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IL N 177 09 12 <br />CALIFORNIA PREMIUM REFUND DISCLOSURE NOTICE <br />In accordance with CAL. INS. CODE § 481.(c), we are notifying you that in the event that the first Named Insured <br />cancels the insurance policy, we shall retain 10% of the unearned premium. The premium refunded to you will <br />therefore be calculated as 90% of the pro rate unearned premium. But if cancellation takes place during the first <br />year of a multiyear prepaid policy, we will return 90% of the pro rate unearned premium for the first year and the <br />full annual premium for the subsequent years. <br />If you have an Equipment Breakdown policy or your policy contains an Equipment Breakdown Coverage Part, <br />then the following premium refund calculation applies instead of that provided in the preceding paragraph. For the <br />Equipment Breakdown policy premium or for the premium attributable to the Equipment Breakdown Coverage <br />Part, we shall retain 25% of the unearned premium. The premium refunded to you will therefore be calculated as <br />75% of the pro rate unearned premium. But if cancellation takes place during the first year of a multiyear prepaid <br />policy, we will return 75% of the pro rate unearned premium for the first year and the full annual premium for the <br />subsequent years. <br />However, the penalties set forth in the preceding paragraphs will not apply under the following circumstances, <br />even if the first Named Insured cancels the policy: <br />1. The Insured(s) no longer has a financial or insurable interest in the property or business operation that is the <br />subject of insurance; <br />2. Cancellation takes place after the first year for a prepaid policy written for a term of more than one year; or <br />3. The policy is rewritten in the same insuring company or company group. <br />IL N 177 09 12 © Insurance Services Office, Inc., 2012 <br />Risk Mmvgonent Division <br /><9 f REnerreo & Avr2ov® By: <br />�' Risk Management Analyst <br />