UNITED STATES OF AMERICA,
     Plaintiff,

v.

CIVIL ACTION No. C2-97-291

NATIONWIDE MUTUAL INSURANCE
COMPANY; AND NATIONWIDE MUTUAL
FIRE INSURANCE COMPANY,
     Defendants.

___________________________________

1. INTRODUCTION AND SUMMARY

2. GENERAL INJUNTIVE RELIEF

3. NATIONWIDE'S COMPREHENSIVE PLAN TO INCREASE SERVICES TO URBAN COMMUNITIES
   1. Criteria For Insurance Coverage Eligibility

   2. Criteria For Homeowners Insurance Coverage Pricing

   3. Company Presence In Urban Areas: General

   4. Company Presence In Urban Areas: Sales/Service Centers

   5. Advertising And Marketing

4. TRAINING
   1. Training By Nationwide

   2. Training By Qualified Organization

5. TESTING

6. COMUNITY INVESTMENT

7. REPORTING REQUIREMENTS

8. IMPLENTATION OF DECREE

The United States has brought this action pursuant to the Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Act Amendments Act of 1988), 42 U.S.C. 3601, et seg., and alleges in its Complaint that the above Nationwide insurance companies named as defendants (Nationwide) have violated the Act by discriminating on the basis of race, color and national origin in the provision of homeowners insurance.

The claims of the United States in this lawsuit focus fundamentally on certain underwriting policies of Nationwide which allegedly discriminate against homeowners in minority neighborhoods on a prohibited basis by making it more difficult for such homeowners to either obtain quality insurance for their homes or to obtain any homeowners insurance at all. These policies include requirements which allegedly make insurance coverage unavailable or less valuable based on the age and market value of a home, as well as on the basis of the ratio of a home's market value to replacement cost. The United States asserts that predominantly minority communities and their residents have suffered harm as a result of these practices restricting access to Nationwide's homeowners insurance. The United States further alleges that Nationwide has engaged in intentional discrimination against homeowners in minority neighborhoods by deliberately limiting the company's presence in minority neighborhoods, in large part through the underwriting rules mentioned above.

Nationwide denies that it has engaged in any form of discrimination in violation of the Act and affirmatively states that its underwriting practices are lawful and based on legitimate business considerations. Nationwide has challenged whether the Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988) applies to its homeowners insurance practices. Nationwide filed suit in the United States District Court for the Southern District of Ohio asserting that the Act does not apply. The District Court rejected Nationwide's position, and the ruling that the Fair Housing Act covers the business of homeowners insurance was affirmed by the United States Court of Appeals for the Sixth Circuit. See Nationwide Mutual Ins, Co. v. Cisneros, 52 F.3d 1351 (6th Cir. 1995). The Supreme Court denied

Nationwide's petition for certiorari. See 116 S. Ct. 973 (1996). Nevertheless, Nationwide, while not waiving its jurisdictional argument nor admitting that the Fair Housing Act and its amendments are applicable to it or any other property insurance carrier, see Mackey v. Nationwide Insurance Cos., 724 F.2d 419 (4th Cir. 1984), has approached the United States and indicated a willingness and an intention to voluntarily change its underwriting policies and enter into this Consent Decree.

The United States alleges that the challenged underwriting practices have limited the availability or terms of availability of homeowners insurance in areas which are predominantly minority in population. Indeed, to the extent such areas have a large percentage of homes which are older or which have a low market value, the United States contends that Nationwide's policies have led to efforts to avoid doing business or to limit business in such areas due to the presence there of homes not insurable or subject to restrictions under those policies. The United States further maintains that this has led to an under served market for homeowners insurance in minority communities, particularly in urban areas.

The United States alleges that such business practices can cause damage to minority neighborhoods. If a property owner cannot obtain sufficient coverage to rebuild a dwelling that is destroyed by fire, for example, a vacant structure remains in the neighborhood and affects the values of surrounding properties. The lowered property values in turn make obtaining sufficient insurance coverage more difficult. The failure to provide equal coverage in minority areas thus can contribute to disinvestment and a downward spiral of community deterioration.

The United States further contends that there are numerous quality and insurable homes in urban areas under served through application of Nationwide's underwriting policies.

There has been no factual finding or adjudication with, respect to any matter alleged in or arising out of the Complaint in this case. Nor does Nationwide's entry into this Consent Decree constitute in any manner an admission that any of the challenged practices are unlawful. However, consistent with Nationwide's own plans to expand its business in the predominantly minority community, and to achieve certainty and finality, the parties freely and voluntarily enter into this Consent Decree to resolve the claims raised in this litigation. The parties agree that the terms of this Consent Decree provide a reasonable means of addressing the concerns of the United States and Nationwide.

