Background
There has been much uncertainty in the markets for commercial lines property and casualty insurance coverage in light of the substantial losses experienced by the industry on September 11, 2001. Soon after the tragic events, many reinsurers announced that they did not intend to provide coverage for acts of terrorism in future reinsurance contracts. This led to a concerted effort on behalf of all interested parties to seek a temporary federal backstop to calm market fears over future terrorist attacks and the ability of the insurance industry to allocate capital to provide coverage for these unpredictable and potentially catastrophic events. Congress recently enacted the Terrorism Risk Insurance Act of 2002 (the "Act"), which took effect immediately upon the President's signature on November 26, 2002. This federal law provides a federal backstop for defined acts of terrorism and imposes certain obligations on insurers.
This Bulletin advises insurers of certain provisions of the Act that may require insurers to submit a filing in this State and to establish a voluntary procedure for insurers to use to expedite the filing and timely review of the disclosure notices, policy language, and the applicable rates that are discussed in the Act.
Subsection 102(6) of the Act defines "insurers" for purposes of the Act. "Insurer" means any entity and affiliate thereof-(A) that is-(i) licensed or admitted to engage in the business of providing primary or excess insurance in any State; (ii) an eligible surplus line carrier listed on the Quarterly Listing of Alien Insurers of the NAIC, or any successor thereto; (iii) approved for the purpose of offering property and casualty insurance by a Federal agency in connection with maritime, energy, or aviation activity; (iv) a State residual market insurance entity or State workers' compensation fund; (B) that receives direct earned premium for any type of commercial property and casualty insurance coverage. In addition, the Secretary of Treasury may extend the Act to other classes or types of captive insurers and other self-insured arrangements by municipalities and other entities as well as to group life insurance.
Subsection 102(12) of the Act states that the term "property and casualty insurance" (A) means commercial lines of property and casualty insurance, including excess insurance, workers' compensation insurance, and surety insurance, and (B) does not include crop or livestock insurance, private mortgage or title insurance, financial guaranty insurance issued by monoline financial guaranty insurance corporations, medical malpractice, health or life insurance including group life, flood insurance provided under the National Flood Insurance Act, or reinsurance or retrocessional reinsurance.
All insurers, as defined in the Act, are required by the Act to participate in the Terrorism Insurance Program (the Program) and make coverage available for "insured losses" in all of their covered commercial lines policies. For purposes of the Act, as discussed in more detail in the next sections of this Bulletin, the term "insured loss" means a loss resulting from a federally certified act of terrorism (including an act of war, in the case of workers' compensation) that is covered by a policy within the scope of the Act if the loss occurs within the United States, in an air carrier, to a United States vessel, or at the premises of a United States mission. The Act also excludes from the definition of "insured loss" any amounts awarded in a civil action that are attributable to punitive damages. The Act further requires insurers to make available property and casualty insurance coverage for insured losses, which does not differ materially from the terms, amounts, and other coverage limitations applicable to losses arising from events other than acts of terrorism.
The Act voids any terrorism exclusions in a contract for property and casualty insurance that is in force on the date of enactment of this Act to the extent that the contract excludes losses that would otherwise be insured losses. The Act also voids any state approval of any terrorism exclusion from a contract for property or casualty insurance that is in force on the date of enactment of this Act to the extent that it excludes losses that would otherwise be insured losses. The Act allows insurers to "reinstate a preexisting provision in a contract for commercial property and casualty insurance that is in force on the date of enactment of this Act and that excludes coverage for acts of terrorism only" if one of two conditions are met: (1) if the insurer must have received a written statement from the insured that affirmatively authorizes such reinstatement; or (2) if the insurer has provided notice to the insured, at least 30 days before any such reinstatement, and the insured fails to pay any increased premium charged by the insurer for providing such terrorism coverage.
Definition of "Insured Loss"
Subsection 102(5) of the Act provides a definition of insured loss. It states: "the term 'insured loss' means any loss resulting from an act of terrorism (including an act of war, in the case of workers' compensation) that is covered by primary or excess property and casualty insurance issued by an insurer if such loss-(A) occurs within the United States; or (B) occurs to an air carrier (as defined in section 40102 of title 49, United States Code), to a United States flag vessel (or a vessel based principally in the United States, on which United States income tax is paid and whose insurance coverage is subject to regulation in the United States), regardless of where the loss occurs, or at the premises of any United States mission."
