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Welcome to SDBIC

2014

“The recognized expert on protecting and insuring valuable personal property in a safe deposit box”

Consumers Unaware of Exposure

Front page article in Chicago Tribune defines the need for SDBIC

“Flooding reveals: Safe-deposit boxes not entirely safeChase bank's safe-deposit boxes flood and Northfield branch seeks waiver”

"Perhaps it should be called a 'potentially unsafe' deposit box," said William Hielscher a box renter. "I think people are under the mistaken impression that the bank is protecting theirvaluables the same way the bank is protecting their money.“

"I find that to be unconscionable," said Hielscher, who refused to sign the release and toldseveral other customers that they shouldn't sign it either.

Link to Chicago Tribune Article

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William Hielscher found his mother's pearls discolored when he opened her flooded safe-deposit box at a Chase bank in Northfield.

Box Holders Devastated after a Loss

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Article concerning recent fire in California bank captures customer’s perspective

"I was driving down El Paseo from Keedy'shaving breakfast and I saw the bank had burned down. And I immediately thought about my valuables in my safe deposit box"

"More importantly the documents that are in there would take a lot of time to replace.“

Brown had to call his wife and tell her several thousand dollars worth of jewelry, gold coins and irreplaceable documents might be gone.

Financial Institutions Disclaim Liability

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New York times article concerning a recent bank fire in Manhattan

“Whatever the condition of the safe deposit boxes, the bank is not liable for the contents ” said a Citibank representative.

The Market Place Today

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“No safe deposit box, or safe, is completely protected from theft, fire, flood or other loss or damage. Consider taking precautions… Remember that, by law, FDIC insurance covers only deposit accounts. Also, do not expect the bank to reimburse you for theft or damage to the contents of your safe deposit box. If you want protection for the valuables in your safe deposit box, talk to your insurance agent.”

Quote from FDIC Website

“A box does not provide protection against every possibility of physical loss and we do not provide insurance coverage for the contents. Boxes are not designed to withstand fire, explosion, intense heat , smoke, water, building collapse , mold or similar perils and you assume the entire loss to the Box contents from such risks. We recommend that you arrange to have the contents of your Box insured by your personal insurance carrier.”

Wells Fargo Lease Agreement

Gambling with Your Customers’ Valuables

Over half of your customers believe they are insured by you or the FDIC

Gambling with your box holders most precious possessions

Betting against a loss

Educate your box holders by offering an insured box option

Allow for an informed decision on need for insurance protection

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Our Mission

Inform and educate customers

Customers believe they are insured

Allows customer to make informed decision

Obtains customers acknowledgment that box contents is not insured by bank or FDIC

Offer affordable and convenient option to rent an insured safe deposit box

Respects confidentiality and privacy of box renter

Provides broader coverage at less cost than homeowner’s policy

Insures entire box contents including previously uninsurable items

Promote the use of safe deposit boxes to protect valuable personal property

Safe deposit box is the best option for storing property

Home safes are more susceptible to robberies and natural disasters

Provide Wealth Managers and Private Bankers another tool to protect assets

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The Right Product At The Right Time

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Increase in frequency and severity of catastrophes highlights product need Thousands of boxes are submerged following Sandy Five banks burned to the ground in last 18 months Tornadoes in Midwest more frequent and severe Gulf and Atlantic coast experiencing more hurricanes Increasing frequency of catastrophic flooding Fear from acts of terrorism

Value of property held in safe deposit boxes has increased Steep rise in value of precious metals, diamonds and gemstones Corresponding appreciation in jewelry, numismatic coins and other collectibles

Regulators requiring banks to have clear, complete and redundant disclosure of terms for deposit and lending related products

Substantial Consumer Interest

9Margin of error: 2.9%

Survey of 1,165 current safe deposit box renters

50% were not aware that safe deposit boxes are not insured

28% of box holders would buy the product Box renters assigning a “9” or “10” on a

scale of 1-10 with “10” being certain to buy

55% said it was “important” that their financial institution offer safe deposit box insurance, if it were available

40% stated that they would move their relationship if financial institutions didn’t provide insurance With younger box renters the percentage

increased to 80%

Benefits to Bank Customers

Simple, easy and convenient to purchase

Features of the SDBIC product:

Offered when safe deposit box is opened or at renewal

Box renter selects the amount of coverage desired

Covers all property in the box including cash and precious metals

No disclosure or appraisals needed

Insures against virtually all man made and natural disasters

No deductibles

Includes $3,000 replacement benefit for important personal papers or photographs

Property automatically insured when placed in the box

Policy automatically renews unless cancelled by box renter

Broader coverage at lower cost than H.O.