For the most part, this Decree summarizes and codifies steps Nationwide had already determined to take based on its own assessment of its business interests. Through this Consent Decree, Nationwide reaffirms its commitment to make its business decisions without regard to race or national origin and to serve all communities in the areas in which it does business, regardless of the predominant race or national origin of residents of those areas. To complement its decision to change its underwriting policies, Nationwide has, among other things, devised a comprehensive plan to capture the urban market through focused advertising, increased agency presence in these areas, and community outreach efforts.

This Court has jurisdiction to consider and resolve these claims pursuant to 42 U.S.C. § 36-14(a) and 28 U.S.C. §§ 1331 and, 1343, and the parties agree to and request entry of this Consent Decree as indicated by the signatures appearing below.

THEREFORE it is hereby ORDERED, ADJUDGED and DECREED that:

1. Scope of decree. Except as otherwise specified below, all terms contained in Sections I through VIII shall apply everywhere in the country that Nationwide does business. For purposes of this Decree, the term "homeowners insurance," shall refer to all insurance policies covering owner occupied dwellings, including condominium policies, but not including mobile home coverage.

2. Injunction against discrimination. Nationwide, its officials, employees, contractors, agents, and through them, their employees and successors, are enjoined from engaging in any act or practice that unlawfully discriminates on the basis of race, color or national origin in the provision of homeowners insurance, imposing on the basis of race, color or national origin different terms or conditions for the availability of homeowners insurance, or making any statement that indicates any preference, limitation, or discrimination with respect to the provision of homeowners insurance based on race, color or national origin. This prohibition includes, but is not limited to, any use of the racial or ethnic composition of a city, zip code, neighborhood, block, or other geographic area as a factor in any decision regarding the availability, price, administration, terms, or marketing of homeowners insurance, except to the extent necessary to comply with this Consent Decree and any other applicable federal and state laws or regulations.

1. Criteria For Insurance Coverage Eligibility
   1. Schedule for implementation. Nationwide will implement the changes discussed in this Section A in all states in which it does homeowners business over a 24-month period beginning April 15, 1997. In Ohio, Pennsylvania, Maryland, Illinois, and Texas, it will implement these changes as of April 15, 1997, except as such changes relate to condominium policies, which will be implemented as of July 15, 1997, and use its current policy forms until the ultimate decision on new product(s) or modification of existing products, as described in paragraph III.A.3 below are determined.

   2. Underwriting standards changes and policy forms. Nationwide will change its underwriting standards to eliminate all references to and the use of the age of a dwelling and minimum value as eligibility criteria to obtain any Nationwide homeowners policy, as described above. Additionally, Nationwide will not consider the relationship between a home's market value and its calculated replacement cost in deciding eligibility for insurance. Each customer whose dwelling passes the dwelling condition inspection of the interior and exterior and otherwise satisfies Nationwide's underwriting guidelines will be given the option of selecting replacement cost coverage (guaranteed or non guaranteed) or repair cost coverage (i.e. replace with conventional materials and construction methods) on the dwelling and/or contents. Within twenty-four months from April 15, 1997, customers will also be given the option of purchasing replacement cost coverage with policy limits valued at less than 100% of the replacement cost of the home, such as at 75% of the replacement cost (the "value percentage"). For all such policies, in the event that the customer files a claim, Nationwide does not now and will not impose a coinsurance penalty on a partial loss, i.e. settle the claim pro rata by multiplying the claim amount by the value percentage. Rather, the claim shall be settled under the same standards as are applied to policies valued at 100% of the home's replacement cost, up to the limits of the policy. Nationwide will make available to the United States a copy of its underwriting eligibility standards for its inspection upon request.

   3. Study of other policy forms. Nationwide has undertaken to study whether it would be in its interests and the interests of its current and prospective homeowner policyholders to create and implement a single homeowners insurance policy, or make product modifications to existing products. The company agrees to continue to study and evaluate these concepts and to report to the United States in the near future on whether the concept of a single policy or current products with modifications would in fact better serve the interests of Nationwide, its customers, and the United States.

   4. Age of home and systems, market value not considered. Nationwide will not consider in any way the age or market value of a home as a criterion for eligibility for homeowners insurance coverage or for eligibility for certain types of coverage. Further, Nationwide will not consider the relationship between a home's market value and replacement cost in deciding eligibility for insurance coverage or the types of coverage that may be available. In addition, Nationwide will consider only the condition of a home's plumbing and wiring systems as revealed by inspections, and not the age of these systems, in determining eligibility for homeowners insurance. Consistent with the above and as agreed to by the parties, Nationwide will revise its homeowners insurance eligibility criteria with regard to electrical service amperage, knob and tube and aluminum wiring, and roof type to be set forth in its underwriting guidelines. Such guidelines will be provided to the United States within thirty (30) days of the entry of this Decree and thereafter upon request.

