For older
  homes, we do offer coverage at the Functional
  Replacement Cost value, Modified Replacement
  Cost, or at Actual Cash Value.
• Farm buildings and structures can be written at
  their Actual Cash Value or Replacement Cost value
  calculated by e2value. Replacement cost coverage
  is available on farm buildings and structures
  that meet the following requirements
• Occupied for their originally intended purpose
• Insured to 100 of the rebuilding cost estimate
• Livestock buildings must be less than 10 years
  old
• Building must be well kept with good housekeeping
  and fully enclosed
• No loss control hazards are present for example
  open electrical panels, exposed insulation, or
  solid fuel heating appliances
• Construction quality should be superior

28
Farm Building Types

• Type 1
• Dwelling must be in excellent repair, and so
  certified by the agent after careful inspection.
• Foundation under all exterior walls must be of
  continuous construction.
• Dwelling must have a central heating plant vented
  to an approved chimney built from the ground up
  or a venting system approved by a recognized
  testing authority. A properly installed electric
  heating system will also suffice. No space
  heaters or stoves.
• Dwelling must have modern electrical system in
  excellent repair.
• No auxiliary wood burning stoves.
• No exposed urethane or styrene insulation.

29
Farm Building Types

• Type 2
• Dwelling must be in good repair, and so certified
  by the agent after careful inspection.
• Foundation under all exterior walls must be of
  continuous construction.
• Dwellings must meet the central heating
  requirement shown for Type 1 or must have gas or
  oil fired space heaters or stoves which are
  thermostatically controlled.
• Dwelling must have modern electrical system in
  excellent repair.
• Any auxiliary wood burning stoves must be
  installed to code specifications.
• No exposed urethane or styrene insulation.
• Type 3
• All other dwellings not eligible for Type 1 or
  Type 2 classification.

30
Farmowner Underwriting Guidelines

• Mobilehomes are eligible for the MAX Farmowner
  program as the Farm Dwelling if occupied as the
  primary or secondary residence of the farmowner,
  or as a Farm Building under Coverage E of the
  FO-6 if occupied by a farm employee. The
  mobilehome must be in good condition, well
  maintained, have tie downs and skirting in
  satisfactory condition.
• Risks with previous losses are subject to
  underwriting approval. MAX will allow no more
  than a total of three losses in the last three
  years, total payout of the losses must be less
  than 5,000, and all repairs from prior losses
  must be completed.
• Liquid manure pits/lagoons must be enclosed by a
  fence in good condition.

31
Farmowner Underwriting Guidelines

• Custom farm work done by the farmer within a 50
  mile radius of their farm with annual receipts in
  excess of 5,000 may be acceptable. Review these
  exposures with your underwriter prior to binding
  coverage.
• The following exposures are not eligible for
  coverage under the MAX Farmowner program
• Ponds that are available to the general public,
• Farms boarding horses for a fee, with riding
  stables, or farms used for horse racing,
• Farms having off-the-ground fruit picking by the
  public, using lifts, ladders or climbing of
  trees,
• Dog breeding operations with more than 5,000 in
  receipts or more than 3 dogs,
• Commercial Cattle Feedlots,
• Farms with mazes or agri-entertainment exposures.

32
Farmowner Underwriting Guidelines

• Ineligible Exposures
• Aggressive breeds that are not eligible for
  coverage with MAX include
• Akita
• American Staffordshire Terriers
• Doberman
• Pit Bull
• Presa Canarios
• Rottweiler
• Wolf or Coyote hybrids
• Mixed Breeds with aggressive breeds as part of
  the mix are treated as pure breeds
• Unusual or exotic animals
• Animals with a previous history of biting or
  vicious behavior
• Risks in poor condition
• Risks previously cancelled or non-renewed by
  another carrier for any reason
• Vacant dwellings or farm buildings
• Daycare where more than three children or adults
  are cared for is not eligible
• Farms allowing hunting must meet special
  underwriting criteria discuss with Underwriter
  before binding
• Farm yards with all buildings vacant