However, "act of terrorism" is a defined term in the Act, which significantly narrows the Act's scope of coverage. As a result, there are essentially two distinct types of losses that a business might face that result from terrorism. One type of loss is the insured loss that is defined within and covered by the provisions of the Act. For convenience, this Bulletin will refer to losses resulting from federally certified acts of terrorism as "certified losses." A terrorism loss that does not fit within the definition of insured loss as described in the Act will be referred to as a "non-certified loss." The most significant difference is that the certified losses will always involve a foreign person or foreign interest, while the non-certified losses may not.
Please note that the preemption of this State's filing law applies only to contract language that is applicable to certified losses. If an insurer intends to reinstate an exclusion on in-force policies as allowed under the Act, it may only reinstate an exclusion that previously existed on the policy.
This State has allowed exclusions on coverage for acts of terrorism only under certain circumstances, and those limitations will continue to apply to exclusions relating to non-certified losses. For policies providing property insurance coverage the following limitations apply to non-certified losses:
* Exclusion for acts of terrorism only apply if the acts of terrorism result in industry-wide insured losses that exceed $25,000,000 for related incidents that occur within a 72 hour period;
* Exclusions for acts of terrorism are not subject to the limitations above if:
o The act involves the use, release, or escape of nuclear materials, or that directly or indirectly results in nuclear reaction or radiation or radioactive contamination;
o The act is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or
o Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials.
For policies providing liability insurance coverage the following limitations apply to non-certified losses:
* Exclusion for acts of terrorism only apply if the acts of terrorism result in industry-wide insured losses that exceed $25,000,000 for related incidents that occur within a 72 hour period; or
* Fifty or more persons sustain death or serious physical injury for related incidents that occur within a 72 hour period. For purposes of this provision serious physical injury means:
o Physical injury that involves a substantial risk of death;
o Protracted and obvious physical disfigurement; or
o Protracted loss of or impairment of the function of a bodily member or organ.
* Exclusions for acts of terrorism are not subject to the limitations above if:
o The act involves the use, release, or escape of nuclear materials, or that directly or indirectly results in nuclear reaction or radiation or radioactive contamination;
o The act is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or
o Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials.
Definition of "Act of Terrorism"
Subsection 102(1) defines an act of terrorism for purposes of the Act. Paragraph 102(1)(A) states: "The term 'act of terrorism' means any act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State, and the Attorney General of the United States-(i) to be an act of terrorism; (ii) to be a violent act or an act that is dangerous to-(I) human life: (II) property; or (III) infrastructure; (iii) to have resulted in damage within the United States, or outside the United States in the case of-(I) an air carrier or vessel described in paragraph (5)(B); or (II) the premises of a United States mission; and (iv) to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion." Paragraph 102(1)(B) states: "No act shall be certified by the Secretary as an act of terrorism if-(i) the act is committed as part of the course of a war declared by the Congress, except that this clause shall not apply with respect to any coverage for workers' compensation; or (ii) property and casualty insurance losses resulting from the act, in the aggregate, do not exceed $5,000,000." Paragraphs 102(1)(C) and (D) specify that the determinations are final and not subject to judicial review and that the Secretary of the Treasury cannot delegate the determination to anyone.
This State will not allow exclusions of coverage for acts of terrorism that fail to be certified losses solely because they fall below the $5,000,000 threshold in Paragraph 102(1)(B) on any policy that provides coverage for certified losses. Insurers required to file policy forms may submit language containing coverage limitations for certified losses that exceed $100 billion.
Policies which exclude or limit coverage for non-certified acts of terrorism (i.e., those which are not "acts of terrorism" as narrowly defined for purposes of the federal Act) should also define what constitutes an "act of terrorism" for purposes of the policy language. For non-certified losses, this State would accept the following definition, or one that is more favorable to policyholders:
The phrase "non-certified act of terrorism" means a violent act or an act that is dangerous to human life, property, or infrastructure that is committed by an individual or individuals and that appears to be part of an effort to coerce a civilian population or to influence the policy or affect the conduct of any government by coercion, and the act is not certified as a terrorist act pursuant to the Federal Terrorism Risk Insurance Act of 2002.