   5. Use of credit history as insurance eligibility criteria. Nationwide plans to consider, in some circumstances, an applicant's credit history in deciding whether to provide homeowners insurance. The use of credit histories is an evolving factor in insurance underwriting and the company shall not be precluded from making appropriate risk-based innovations. At the same time, the company agrees to implement safeguards to ensure that such evolving standards do not discriminate on the basis of race or national origin.

      This decree does not establish or approve any standards that Nationwide might use to evaluate creditworthiness. During the term of the Decree, however, Nationwide will compile and maintain complete records regarding its use of credit history as an underwriting standard, and report such information to the United States, as required by Section VI.l.m below. In addition, Nationwide agrees to comply fully with the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seg. In the event that the United States notifies Nationwide that the manner in which credit histories have been used may discriminate on an unlawful basis, the parties agree to enter discussions designed to address the issues. If the parties are unable to resolve any disagreement within thirty days, the matter may be submitted to the Court for resolution.

   6. Use of adjacent properties or subjective standards as insurance eligibility criteria. In determining whether a property is eligible for insurance, Nationwide will not consider whether an adjacent property is vacant or substandard, unless the adjacent use is demonstrated by an inspection to present a specific hazard to the property seeking insurance which would provide a basis for a claim. Nationwide will eliminate any underwriting guideline which indicates that an adjacent property is of high hazard on the sole basis that it is abandoned. Further, Nationwide will delete subjective, vague underwriting criteria such as "pride of ownership" and "good housekeeping."

   7. Notice letters to rejected applicants. If Nationwide determines that a home (1) does not qualify for Nationwide homeowners insurance; (2) does not qualify for replacement cost coverage; or (3) that an existing homeowners insurance policy must be canceled or not renewed (for reasons other than nonpayment of premium by the policyholder), Nationwide will notify the prospective or current customer(s) by letter which fully explains the reason(s) for the adverse determination consistent with federal and or state laws. Nationwide will also determine what repairs, if any, can be made to render the property insurable or eligible for replacement cost coverage. If such repairs are possible, Nationwide will additionally inform the prospective or current customer by letter that they may be eligible for insurance or replacement cost coverage if the specified repairs are made within a reasonable period of time (at least 90 days). Nationwide will not guarantee or be required to keep coverage in effect pending notification that the repairs have been made. The letter sent to a customer pursuant to this paragraph will include the name and telephone number of the agent and/or the underwriter and will encourage the customer to contact Nationwide if they need more time to make the necessary repairs, disagree with the determination made, or have any questions.

      For those risks that independent contractor agents determine do not qualify for Nationwide homeowners insurance, or replacement cost coverage, Nationwide will request that the agents provide Nationwide with the information upon which the agents made their determinations in accordance with subparagraph 9 below.

   8. Notice letters to present customers. Nationwide shall send a written notice in the form of Exhibit A to all its present homeowners policyholders who do not have replacement cost coverage, advising them of the changes in Nationwide's underwriting guidelines as set forth in Section III.A.2 above, and informing them that they may now be eligible to obtain replacement cost coverage. These notices shall be sent to customers upon their next annual renewal after the underwriting standards have been changed and in effect in their state, as set forth in Section III.A.1 above, except that in the states of Ohio, Pennsylvania, Maryland, Illinois, and Texas, the notice shall be sent upon the next renewal or within 45 days after April 15, 1997, whichever is later.

   9. Second-tier review of rejected applications. To assist in monitoring the progress of Nationwide's program to create greater access to homeowners insurance, all agents in the Cleveland, Baltimore, and Philadelphia metropolitan areas will be instructed to send to Nationwide's Urban Markets Development Office a copy of each letter written pursuant to Section III.A.7 above which involves customers who ultimately were not able to qualify for Nationwide homeowners insurance. A designated officer of the Urban Markets Office will undertake a study of these coverage rejections, obtaining further information from the agents in question as necessary, to determine if there is any change in (a) company policies, or (b) agent application of company policies or other agent practices which could allow for coverage of these and similarly situated individuals, consistent with sound business practices. The results of this second-tier review will be incorporated into Nationwide's business practices to the fullest extent feasible. In conducting this review, the Urban Markets Office will also use the testing results discussed in section V. The Urban Markets Office will annually report the results of its review for each city as set out in Section VII.