Minimum customer information – No Social Security # needed

Secure on-line purchase in less than 5 minutes

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Homeowner’s Insurance is Ineffective and Costly

Coverage Under Standard Homeowner’s Insurance Policy No coverage for cash, gold, and all other precious metals Typical limit for jewelry - $1,500 to $2,500 Little or no coverage for other items typically stored in safe deposit boxes Loss of privacy - need to itemize contents No coverage for flood related damage Expensive and cumbersome – appraisals required for value of contents

Providing Value to Our Bank Partners

Benefits to Bank

Revenue sharing through SDBIC paid commission

Generates 5%-10% revenue increase from FI’s safe deposit box operations

Turnkey, minimal cost and staff training

Solves nagging disclosure issue which leads to bad press and legal liability

Value added product for Bank customers

(“It is the right thing to do”)

Consistent with mission of financial institutions from regulators perspective

Competitive advantage

Generates compliance documentation in accord with CFPB mandates

Opportunity to promote safe deposit box services

Insured Box is additional product feature for Private Bank or Wealth Management Group Clients

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Affirmative Election Program

Election to obtain insurance integrated into bank rental and renewal documents

Box renter required to select or decline coverage and return form to the bank

Renter selects from different amounts of insurance with the corresponding cost

Bank transmits file with election form to SDBIC which then issues policy and handles all administration

Declination contains acknowledgment that box contents not insured by bank or FDIC

Affirmative declination provides compliance support and minimizes liability when a loss occurs

Affirmative Election materials can be customized and privately branded by bank

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Affirmative Election Workflow/ Dataflow

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Limited Role of Branch Banker

Provides AEP form at time box is being leased

Responds to customer inquiries

Banker educated on 7 basic points in 10 minute training module.

Customer selects coverage amount-no content disclosure required

Any property in the box is covered other than illegal contraband

$3,000 replacement cost benefits for important papers-wills, trusts , deeds, titles, etc…

Covers against man made or natural disasters, burglary, and robbery

No deductible; coverage can be cancelled at any time for a pro rated refund of annual premium

Easy to purchase-just complete form, call SDBIC or go online at www.sdbic.com

For additional coverage questions, call SDBIC trained customer service representative and relay customer questions or place customer on phone

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Week 1• Bank identifies internal coordinator for program• Finalize where completed AEP form will be returned (SDBIC or Bank)• Finalize and obtain internal approval of AEP cover letter and form (template letter and form provided by

SDBIC)• Begin coordination with print/mail service or vendor

Estimated hours expended by bank coordinator - 20

Week 2• Instructions for Bank Call Center or operators agreed upon to allow box insurance questions to be routed to

SDBIC CSR's• Mail Merge file for print/mail service created• Branch information/training sessions begin

Estimated Hours expended by bank coordinator - 10-15

Week 3• Branch staff training sessions continue as needed• Announce partnership with hyperlink on Bank's website• Review and approve press release announcing availability of insured boxes at bank

Estimated Hours expended by bank coordinator - 10-15

Begin Earning Revenue in 30 Days!

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Begin Earning Revenue in 30 Days!

Week 4• Complete branch information/training session• Finalize date for mailing with print/mail service• Initial mailing to all box holders released• Branches are notified of AEP mailing• Press release announcing partnership released

Estimated hours expended by bank coordinator - 15-20

Weeks 5-8• Returned AEP Forms are opened and processed• SDBIC process payments, issues policies and handles customer service• SDBIC provides report to Bank on box holders purchasing coverage-remits fee to Bank

Estimated hours expended by bank coordinator - depends on where AEP form is returned

Week 15• Commence inclusion of AEP form (amended) in the box rental fee renewal notice

Estimated hours expended by bank coordinator - 1-per week

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Product and Marketing Materials Previewed by CFPB