Submission of Rates, Policy Form Language, and Disclosure Notices
Insurers are required to comply with the Act and with state law. Subparagraph 106(a)(2)(B) of the Act states that "during the period beginning on the date of enactment of this Act and ending on December 31, 2003, rates and forms for terrorism risk insurance coverage covered by this title and filed with any State shall not be subject to prior approval or a waiting period under any law of a State that would otherwise be applicable…" The subsection further notes that rates remain subject to subsequent regulatory review based on whether a rate is "excessive, inadequate, or unfairly discriminatory" and other applicable state law. Similarly, policy forms are subject to subsequent review based on all applicable laws and regulations. Thus, a system is created where insurers can immediately implement prospective rate changes for coverage of insured losses related to acts of terrorism as defined in the Act. Policy language for terrorism risk and insurance covered by the Act (granting coverage or excluding coverage for insured losses) is only exempt from prior approval or waiting periods to the extent that the policy language relates to insured losses as defined in the Act. Other policy language changes and related pricing remain subject to current applicable state law and will be processed in an expedited manner.
If an insurer relies on an advisory organization to file loss costs and related rating systems on its behalf, no rate filing is required unless an insurer plans to use a different loss cost multiplier than is currently on file for coverage for certified losses. The rate filing should provide sufficient information for the reviewer to determine what price would be charged to a business seeking to cover certified losses. This State will accept filings that contain a specified percentage of premium to provide for coverage for certified losses. Insurers may also choose to use rating plans that take into account other factors such as geography, building profile, proximity to target risks and other reasonable rating factors. The insurer should state in the filing the basis that it has for selection of the rates and rating systems that it chooses to apply. The supporting documentation should be sufficient for the reviewer to determine if the rates are excessive, inadequate, or unfairly discriminatory.
Insurers subject to policy form regulation must submit the policy language that they intend to use in this State within a reasonable time after it is implemented. The Superintendent considers 30 days to be a reasonable time for purposes of completing an expedited filing of policy language. The policy should define acts of terrorism and both certified and non-certified losses, or substantially similar terms consistent with the structure of the policy, in ways that are consistent with the Act, state law, and the guidance provided in this Bulletin. The definitions, terms, and conditions should be complete and should accurately describe the coverage that will be provided in the policy.
Until new policy language is developed and implemented, insurers with exclusions or limitations relating to terrorism in forms that are currently approved, or currently in use and exempt from prior approval, may continue using those forms for new and renewal business, provided that notice of coverage for certified losses is given to policyholders in a manner substantially similar to the required notice for in-force business, and amendatory endorsements consistent with the requirements described in this Bulletin are provided at the earliest feasible date.
The Superintendent requests that the disclosure notices be filed for informational purposes, along with the policy forms, rates, and rating systems, as they are an integral part of the process for notification of policyholders in this State and should be clear and not misleading to business owners in this State. The disclosures should comply with the requirements of the Act and should be consistent with the policy language and rates filed by the insurer. Details about the applicable requirements are contained in the following two paragraphs. Two model disclosure notices developed by the National Association of Insurance Commissioners are attached to this Bulletin, one for use if the existing policy form contains an exclusion for terrorist acts, the other for use if the existing policy already covers certified losses.
In-force business receives special consideration under the Act. Subsection 105(a) voids any terrorism exclusion on existing policies to the extent that it excludes losses that would otherwise be insured losses as defined in the Act. It details a process for insurers and policyholders to reinstate the voided exclusions. Under that process, an insurer may reinstate a preexisting provision in a contract that is in force on the date of enactment of this Act and that excludes coverage for an act of terrorism only if the insurer has received a written statement from the insured that affirmatively authorizes such reinstatement or if the insured fails to pay any increased premium charged by the insurer for providing such coverage and the insurer provided notice at least 30 days before any such reinstatement, as provided in Section 105 of the Act.
There are also disclosures required for new business and renewal business. Although voidance of contract language is not an issue, insurers must make certain disclosures to policyholders to remain in compliance with the Act. Paragraph 103(b)(2) requires insurers to provide a clear and conspicuous disclosure to the policyholder of the premium charged for covered insured losses and advise that a federal program exists where the federal government will share significant portions of major insured losses with insurers.