2. Criteria For Homeowners Insurance Coverage Pricing
   1. Excluded criteria. Nationwide has determined that in setting homeowners insurance prices, it will not consider in any way the age of the home (except (a) for earthquake coverage; or (b) as necessary to make available new home credits), the market value of the home, the relationship between the home's market value and replacement cost, the credit history of the prospective insurance customers, nor characteristics that are unfairly discriminatory and that are not reasonably relevant to the insurance risk. In particular, Nationwide will not consider the race or ethnicity of the homeowner or the minority percentage of the area in which the homeowner resides in setting a price for insurance coverage.

   2. Designation of territories. Nationwide will not define geographic rating territories in such a manner as to discriminate on the basis of race or national origin. Nationwide's designation of rating territories will be based upon non-discriminatory loss experience criteria and not on racial or ethnic factors or the racial composition of geographic areas, as permitted and/or required and/or approved by state insurance regulators.

3. Company Presence In Urban Areas: General.
   1. General. Nationwide intends to make affirmative efforts to increase its presence in predominantly minority areas of cities in which it does business. These efforts will both increase the number of agents and agencies located in such areas, as well as encourage agents located outside these areas to insure properties located in these areas.

   2. Notice to employees and agents. Nationwide will also communicate to its employees and agents that have any responsibilities relating to Nationwide's homeowners insurance business, its affirmative desire to increase the number of policies written and agencies located in predominantly minority areas. With respect to sales agents, this communication will take the form of a written letter or memorandum stating this company business goal and explaining that the company encourages this market penetration. This notice will be sent to all agents within 45 days after entry of this Decree.

   3. Efforts to increase agency presence in urban areas. Nationwide will use its best efforts to recruit and retain agents to locate in and serve predominantly minority neighborhoods in urban areas.

   4. Reassignment of files of terminated agents. Where an agent with an office in a predominantly minority area or with predominantly minority customers leaves Nationwide for any reason, Nationwide will make reasonable efforts to reassign the accounts of that agent to the agent or agents closest to the former agent's office.

4. Company Presence In Urban Areas, Sales/Service Centers
   1. General. As an additional method of achieving market penetration in urban communities, Nationwide has established Sales/Service Centers in predominantly minority areas in San Antonio, Texas and Chicago, Illinois. "Sales/Service Centers" will be designed to enhance Nationwide's presence in selected urban areas, to increase sales and claims service delivery to urban customers, especially those living in or near the center or urban areas. Generally, the Sales/Service Center will be responsible for prospecting for new business, setting up sales appointments, accepting billing payments, handling customer inquiries, claims settlement activities, review of risk selection and trends. Nationwide has also decided that by December 31, 1997, it will establish other Sales/Service Centers in predominantly minority areas in Philadelphia, PA; Cleveland, OH; and Baltimore, MD. Nationwide will continue this Sales/Service Center program over the life of this Decree by establishing annually, two additional Sales/Service Centers in locations to be chosen by Nationwide. Nationwide plans that the remaining Sales/Service Centers will be developed in Louisville, KY; Richmond, VA; Cincinnati, OH; Pittsburgh, PA; Atlanta, GA; Charlotte, N.C.; Columbus, OH; Little Rock, AK; Dallas-Fort Worth, TX; Chicago, IL; Memphis, TN; and Indianapolis, IN. In the event that during the term of this Decree, Nationwide desires to change one or more of these cities due to changed circumstances, Nationwide shall so notify the United States. Depending on the success of these initial efforts, Nationwide foresees adding to this list, and/or accelerating the pace of development of these Sales/Service Centers.

   2. Staffing of Sales/Service Centers. Each Sales/Service Center will be staffed with at least one sales agent, and sufficient personnel and equipment such that they can perform all sales, underwriting, and claims services provided to prospective and current Nationwide customers. To the extent possible, Nationwide will hire staff from the local community. For Sales/Service Centers serving Hispanic communities, at least one staff member shall be fluent in Spanish.

   3. Outreach services. Nationwide will also develop a program for implementation at each Sales/Service Center providing for Sales/Service Center staff to do the following:
      1. work on insurance education projects designed to inform residents of the community, including Spanish-speaking residents, about homeowners insurance availability, their insurance coverage options, and how to obtain sufficient coverage to actually replace their homes;

      2. work with neighborhood fair housing, community development, and other local groups to identify residents who may need homeowners insurance;

      3. work with local fire and police departments to educate residents on ways to reduce crime and fire hazards, promote neighborhood safety, and generally minimize risks; and

      4. send representatives to festivals, fairs, neighborhood association meetings, and other community events to identify and educate residents in need of homeowners insurance.

