To: Farm Mutual Partner Companies

RE: Prohibited List and Dog Exclusion Forms

Change Announced Regarding Prohibited Dog List for Farm Mutual Accounts

Dog bites accounted for more than one-third of all homeowners insurance liability claim dollars paid out in 2011, costing nearly $479 million, according to the Insurance Information Institute (I.I.I).

An analysis of homeowners insurance data by I.I.I. found that the average cost paid out for claims was $29,396 in 2011, up 12.3% from $26,166 in 2010. In fact, from 2003 to 2011, the cost of the average dog bite claim increased by 53.4%. The number of claims rose 3.3% from 15,770 in 2010 to 16,292 in 2011. These increases can be attributed to increased medical costs as well as the size of settlements, judgments and jury awards given to plaintiffs, which have risen well above the rate of inflation in recent years. (source - Insurance Information Institute, 2012).

As a result of the increased frequency and severity of dog bite claims, Rockford Mutual Insurance Company amended our list of prohibited dog breeds to be as follows:

Effective immediately, the following dog breeds are unacceptable for coverage in any of our programs (This includes owned and those being cared for by anyone living within the insured premises) – Akita; American Stafford (); Chow; Doberman ; Fila; ; ; and Wolf/Dog hybrids or mixed breed dogs linked to any of the above breeds or any dog with a prior dog bite history.

We ask that you incorporate this into your regular liability underwriting processes as soon as possible. This should include asking if any of these prohibited dog breeds are present when a new account is underwritten and should be checked during any inspection that you complete, whether at the time of new policy issuance or when obtaining an updated inspection. It is good practice to provide your agents/insureds with a copy of this list with each new policy and advise them to notify you if they bring one of these dog breeds into their household after the policy has been written.

There are published “dog bite exclusion forms” currently being used in the insurance marketplace. Although this may help to limit exposure, these forms have not been fully tested in the Illinois court system and therefore shall not be used to exclude one of the prohibited dog breeds listed above. This would be for a dog that hasn’t had prior issues, but has now bitten someone (or another animal) and the insured does not want to remove the dog from the premises. Rockford Mutual may consider use of these dog bite exclusion forms subject to the following:

• For breeds not included on the prohibited list above; • For a dog that has not exhibited aggressive behavior in the past; • For a dog that has not bitten any person or other animal prior to the action requiring the addition of this form; • There is an indication that the person (or animal bitten) may have contributed to the incident; • Use of this form requires that the named insured sign the form to specifically exclude the dog in question. Be sure to ask your insured if they are comfortable accepting this risk and the large damages that may result. • Use of this form is subject to written approval from your RMIC farm mutual underwriter.

A copy of this form is attached for your reference.

Please contact your RMIC farm mutual underwriter or marketing rep if you have any questions.