Effect on Workers' Compensation Insurance Coverage
Treatment of workers' compensation is slightly different than for other property and casualty insurance coverages. First, Subparagraph 102(1)(B)(i) provides that the federal program will share the risk of loss for workers' compensation for acts of war in addition to acts of terrorism. This treatment occurs because of the statutory nature of the workers' compensation program, which does not provide an exclusion for losses resulting from an act of war. Under Maine law there is no exclusion for workers' compensation losses resulting from an act of war. There is no provision in the Act that would preempt the compulsory coverage aspects of workers' compensation insurance policies. In other respects, however, workers' compensation coverage is treated under the Act as any other covered line of insurance. Therefore, the notice requirements of Paragraph 103(b)(2) and the mandatory "make available" requirements of Subsection 103(c) apply to workers' compensation policies. Accordingly, workers' compensation insurers are required to separately state the portion of the estimated premium being charged a policyholder for acts of terrorism, as defined in the Act. As this State's workers' compensation law does not have any exclusions for terrorism or war, neither insurers nor policyholders may use the Act's procedures to create such an exclusion. With regard to the filing and approval of rates and forms, workers' compensation insurers are covered by Subparagraph 106(a)(2)(B) of the Act, which waives any state prior approval or time requirements for the first year of the Act. Such insurers may therefore follow the alternative filing procedures established in this Bulletin.
Coverage for Fire Losses Resulting from Terrorism
In this State, the requirements for fire coverage are established by law and where applicable, must meet or exceed the provisions of the Standard Fire Policy pursuant to 24-A M.R.S.A. §§ 3002 and 3003.1 These legal requirements cannot be waived. Thus, a policyholder cannot voluntarily waive this statutorily mandated coverage.
1 Although some state fire policy laws have an exemption for inland marine policies, Maine's does not.
Information for SERFF Filers
For insurers that use the SERFF system, there will be an expedited filing form in that system for your use.
Explanation and Instructions for Terrorism Rate and Form Review
The Act preempts any state prior approval law pertaining to rates or forms-including any law that imposes waiting periods-prior to use of a rate or form for purposes of terrorism coverage, as defined by the Act. This preemption remains in effect for the first year of the Act. Consistent with these requirements of the Act, this Bulletin establishes a system for rates and forms, requiring insurers or advisory organizations to file their rates and forms no later than 30 days after their first date of use. The procedure for obtaining an expedited review of such rates and forms is set forth below. However, nothing in this Bulletin shall be construed as establishing a rate or form filing review or approval requirement where one does not otherwise exist under Maine law. Policy language changes and related pricing for non-certified losses remain subject to current applicable state law and will be processed in an expedited manner.
Forms with Instructions
Attached to this Bulletin is a uniform filing transmittal form that has been agreed upon by this State and other states. An insurer or advisory organization wishing to receive expedited treatment of its filing shall complete the EXPEDITED FILING TRANSMITTAL DOCUMENT FOR TERRORISM RISK INSURANCE FORMS AND PRICING as directed. In addition, the insurer(s) or advisory organization submitting the filing must certify that the filing is consistent with this Bulletin, state law and the provisions of the Act. Certification is made by signing the appropriate blank on the transmittal form. Filings for policy language changes and related pricing for non-certified losses, which remain subject to current applicable state law, may be made using the attached filing transmittal form. These filings will be processed in an expedited manner. The attached expedited filing transmittal document replaces all otherwise applicable filing forms and filing transmittal forms for these filings.
To be complete, an expedited filing must include the following:
1. A completed, certified Expedited Filing Transmittal Document for each insurer or advisory organization.
2. One copy of each policy form or endorsement that the insurer intends to use, unless the insurer has given an advisory organization authorization to file them on its behalf.
3. A copy of the rates and rating systems along with the supporting documentation, if required.
4. A copy of any disclosure notices that will be used to convey information to policyholders in this State.
5. A filing fee of $20 ($20 per company when the filing is made on behalf of a group of affiliated companies).
6. A postage-paid, self-addressed envelope large enough to accommodate the return. Note that a comparable filing transmittal form is available in SERFF.
If this filing is for multiple companies, please provide a copy of the transmittal header and a separate filing fee for each company, and two extra copies of the cover letter.