SDBIC pro-actively sought CFPB review of the program and the AEP materials

Based on its review CFPB indicated that it had “no interest” in the product from a supervisory or examination perspective – it is a niche value added product which posses minimal risk of consumer harm

Education Office of CFPB considering issue of need for additional bank disclosure concerning “no insurance”

Other factors considered in review: No bank staff involvement in product marketing at time of renewal - which represents 90% of the

contacts (Customer directed to contact SDBIC trained CSR)

Simple product design and consumer familiarity with property insurance minimizes risk of misunderstanding

Pricing is fixed and known before a decision is made on coverage; no policy fees

Minimal box holder personal information required to obtain coverage (no SS# or credit history -only last two digits of the box)

Premium and forms being used have been filed and approved by the insurance department of the state(s) in which the bank operates; coverage terms can not be changed

Coverage can be increased, decreased or terminated by insured for a pro-rated refund

Detailed yet simple Summary of Coverage Terms provided with marketing materials

A trained SDBIC CSR is available to answer any questions 18

High Margin Revenue

19* Excludes any incremental increases in box rentals from joint SDBIC / Bank promotions

1 2 3 4 5 Total

Leased Boxes 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000

Box Uptake Rates 25% 30% 35% 40% 45%

Insured Boxes 500,000 600,000 700,000 800,000 900,000

Commission Rate 25% 25% 25% 25% 25%

Projected Revenue $10,000,000 $12,000,000 $14,000,000 $16,000,000 $18,000,000 $70,000,000

Postage and Printing $1,000,000 $100 $100 $100 $100

$9,000,000 $11,999,900 $13,999,900 $15,999,900 $17,999,900 $68,999,600Net Profit

Revenue Summary for Wells Fargo Bank

Assumes 2,000,000 leased boxes

Avg. Premium $80

Program Year

Bank Revenue

Bank Costs

Appendix

A-1 Insurance Underwritten by AmTrust

A-2 Better Business Bureau Certificate

A-3 Affirmative Election Form

A-4 Summary of Policy Terms

A-5 Featured News Articles

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Underwriter: AmTrust Financial

A.M. Best rating of “A” (Excellent)

Named one of the top 10 fastest-growing insurers due to year-over-year growth by Zack’s Investment Research

Publicly traded on the NASDAQ Global Market under the stock symbol AFSI

More than $5.7 billion in assets

More than $2.2 billion in written premium

Net combined ratio of 89.0%

“AmTrust Financial Services ranks among Fortune’s top 100 fastest-growing companies”

A-1

Serving the Needs of our Customers and Bank Partners

A-2

“Your company’s commitment to customer service excellence pays dividends in many ways. We are honored to recognize your business for superior performance in the areas of ethical business practices and encourage you to continue your commitment to total customer satisfaction”

Affirmative Election Form

A-3

Affirmative Election Form (cont)

A-4

SDBIC Pricing Schedule

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Featured News Articles

"Iowa City Bank's VP of Security Recalls Flood Experience"

"Boatman's Bancshares, Inc., Faces Disaster Recovery throughout Midwest"

"Weather Causes Massive Problems for Midwestern Banks"

"Between a Box and a Hard Case: Safe Deposit Theft Claims on the Rise"

"Bank Client that had Items Stolen from TD Bank Safe Deposit Box Hires Law Firm Imbesi Christensen"

"Safe Deposit Burglary Mirrors 'The Bank Job' Movie"

"Finally, Something New in the Safe Deposit Box Area"

"Recent Fires Turn Safe Deposit Boxes into Ovens"

"Insured Gold Storage Now Available through Safe Deposit Box Insurance“

"Disaster Preparation Plan: Safe Deposit Boxes Insured by SDBIC to Protect Valuable Property"

“Hurricane Sandy Provides further Proof; an Insured Safe Deposit Box is Vital for Disaster Preparation"

"The New Norm: A Storm for Every Season“

"In the Aftermath of the Citibank Fire in Manhattan, Safe Deposit Box Holders Deal with Insurance Realities"

"New Survey by Survey USA Discloses Widespread Confusion among Consumers Regarding Safe Deposit Box Insurance“

"Chimney-Creep Heist"

A-5