   4. Fair Housing Materials. Each Sales/Service Center will have available for distribution, free of charge to anyone who requests it, fair housing materials, including but not limited to government brochures explaining the Fair Housing Act, and brochures explaining Nationwide's goals and commitment to marketing and sales to the minority community.

5. Advertising And Marketing
   1. Use of marketing firm. Nationwide has contracted with DAR Public Relations, Inc., an established market research firm to determine and implement effective advertising strategies in minority communities.

   2. Brochures. Nationwide will develop, in both English and Spanish, a brochure describing its homeowners policy forms and coverage options. This brochure will specifically state Nationwide's interest in serving minority communities and its commitment to equal opportunities for insurance coverage. Nationwide will make all reasonable efforts to distribute both the English and Spanish versions of the brochure through such channels as real estate and housing professionals serving the minority community, church and community groups, and retail outlets in predominantly minority areas. Copies of these brochures will also be made available for distribution at the Sales/Service Centers. Nationwide will ensure that all these outlets receive a sufficient supply of both the English and Spanish versions of the brochures to distribute to all interested people.

   3. Equal opportunity notice: print media. Within forty-five (45) days after entry of this Consent Decree, all of Nationwide's print advertising for homeowners insurance will contain an equal housing opportunity logotype, statement, or slogan as described in the Fair Housing Advertising regulations of the United States Department of Housing and Urban Development, 24 C.F.R. Part 109 (1995), copy attached as Exhibit B. Nationwide will follow the guidance of Tables I and II of Appendix I to 24 C.F.R. Part 109 (1995) in selecting appropriate type size as well as a slogan, statement, logotype, and other standards for advertising.

   4. Equal opportunity notice: radio and TV. In all television and radio advertisements and promotions for homeowners insurance, except radio ads of fifteen seconds or less in duration, the statement "Equal Housing Opportunity" will be stated audibly. For radio ads, Nationwide shall have forty-five days after entry of this Decree to meet this standard. In the alternative, if a television advertisement or promotion for homeowners insurance includes a written statement appearing on the screen, the nondiscrimination statement may so appear; the nondiscrimination statement must continue to meet the requirements set forth in Appendix I to 24 C.F.R. Part 109 (1995) and must appear on the screen as long as any other written statement appears.

   5. Human models. Any Nationwide advertising that uses human models in videos, photographs, drawings or other graphic techniques will reasonably represent minority as well as white persons in such a manner as to indicate to the general public that Nationwide's products are available on a racially nondiscriminatory basis.

   6. Marketing plans. All of Nationwide's marketing plans and guidelines, including but not limited to Local Area Marketing Plan (LAMP) reports and associated maps, shall reflect Nationwide's commitment to serve predominantly minority communities and urban areas as indicated in this Decree. This subparagraph shall not prevent Nationwide from using race neutral demographic data such as percentage of household growth in selecting markets to target in addition to the predominantly minority communities targeted pursuant to this Decree.

   7. Public education. Nationwide's Sales/Service Center staff will conduct public education concerning home insurance needs and options, and may contract with a qualified organization to collaborate with the staff on such projects. Though this public education will not specifically exhort recipients to purchase homeowners insurance from Nationwide, recipients will be informed of Nationwide's efforts to reach out to minority communities, as well as the name, phone number, and location of the nearest Nationwide sales agent.

   8. Direct mail from Sales/Service Centers. Sales/Service Centers will mail a notice to non-condominium, owner-occupied single-family residences ⁽¹⁾ in the communities they serve, informing them of the availability of Nationwide homeowners insurance in the area, the desire of the company to sell policies in the community, and the name and- telephone number of the person(s) they may contact for further information. For residences in predominantly Hispanic neighborhoods, such notices shall also be in Spanish.

   9. Targeted print advertisements from Sales/Service Centers. During the term of this Decree, each Sales/Service Center will place advertisements for homeowners insurance in a local publication with a circulation that is predominantly African American in readership as well as Spanish language versions in a local Spanish language newspaper. Within 90 days after entry of this Decree, Nationwide will develop an appropriate ad campaign to reach the minority communities, and provide the details of such intended ad campaign to the United States upon development. Such ad campaign will include the placement of an advertisement eact year in the relevant city's "Black Pages" or comparable publication.

   10. Targeted radio and TV advertising from Sales/Service Centers. To advertise homeowners insurance, each Sales/Service Center will place advertisements on at least three different local radio and/or television stations with programming oriented to the African American and/or Hispanic community. The advertisements on Hispanic oriented stations shall be in Spanish. These targeted advertisements shall total one out of every five radio advertisements placed by Nationwide's management or corporate offices in each metropolitan area with a Sales/Service Center. Nationwide may vary the frequency of the spots and choice of stations for its advertising campaigns, as long as the above overall total is met for each one-year period.