Effective Date
The effective date of the Act is November 26, 2002. The expedited filing process outlined herein is effective immediately, and shall expire on December 31, 2003. The remaining requirements described in this Bulletin are effective immediately, and shall expire on December 31, 2005, unless Congress extends the duration of the Act.
December 17, 2002 _____________________________
ALESSANDRO A. IUPPA
Superintendent of Insurance
NOTE: This Bulletin is intended solely for informational purposes. It is not intended to set forth legal rights, duties, or privileges, nor is it intended to provide legal advice. Readers are encouraged to consult applicable statutes and rules and to contact the Bureau of Insurance at (207) 624-8475 if they need additional information.
EXPEDITED FILING TRANSMITTAL DOCUMENT
FOR TERRORISM RISK INSURANCE FORMS AND PRICING
This page applies to the following state(s) ___________
Indicate Type of Filing Department Use only
[ ] Filing Related to Certified Losses
[ ] Filing Related to Non-Certified Losses
[ ] Filing Applicable to Both Certified and Non-Certified Losses
Company Name(s)
Domicile
NAIC #
FEIN #
Contact Info for Filer
Name and address of Filer(s)
Telephone #
FAX #
e-mail
Filing information
Line of Insurance (see attachment)
Company Program Title (Marketing
title) (if applicable)
Filing Type ** see note below
This application is used with:
Effective Date Requested
Filing date
Company Tracking Number
Date filing approved in domiciliary
state, if applicable
Component/Form Name
/Description/Synopsis Form # or Rate Page
Include edition date Replacement
Or withdrawn? If replacement,
give form # or rate
page(s) it replaces Previous State
Filing Number,
if required
by state
01 [ ] Replacement
[ ] Withdrawn
[ ] Neither
02 [ ] Replacement
[ ] Withdrawn
[ ] Neither
To be complete, a filing must include the following:
* A completed Expedited Filing Transmittal Document for each insurer or advisory organization.
* One copy of each endorsement, disclosure form or other policy language, unless the insurer has given an advisory organization authorization to file them on its behalf.
* A copy of the rates, rating systems and supporting documentation.
* The appropriate filing fees, if required
* A postage-paid, self-addressed envelope large enough to accommodate the return.
The insurer(s) submitting this filing certifies that it:
[] Is in compliance with the terms of the Terrorism Risk Insurance Act of 2002 and the laws of this state; and
[] Is in compliance with the requirements of the bulletin containing the voluntary expedited filing procedures.
___________________________
Signature ___________________________
Print Name: ___________________________
Title:
COMPLETED SAMPLE FORM
EXPEDITED FILING TRANSMITTAL DOCUMENT
FOR TERRORISM RISK INSURANCE FORMS AND PRICING
This page applies to the following state(s) ___________
Indicate Type of Filing Department Use only
[X] Filing Related to Certified Losses
[ ] Filing Related to Non-Certified Losses
[ ] Filing Applicable to Both Certified and Non-Certified Losses
Company Name(s)
Domicile
NAIC #
FEIN #
ABC Insurance Company
NY
0000-99999
99-1234567
Contact Info for Filer
Name and address of Filer(s)
Telephone #
FAX #
e-mail
John Doe (Form Filing)
Regulatory Compliance
ABC Insurance Co.
12345 Fifth Ave
New York, NY 10234
501-555-5555
501-555-5551
John.doe@abcins.com
Filing information
Line of Insurance (see attachment) Commercial General Liability
Company Program Title (Marketing
title) (if applicable) General Liability Program
Filing Type ** see note below Form (Endorsement)
This application is used with: (Insert policy form number to which the application attaches)
Effective Date Requested 01-01-02 (Enter your desired effective date)
Filing date (Date Company sends filing)
Company Tracking Number ABC-EP-2001-01 (Enter your filing tracking number, if applicable)
Date filing approved in domiciliary
state, if applicable Not approved yet. Filed on same date as this filing.
Component/Form Name
/Description/Synopsis Form # or Rate Page
Include edition date Replacement
Or withdrawn? If replacement,
give form # or rate
page(s) it replaces Previous State
Filing Number,
if required
by state
01 Certified Loss Exclusion CG XX XX 12 02 [X] Replacement
[ ] Withdrawn
[ ] Neither List form number of previous terrorism exclusion
02 [ ] Replacement
[ ] Withdrawn
[ ] Neither
To be complete, a filing must include the following:
* A completed Expedited Filing Transmittal Document for each insurer or advisory organization.