33
Farmowner Underwriting Guidelines

• Livestock suffocation coverage is afforded to hog
  and cattle operations. Poultry is not livestock
  under the definition of the farm policy and is
  therefore not eligible for this coverage.
  Complete the suffocation application and submit
  to Underwriting for consideration. Agents do not
  have binding authority for suffocation coverage.
• Farm Personal Property can be scheduled under
  Coverage F or covered under a blanket basis under
  Coverage G. A complete inventory of all farm
  personal property is required annually under
  Coverage G.
• Scheduled farm machinery such as combines are
  eligible for Intake of Foreign Objects coverage
  under Inland Marine.
• Irrigation pivots are eligible for coverage under
  the Farm Inland Marine portion of the Farmowner
  policy if insured at replacement cost value,
  otherwise they can be scheduled under Coverage E
  at ACV.

34
Farmowner Underwriting Guidelines

• Weight of Ice and Snow coverage is available for
  farm buildings or personal property covered under
  Coverage E, F or G as long as the property is in
  good condition.
• MAX offers Individual Risk Premium Modification
  (IRPM) credits and debits up to 25 under the
  Farmowner program. Underwriters are required to
  justify the credit or debit based on loss control
  features of the risk, condition of the farm
  property and buildings, and loss history of the
  overall risk.
• Rented or borrowed farm equipment can be
  scheduled under Coverage F on the FO-6.

35
Farm Property Underwriting Guidelines

• MAX also offers a Farm Property program for farms
  that are rented to others or the owner does not
  want liability coverage.
• The coverage and guidelines for the Farm Property
  program are the same as those in the Farmowner
  program.

36
Liability and Inland Marine Programs
37
Personal, Premises Only, Farm Liability
Guidelines

• MAX offers Personal Liability, Premises Only
  Liability and Farm Liability coverages.
• In order to qualify for these liability policies,
  the supporting property coverage must be written
  with MAX.
• These policies are particularly attractive to our
  Amish constituents who generally carry their
  property coverage with the Amish Aid Plan. They
  tend to seek liability coverage for their horse
  and buggy exposures or farm liability needs.
• MAX does not write stand alone liability policies
  at this time.
• If a prospective Amish client wishes to secure
  coverage with MAX, we must write the entire risk,
  not just a small portion of the property to
  support the liability coverage they are seeking.

38
Inland Marine Guidelines

• MAX offers a stand alone Inland Marine policy to
  provide coverage for missionaries that are going
  overseas.
• Personal liability coverage is not available for
  these risks.
• For overseas property with total values exceeding
  10,000, please contact you MAX underwriter.
• Coverage is written on an ACV basis with a 250
  minimum deductible.
• Individual items valued over 500 must be
  scheduled.
• The customer must still have property in, or the
  domestic mailing address must be in one of the 16
  states MAX is filed to write business in.

39
Commercial Program
40
Commercial Program Guidelines

• MAX offers Commercial Property, Commercial
  Liability, Commercial Inland Marine, and
  Commercial Crime coverage forms. These commercial
  coverage parts can be written individually or
  together in a combination package.
• MAX does not give binding authority to agents for
  Commercial Risks. All risks must be submitted to
  underwriting for review to quote and bind
  coverage.
• A signed completed ACORD application is required
  for all new Commercial risks, except Churches.
  Church risks must be submitted on the MAX Church
  application.
• Agent is responsible for completing an e2value
  rebuilding cost estimate for the building or
  structure to be insured and providing photos of
  all sides of the building or structure. Photos
  must be uploaded to the e2value estimate.

41
Commercial Program Guidelines

• The general coverage limits available in the MAX
  Commercial
• program are
• General Commercial Risks
• Property 500,000 Per Location
• Liability 1,000,000 Per Occurrence
• Inland Marine 250,000 Maximum
• Special Limits apply to Woodworking risks
• Total Property and Inland Marine value maximums
  are
• 250,000 in Protection Class 1 through 8
• 100,000 in Protection Class 9 or 10

42
Commercial Program Guidelines

• Church Risks
• Property 3,000,000 Total Building, Contents
  Inland Marine Limit
• Liability 1,000,000 Per Occurrence 5,000,00
  0 Premises Liability Aggregate
• Hired Non-owned Auto 1,000,000
• Stop Gap/ Employers Liability 1,000,000 (Ohio
  only)
• Risks that exceed these limits should be referred
  to
• underwriting for review.