   11. Cost of advertising borne by Nationwide. All advertising undertaken by or through the Sales/Service Centers pursuant to the terms of this Decree will be at the expense of Nationwide and at no cost to its agents.

1. Training By Nationwide
   1. Written notice of decree. Within 90 days following the entry of this Consent Decree, Nationwide will send to each of its officers, employees, and sales agents that have any responsibilities relating to Nationwide's homeowners insurance business, and through the sales agents, their employees a letter or memorandum informing them of the entry of this Decree and containing the following:
      1. a statement that a copy of this Decree will be provided at Nationwide's expense to any such person who desires one;

      2. a statement that any breach of or failure to comply with the requirements of this Decree will subject them to dismissal, contract termination, or other appropriate disciplinary action;

      3. a summary of the requirements of this Decree which explains the employee's and/or agent's duties under the decree;

      4. a summary of the employee's and/or agent's obligations to provide homeowners insurance without regard to the race, color, or national origin of the homeowner or the neighborhood in which the home is located;

      5. a statement that Nationwide cannot lawfully and will not reprimand, penalize, or otherwise retaliate in any way against any such person who requests or provides information regarding Nationwide's compliance with this Decree to the United States Department of Justice or who opposes such non-compliance; and

      6. a statement that it is Nationwide's management's direction, intent and goal to better serve the urban markets, and to grow market share of homeowners policies sold in urban markets. Further that Nationwide does not condone and specifically prohibits any of its employees and/or agents to take race or ethnicity into account in making decisions about coverage availability, pricing or services.

         Nationwide will provide plaintiff with a copy of the letter. Each person receiving the letter will sign and date a statement, or in the alternative, will contact a toll free telephone number provided by Nationwide, acknowledging that he or she has received, read, understands, and will act in accordance therewith. Nationwide will retain copies of all signed statements and documentary evidence of all telephonic contacts at a central location and will make them available to plaintiff upon request.

   2. Written notice to new employees and agents. Throughout the life of this Decree, Nationwide will provide a copy of the written notice described in the above paragraph to each new employee hired or sales agent contracted with, which have any duties relating to Nationwide's homeowners insurance business, after the effective date of this Decree, within thirty days after commencement of the employment or agency relationship. Each such new employee or agent shall sign and date a statement acknowledging that he or she has received, read, understands, and will act in accordance with the notice letter, and all such signed statements will be retained by Nationwide as indicated in the above paragraph.

   3. Company newsletters. Nationwide will provide compliance updates periodically in company newsletters throughout the term of this Consent Decree.

2. Training by qualified organization
   1. General. Nationwide will contract with a qualified organization approved by the United States to work with Nationwide to develop a training program for all employees and agents who have any responsibilities relating to Nationwide's homeowners insurance business, to inform them of the requirements to provide homeowners insurance without regard to the race, color, or national origin of the homeowner or the neighborhood in which the home is located; Nationwide's goals and policies regarding service to the minority community; and the requirements of this Consent Decree. The program will be developed and submitted to the United States within 60 days after entry of this Decree.

   2. Training Sessions. Nationwide and the qualified organization will work together to design a training session which will be mandatory for all employees and agents who have any responsibilities relating to Nationwide's homeowners insurance business. The training session may be conducted by such organization and Nationwide jointly and will include instruction on the following topics:
      1. the requirements to provide homeowners insurance without regard to the race, color, or national origin of the homeowner or the neighborhood in which the home is located;

      2. the requirements of this Consent Decree;

      3. Nationwide's goals and policies regarding compliance with the Consent Decree and market penetration into the minority community;

      4. the special insurance needs and problems of residents of lower-income, minority areas; and

      5. marketing, sales, and service to a racially diverse market.

   3. Training for new employees and agents. On at least an annual basis during the term of this Consent Decree, Nationwide shall conduct training sessions for all employees and agents who have any responsibilities relating to Nationwide's homeowners insurance business, retained after the initial training sessions described in this Section have been completed. The training sessions for new employees and agents shall be identical to the training sessions described above in this Section.