* One copy of each endorsement, disclosure form or other policy language, unless the insurer has given an advisory organization authorization to file them on its behalf.
* A copy of the rates, rating systems and supporting documentation.
* The appropriate filing fees, if required
* A postage-paid, self-addressed envelope large enough to accommodate the return.
The insurer(s) submitting this filing certifies that it:
* Is in compliance with the terms of the Terrorism Risk Insurance Act of 2002 and the laws of this state; and
* Is in compliance with the requirements of the bulletin containing the voluntary expedited filing procedures.
___________________________
Signature ___________________________
Print Name: ___________________________
Title:
POLICYHOLDER DISCLOSURE:
NOTICE OF TERRORISM INSURANCE COVERAGE
You are hereby notified that under the Terrorism Risk Insurance Act of 2002, effective November 26, 2002, you now have a right to purchase insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act: The term "act of terrorism" means any act that is certified by the Secretary of the Treasury-in concurrence with the Secretary of State, and the Attorney General of the United States-to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property; or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of an air carrier or vessel or the premises of a United States mission; and to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Coverage under your existing policy may be affected as follows:
ANY IN-FORCE TERRORISM EXCLUSIONS FOR ACTS OF TERRORISM, AS DEFINED IN THE ACT, ALREADY CONTAINED IN YOUR POLICY OR INCLUDED IN AN ENDORSEMENT ARE NULLIFIED AS OF NOVEMBER 26, 2002.
YOU SHOULD KNOW THAT COVERAGE PROVIDED BY THIS POLICY FOR LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM IS PARTIALLY REIMBURSED BY THE UNITED STATES UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. UNDER THIS FORMULA, THE UNITED STATES PAYS 90% OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAID BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM CHARGED FOR THIS COVERAGE IS PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.
SELECTION OR REJECTION OF TERRORISM INSURANCE COVERAGE
UNDER FEDERAL LAW, YOU HAVE THIRTY (30) DAYS TO CONSIDER THIS OFFER OF COVERAGE FOR TERRORIST ACTS AND SUBMIT THE PREMIUM REQUIRED. IF WE DO NOT RECEIVE THE QUOTED PREMIUM BY ___________, THE TERRORISM EXCLUSION NULLIFIED BY THE ACT WILL BE REINSTATED ON __________, AND YOU WILL NOT BE COVERED FOR LOSSES ARISING FROM TERRORIST ACTS THAT WERE PREVIOUSLY EXCLUDED.
[ ]
I hereby elect to purchase Terrorism coverage for a prospective premium of $_____________.
[ ]
I hereby elect to have the exclusion for terrorism coverage reinstated. I understand that I will have no coverage for losses arising from acts of terrorism that were previously excluded.
____________________________
Policyholder/Applicant's Signature
____________________________
Print Name
____________________________
Date
___________________________
Insurance Company
___________________________
Policy Number
POLICYHOLDER DISCLOSURE:
NOTICE OF TERRORISM INSURANCE COVERAGE
Coverage for acts of terrorism is already included in your current policy. You should know that, effective November 26, 2002, under your existing coverage, any losses caused by certified acts of terrorism would be partially reimbursed by the United States under a formula established by federal law. Under this formula, the United States pays 90% of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage. The portion of your annual premium that is attributable to coverage for acts of terrorism is: $___________.
I ACKNOWLEDGE THAT I HAVE BEEN NOTIFIED THAT UNDER THE TERRORISM RISK INSURANCE ACT OF 2002, ANY LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM UNDER MY POLICY COVERAGE WILL BE PARTIALLY REIMBURSED BY THE UNITED STATES AND I HAVE BEEN NOTIFIED OF THE AMOUNT OF MY PREMIUM ATTRIBUTABLE TO SUCH COVERAGE.
_____________________________
Policyholder/Applicant's Signature
_____________________________
Print Name
______________________________
Date
Name of Insurer: ____________________
Policy Number: _____________________
DRAFTING NOTE: An insurer may choose not to use the acknowledgment section for workers' compensation.
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