Jan. 12 UPDATE: President Barack Obama has signed the bill re-authorizing the federal Terrorism Risk Insurance Program for six years.
AAIS government affairs, product development, and actuarial staff specialists are preparing filings to address the pending renewal of the federal Terrorism Risk Insurance Program (TRIP).
The program, enacted in 2002 in the wake of the Sept. 11th attacks and renewed in 2005 and 2007, was allowed to expire by the outgoing 113th Congress. This week, both houses of the new 114th Congress voted overwhelmingly to renew the program. The legislation was sent on to President Obama, who is expected to sign it.
Immediately following this week's action in the U.S. Senate, AAIS participated in a conference call of the Terrorism Insurance Implementation (C) Working Group of the National Association of Insurance Commissioners (NAIC).
The working group is drafting a model bulletin for state insurance departments to draw upon when determining policy toward terrorism insurance. Among other things, the model bulletin provides for expedited review of rates, policy forms, and disclosure notices for complying with the conditions of the federal program. AAIS will continue to monitor the working group's deliberations and output.
As that proceeds, AAIS legal and product development staff are revising language for existing terrorism endorsements to reflect changes in the program enacted by Congress.
Among other things, the level of "co-payments" by private insurers will begin to increase on Jan. 1, 2016, and increase incrementally each year thereafter through 2020. Terrorism endorsements that take effect in 2015 and extend into succeeding years will have to reflect the changing level of co-payments.
In conjunction with that, AAIS actuaries are reviewing terrorism loss costs filed under affected programs and projecting how changes to the program's payouts will impact the exposure of AAIS member companies in affected lines.
AAIS affiliates in affected lines should watch for bulletins being drafted with information on pending AAIS filings and any company action required under them.
AAIS Advisory notices are posted periodically to announce AAIS product developments, and to provide news items that are relevant to our program users. Advisory notices are news summaries that paraphrase documents which should be consulted directly for complete, authoritative information.