1. Development and implementation of testing program. Nationwide will contract with a qualified organization approved by the United States to develop and implement a program to test for racial and national origin discrimination in Nationwide's provision of homeowners insurance. Such testing shall be conducted in ten (10) cities per year during the life of this Decree. The qualified organization will first submit a proposal to Nationwide outlining the methodology, cost, and approach to be used. The proposal will include a sufficient number of tests in each city per year to enable the parties to fairly assess compliance with this Decree. Once the proposal is finalized and accepted by Nationwide, and no later than 60 days after entry of this Decree, Nationwide will submit the proposal to the United States for its approval or objection within thirty (30) days. Nationwide may submit to the United States a proposal providing for testing in fewer than ten cities per year, provided that the testing proposal still fully meets the remedial objectives of this Consent Decree. The United States, approval shall not be unreasonably withheld. If the United States objects to the proposal, the proposal shall not be implemented and the parties will attempt to resolve informally their disagreement. If the parties have not resolved their differences within thirty (30) days thereafter, the matter may be submitted to the Court for resolution.

2. Use of testing results. Nationwide will review the testing results with the relevant individual employees and sales agents and will use the results to determine how to address any concerns with them and whether changes in training, minority outreach or other practices related to this Decree are necessary. Nationwide will provide copies of all test results to the United States. The tests are for self-monitoring purposes only, will be kept confidential, and will not be used by the United States in a lawsuit against Nationwide, except that the parties may use and rely on the testing results in any action taken to enforce the terms and provisions of this Decree.

1. Financial assistance for homebuyers. Over the six year term of this Decree, Nationwide will provide a total of $2.2 million per year to provide financial assistance for low- and moderate-income homebuyers seeking to purchase and/or repair single-family owner-occupied homes in predominantly minority neighborhoods in at least five but not more than ten of the following metropolitan areas: Philadelphia, PA; Cleveland, OH; Baltimore, MD; Louisville, KY; Richmond, VA; Cincinnati, OH; Pittsburgh, PA; Atlanta, GA; Charlotte, N.C.; Columbus, OH; Toledo, OH; Dallas-Fort Worth, TX; Chicago, IL; Memphis, TN; and Indianapolis, IN. In the event that during the term of this Decree, Nationwide desires to change one or more of these cities due to changed circumstances, Nationwide shall so notify the United States.

   The financial assistance program shall be administered in each metropolitan area by either the Neighborhood Reinvestment Corporation or the Local Initiative Support Corporation (L.I.S.C.), or if neither of these groups has affiliates in that area, then by the National Cooperative Bank Development Corporation. The funds shall be used in each metropolitan area to provide one or more of the following types of financial assistance: downpayment assistance, closing cost assistance, second mortgages, purchase/rehab loans, below market interest rate loans, and homeownership counseling. The particular type of assistance provided in each metropolitan area shall be chosen by the administering organization based upon its experience in and knowledge of the area, and its assessment of the types of assistance which would best carry out the purposes of this Consent Decree in that metropolitan area. These determinations shall be subject to the approval cf the parties.

   Six months after entry of this Decree and every six months thereafter during the term of this Decree, each administering organization shall submit a report to both Nationwide and the United States detailing how the funds have been spent during that reporting period in each metropolitan area.

2. Notice of financial support. Local agencies and groups distributing the community development funds provided by Nationwide will notify recipients that Nationwide is financially supporting the program, explain Nationwide's program as described in this Consent Decree, and provide recipients with the name, telephone number, and address of the nearest Nationwide agent or Sales/Service Center. Agencies and groups providing this information will make it clear that recipients are under no obligation to do business with Nationwide.

1. Materials to be kept at a central location. To assist all parties in monitoring the progress of Nationwide's plan set out in this Decree, Nationwide shall maintain the following records at a central location and shall make such records available to the United States upon request:
   1. Notices sent to present customers regarding their opportunity to purchase replacement cost coverage (see Section III.A.8) and notice letters sent to rejected applicants (see Section III.A.7);

   2. Notice letters sent to agents pursuant to the second-tier review of rejected applications, along with all other information analyzed pursuant to this review (see Section III.A.9);

   3. Notice letters sent to agents explaining Nationwide's desire to increase its agent presence in targeted areas (see Section III.C.2), along with a record indicating when letters were sent and who received them;

   4. Records of the number of new policies written in predominantly minority areas, including the name, address, and telephone number of the policyholder, the type and amount of coverage, and the date the policy was executed;

   5. Records of the numbber of new offices opened in predominantly minority areas, including the name, office address, and telephone number of the sales agent(s), along with the date the office was opened;

   6. Records reflecting the location, opening date, staff, equipment, and budget of each Sales/Service Center (see Section III.D);

   7. A log of outreach and public education events held or sponsored by Sales/Service Center staff (see Sections III.D.3 & III.E.7), as well as sample copies of notices sent by each Center pursuant to Section III.E.8;

   8. A sample paper, audio cassette, or videocassette copy (as appropriate) of each print, radio, or television advertisement placed pursuant to Section III.E;