43
Commercial Program Guidelines

• Minimum deductible is 500.
• Minimum premium is 350 for mono-line property
  and package business
• Minimum premium is 200 for mono-line Inland
  Marine policies in the Commercial program

• Commercial coverage not offered under the MAX
  program includes
• Workers Compensation
• Umbrella
• Owned Auto
• Employment Practices Liability

44
Commercial Program Guidelines

• Eligible classes of business include the
  following
• Churches where our members go to worship (small
  to medium size)
• Lessors Risk
• This class also includes public and private
  warehouses. Eligibility is limited to those
  warehouse properties that are incidental to an
  otherwise acceptable risk. Mini-storage
  warehouses are not eligible.
• Offices
• Includes risks used principally for office
  purposes including administrative or professional
  uses (excluding risks where the office is only a
  part of the total exposure, and excluding risks
  with classes or exposures that are not eligible).
  
• Retail
• Service

45
Commercial Program Guidelines

• Storage buildings
• Wholesale
• Woodworking
• Risk is fully protected or ISO Protection Classes
  1-8 (risks located in partially protected or
  unprotected risks ISO PC 9 or 10 require
  underwriting approval,
• With proper controls in place for finishing
  exposures,
• Proper storage of flammable liquids,
• Proper dust collection systems in place and
  operational,
• Good housekeeping is utilized,
• With acceptable installation exposures, and
• That have no past, present, or future anticipated
  products such as childrens furniture, toys, or
  ladders)
• Classes of business that are sales rated are
  eligible for MAX up to 25,000
• annual sales. Agent is responsible for verifying
  the annual sales volume prior
• to each renewal.

46
Commercial Program Guidelines

• The Church coverage offered by MAX includes the
  following coverage parts
• Property (Building and Contents)
• Equipment Breakdown
• General Liability
• Sexual Misconduct Liability
• Pastoral Counseling Liability
• Directors Officers Liability
• Stop Gap / Employers Liability (Ohio only)
• Inland Marine
• Employee Benefits Liability
• Hire Non Owned Auto Liability (Not available in
  Illinois)
• Crime
• Employee Dishonesty 150,000 Maximum Limit
• Money Securities (Inside and Outside) 20,000
  Maximum Limit
• Forgery 10,000 Maximum Limit
• Computer Fraud 10,000 Maximum Limit

47
Agents Binding Authority

• Homeowner Dwelling Property Binding authority
  levels
• Coverage A 30,000 Minimum
• 350,000 Maximum
• Coverage C 6,000 Minimum
• 75,000 Maximum
• Liability 100,000 Minimum
• 1,000,000 Maximum
• Medical Payments 1,000 Minimum
• 10,000 Maximum
• Farmowner binding authority levels
• Same as above, plus the following
• Farm Coverage No Minimum
• 1,000,000 Maximum for total of farm
  buildings, personal property including hay in
  buildings and Inland Marine coverages).

48
Resource Materials for Agents

• Access the various resource materials that MAX
  has created for its agents at
• http//miimg.us/agents/
• Some of the resource materials that are located
  on this website include the following
• Underwriting Manuals
• Applications
• Training Materials
• Agents Bulletins

49
Agents Bulletins

• Periodically, MAX will publish bulletins to
  agents to keep them informed of upcoming program
  changes in their state.
• The bulletins are delivered via email.
• Likewise, changes to program guidelines or
  coverage forms are published to agents via the
  bulletins.
• It is important that you take time to read and
  understand these bulletins and share the
  information with your staff so that everyone has
  the latest information from MAX.
• Our intent is to keep our agents well informed of
  any change that impacts the MAX programs or the
  members.

50
Question Answers
51
Thank you for participating in the MAX
Underwriting Training. We look forward to
working with each of you! Welcome to MAX!