Financial- COPS (Insurance Information)

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I' ~ I ' 1. Property & casualty insurance must be specifically maintained for the Leased Facility in an amount (except as provided below) equal to Replacement Cost of the Project (or the total facility if the Project is an expansion). Such coverage must apply exclusively to the Leased Facility and must be available to repair/rebuild the Leased Facility under all circumstances after the occurrence of an insured peril. Full payment of insurance proceeds up to the required policy dollar limit in connection with damage to the Leased Facility shall, under no circumstances, be contingent on the degree of damage sustained at other facilities owned or leased by the Lessee. The policy must explicitly waive any co-insurance penalty. Insurance certificates evidencing exclusive coverage (whether or not provided under a master policy) must be provided to MBIA prior to closing and annually thereafter to MBIA's Insured Portfolio Management Department. If the insured entity elects to provide property and casualty insurance only in an amount equal to the par amount of the Certificates, then the Trust Agreement shall provide that property insurance proceeds must be paid to the Bond Trustee and used to redeem the outstanding Certificates in full unless such proceeds plus any additional funds deposited with the Bond Trustee are sufficient to fully rebuild or repair the Leased Facility. 2. Original copies of a11 insurance policies must be delivered annually to MBIA's Insured Portfolio Management Department within 30 days of purchase or renewal. 3. MBIA shall be provided with (A) a title insurance policy in an amount equal to par value of the Certificates and (B) an opinion of counsel in form and substance satisfactory to MBIA to the effect that the exceptions set forth in the policy do not materially impair the use of the project, the existing facilities and the sites thereof for the purposes for which they are, or may reasonably be expected to be, held. No self-insurance will be permitted with respect to the above requirements for title insurance. 4. Reasonable and customary liability insurance must be maintained. All required insurance policies must be provided by a commercial insurer rated A by Best or in the two highest rating categories of S&P and Moody's. All policies shall name the Lessee, the Lessor, and the Trustee as insureds. 6. Self-insurance-or insurance reserves maintained by a joint exercise of powers authority for property & casualty and liability risks may be approved in writing by MBIA on an exception basis provided that the following minimum conditions are met: a. The self insurance program must be approved by an independent insurance consultant; b. The self insurance program must be maintained on an actuarially sound basis and MBIA will annually receive a certified actuarial statement attesting to the sufficiency of the program's assets; c. The self insurance fund must be held in a separate trust fund by an independent trustee; d. In the event the self insurance program is discontinued, the actuarial soundness of the claim reserve fund must be maintained.