   9. Training letters sent to employees (Section IV.A.1 and IV.A.2), along with copies of signed acknowledgments and documentary evidence of telephone responses;

   10. Copies of each company newsletter which refers to the work described in this Decree (see Section IV.A.3);

   11. Records reflecting, for each training session held (see Sections IV.B.1, IV.B.2, and IV.B.3), the date, location, name and title of trainer(s), topics covered, and written materials used;

   12. All records regarding testing conducted pursuant to this Decree (see Section V), including copies of the testing reports and any analyses thereof;

   13. Records identifying all homeowners insurance applications which were declined in whole or in part based upon the credit history of the insured, including the name(s)and address of the applicant(s), the address of the property to be insured, the type of insurance applied for, the complete list of reasons why the application was denied, and the documents containing the credit information upon which the decision was based (see Section III.A.5). The United States certifies that the Department of Justice has complied and will comply with the Right to Financial Privacy Act, 12 U.S.C. §§ 3401, et seg.;

   14. Records of any oral or written complaint alleging that Nationwide has engaged in discrimination on the basis of race, color, or national origin in the provision of homeowners insurance, including full details of the complaint and any action taken by Nationwide.

2. Right of review and consultation. Wherever in this Decree Nationwide is required to make documents, information, or a compliance plan available to the United States, the United States shall have the right to review such documents or information and object or seek modifications on the grounds that Nationwide's proposal will not achieve the objectives of this Consent Decree. The parties will then attempt to resolve informally the United States' objection. If the parties cannot resolve their dispute within thirty (30) days thereafter, they may bring it before the Court for resolution.

3. Progress reports. Six months after the effective date of this Decree, and at the annual anniversary date of the entry of this Decree, Nationwide shall submit to the United States progress reports on the program described in this Decree. Such reports shall contain:
   1. A paragraph-by-paracrraph evaluation of the progress made with respect to Sections III through VI of the decree, including an analysis of the benefits to individuals in predominantly minority communities; and

   2. Documentation sufficient to show Nationwide's submission of proposed business practice modifications to state insurance regulatory authorities and the states' actions thereon.

1. Modification of decree. The parties agree that flexibility will be required to achieve the goals of the decree, and desire to resolve all disputes regarding its implementation without resort to judicial intervention. To this end, the parties agree that particular terms of the decree may be modified upon written agreement of the parties to be filed with the Court. Further, any motion to modify the decree will not be filed absent 45 days' notice to opposing parties, during which time the parties are required to make good faith efforts to resolve their disputes.

2. The United States, claims against Nationwide. Entry of this Decree will resolve all claims in the United States' Complaint against Nationwide in this action pursuant to the Fair Housing Act, 42 U.S.C. §§ 3601 et seg., and all claims that could have been alleged by the United States against Nationwide pursuant to 42 U.S.C. § 3614(a), based upon Nationwide's practices up to and including the date of entry of this Decree. Nothing in this Decree is intended to or does affect any claims against Nationwide alleging violation of the Fair Housing Act other than those claims of the United States set forth above.

3. Term of decree. This Consent Decree will become effective upon entry by the Court. The Court will retain jurisdiction of this case for at least six years from the date of entry of the Consent Decree. At the end of this time, the decree will expire and the Court will dismiss the case with prejudice, unless the United States petitions the Court to extend the term of the decree. At least 45 days in advance of filing such a petition, the United States will notify Nationwide, which may file a response in opposition within 15 days of the filing of the petition. The Court will extend the decree and its jurisdiction if it has a reasonable basis for concluding that the provisions of this Decree have not been achieved, and that Nationwide has not taken all reasonable steps under the decree to carry out its terms.

SO ORDERED this ____[10^th]_____ day of ___[March]___, 1997.

_______/s/__________________

UNITED STATES DISTRICT JUDGE

The Undersigned apply for and consent to the entry of this Order:

THOMAS L. CRUMINE
Senior Vice President Proerty/Insurance
Nationwide Mutual Insurance Company and
Nationwide Mutual Fire Insurance Company
One Nationwide Plaza
Columbus, OH 43215

W. SIDNEY DRUEN
Senior Vice President and General Counsel
THOMAS W. DIETRICH (0015792)
Vice President and Associate General Counsel
DAVID L. WHITE
Counsel
Nationwide Mutual Insurance Company and
Nationwide Mutual Fire Insurance Company
One Nationwide Plaza
Columbus, OH 43215
(614) 249-7638

1. For all purposes of this Order, the term "single-family home" shall mean any owner-occupied one- to four-unit dwelling.