1. SHPIP Shea Homes Partnership Insurance Program SheaHomes Southern California November 8, 2010 Presented by: Tommy Tso, Director of Risk Management Jack Austin, WC Claims Administrator Trisha Engelhart, Orion Risk Management

2. SHPIP Shea Homes Partnership Insurance Program What is SHPIP? What is a Wrap-Up? OCIP? CCIP? History of SHPIP Program in place since 1997 Coverages included in SHPIP Benefits of SHPIP

3. SHPIP Coverage

4. SHPIP Coverage Overview *Chart not to scale *Coverages effective 8/1/2010 – 8/1/2011

5. Current SHPIP WC Coverage Shea provides (through Liberty Mutual) a Guaranteed Cost Program for enrolled TradePartner employees working on Shea jobsites that are SHPIP’d. Trade employees are covered only when they are working on a SHPIP’d Shea jobsite. The SHPIP policy does not provide coverage for Trade employees before they arrive at and once they leave the jobsite. Loss experience developed on the SHPIP program is reported to the state Rating Bureau and is used in the calculation of the Trade’s ExMod Program runs from 8/1/2010 – 8/1/2011

6. Current SHPIP GL Coverage Premises Primary Layer $3M per Occurrence $6M General Aggregate No Deductible to TradePartners 1 st Excess Layer $25M per Occurrence $25M General Aggregate 2 nd Excess Layer $25M per Occurrence $25M General Aggregate Provides coverage for activities taking place during the construction process at the jobsite No coverage for TradePartner® home offices or Shea operations not taking place at the job-site.

7. Products/Completed Operations Includes Professional Liability Primary Layer – Self-Insured Retention $15M per Occurrence $15M Aggregate Excess Layer $25M per Occurrence $25M Aggregate 2 nd Excess Layer – Self-Insured Retention $10M per Occurrence $10M Aggregate Current SHPIP GL Coverage Completed Operations coverage for construction defects through statutory period, triggered at close of escrow or completion of work and put to intended use

8. SHPIP Processes & Requirements

9. Change in Program Administration As of 8/1/2010, Orion Risk Management is our insurance broker and SHPIP administrator. All issues previously presented to Aon should now be directed to Orion. Most matters can be handled via the website dedicated to SHPIP: www.orionocip.com Orion Risk Management Insurance Services, Inc. 5000 Birch Street, Suite 9000 Newport Beach, CA 92660 949-263-8850 Contact:Trish Engelhart 949-263-8850 tengelhart@orionrisk.com

10. Enrollment Eligibility TradePartners ® at Shea Homes and Active Adults Communities Sub-tier TradePartners ® of ALL LEVELS Eligible Design Professionals and Consultants _______________________________________________________________________ Examples of Ineligible Trades/Consultants: Suppliers/vendors (no on-site labor) Environmental trades Pure warranty work Model Home cleaners Consultants who conduct feasibility studies Interior Designers

11. Enrollment Process New Trade Requirements Completed Enrollment Package List of any new Sub-Tiers Certificate of Insurance

12. TradePartner Responsibilities Certificate of Insurance –Auto Liability Coverage Symbol 1 – Any Auto Minimum of $1M Combined Single Limit –Workers’ Compensation and Employers’ Liability Statutory Minimum of $1M for Employers’ Liability Limit –Certificate Holder SheaHomes, LP Check your master agreement Upload at: www.orionocip.comwww.orionocip.com

13. TradePartner ® Responsibilities Submit WC payroll online by the 10 th of each month Submit WC Rates within 45 days of conventional policy’s renewal date Provide current and correct certificate of insurance for Auto Liability and non-SHPIP WC. Certificates do not need to be site/project-specific Comply with Liberty Mutual Policy Audits Penalties in addition to payment holds will be assessed for non-compliance

21. SHPIP Credit Calculation

22. WC Credit Calculation: –Match Conventional Rates –Rates will be adjusted due to deductibles GL Credit Calculation: –Shea Flat Rate 2.5%

23. Penalties Late WC Payroll Reporting –Estimate Trade’s Payroll –Adjustments only if actual payroll is higher than estimated –Actual payroll must be received for proper Ex- Mod calculation Late WC Rate Renewal after 60 days –Program Administrator will generate the rate –Adjustments only if actual rate is higher than estimated Non-Compliance will result in payment delay in addition to above penalties

24. WC & GL Claim Reporting

25. How to Report a WC Claim If an employee is injured, you must IMMEDIATELY call Liberty Mutual to report the incident: 888-526-5758 Reference “SheaHomes Southern California” Community Liberty Mutual will complete the mandatory state form (5020) and electronically transmit to Liberty Mutual’s Glendale claims office. A copy is also transmitted to Corporate Risk Management Timely claim reporting metrics are tracked for each Trade and each Division. If you have any questions regarding a new claim, a potential claim or a claim in progress, contact Corporate Risk Management: Main Number: 909-869-0858 Jack Austin:909-869-0862 WC Claims Administrator

26. How to Report GL Claims 1.Immediately notify the Shea Division Safety Manager or the Shea Superintendent. A liability claim form must be completed based upon the facts of the incident 2.The claim form must be forwarded IMMEDIATELY to Corporate Risk Management with back-up documentation (including photos) If a member of the public is injured or their property is damaged during the course of business activities, this would constitute a GL- Premises claim. If your company has been served with a lawsuit regarding SHPIP’d work, please contact Corporate Risk Management immediately: Chris Rodriguez909-869-0858 Tommy Tso909-594-0971

27. Post-COE Property Damage Within Warranty Period (12 Months Post-COE) Warranty items are subject to TradePartner ® correction and/or backcharge by the Division If you are backcharged by the Division for the repairs to resultant damages, then you may submit a claim in excess of the $5,000 penalty Contact Shea’s Customer Care/ Warranty Dept. for copies of the claim form. All claims must be submitted to Corporate Risk Management

28. Post-COE Property Damage Post Warranty Period (>12 months post-COE) All claims must be submitted through Corporate Risk Management for review TradePartners ®, if backcharged, are responsible for the first $5,000 of each occurrence Policy provides coverage for 87.5% of valid claims

29. Risk Management Contacts J.F. Shea Co., Inc. – Corporate/Walnut Tommy Tso909-594-0971 Jack Austin909-869-0862 Christine Rodriguez909-869-0858 Department Fax:909-586-9251 Orion Risk Management Trish Engelhart949-263-8850

30. Questions!