February 22, 2006

JAMES LEE WITT TO ADDRESS 
AAIS ANNUAL CONFERENCE

James Lee Witt, former director of the Federal Emergency Management Agency (FEMA), will speak at the 2006 AAIS Annual Conference, April 9-11 at The Ritz-Carlton in Sarasota, Florida. To register,

Witt, a leading authority in public safety and emergency management, is now a co-chairman of "ProtectingAmerica.org," a nationwide coalition urging a comprehensive strategy to manage the effects of catastrophes. Disaster management has become a major national issue, with state insurance commissioners and the National Association of Insurance Commissioners making proposals for a national catastrophe program.

This conference program is designed to provide information and guidance to property/casualty executives faced with a growing number of critical decisions. Other presenters include :

• Professor J. Edward Russo of Cornell University, who will lead a half-day session on effective decision-making. Each registrant will receive a complimentary copy of his book Winning Decisions: Getting It Right The First Time.

• Ernst Csiszar, president of the Property Casualty Insurers Association of America.

• Matthew Josefowicz, manager of the global insurance group for the research and consulting firm Celent; and

• John Lucker, principal, and Jim Marino, director, Deloitte Consulting.

In addition, there will be a panel of company executives that includes:

• Greg Ostergren, chairman, president and CEO of American National Property and Casualty Company, Springfield, Mo.;

• Kenneth Stover, executive vice president, Western National Mutual Ins. Co., Minneapolis, Minn.; and

• James Sullivan, president and CEO of Co-Operative Insurance Companies, Middlebury, Vt., who will moderate the panel.

For more information, contact Joe Harrington, director of corporate communications, at joeh@AAISonline.com or by calling 800-564-AAIS.

CALIFORNIA APPROVES AgOP
RESIDENTIAL EARTHQUAKE COVERAGE

The California Department of Insurance has approved endorsements and manual rules for providing earthquake coverage on dwellings insured under the AAIS Agricultural Output Program (AgOP). The materials were approved with an effective date of April 1, 2006, but companies are required to establish their own effective dates.

The AgOP is a property program that combines commercial property and inland marine coverages appropriate for agribusinesses into a few coverage parts. As an agricultural insurance program, the AgOP also builds coverage for dwelling property into its base form.

One of the new California endorsements will allow AgOP writers in the state to offer limited coverage for earthquake loss to scheduled dwellings and household personal property, as required under California state law. Another new endorsement provides supplemental coverage for reconstruction costs needed to comply with building codes following an earthquake loss.

TERRORISM ENDORSEMENT STILL APPLIES
FOR PERSONAL LINES RENTAL PROPERTIES

Companies that use the AAIS Dwelling Properties (DP) and Personal & Premises Liability (P&PL) programs were informed this month that the terrorism coverage endorsement introduced in 2003 for small rental properties can still be used under the latest modification of the federal terrorism reinsurance program.

The recent extension and modification of the Terrorism Risk Insurance Program (TRIP) does not affect coverage provided under TRIP for 1-4 family dwellings regularly rented or held for rental to others for residential purposes.

In 2003, AAIS developed an endorsement for providing TRIP coverage under its DP and P&PL programs for losses resulting from a "certified" act of terrorism. That endorsement can still be used for that purpose.

However, unlike commercial lines programs covered by TRIP, companies writing DP and P&PL policies need not extend a specific offer of the coverage. That's because regulators are unwilling to let carriers exclude terrorism losses under personal lines policies covering residential rental properties. The effect of the AAIS endorsement in such cases is to satisfy disclosure requirements and allow the coverage to qualify for federal reinsurance.

AAIS PROGRAMS TO BE ADDRESSED
AT PAMIC CLAIMS SUMMIT

The AAIS Homeowners and Commercial Liability programs will be addressed at a Claims Summit sponsored by the Pennsylvania Association of Mutual Insurance Companies (PAMIC), April 4-5 in Harrisburg, Pa.

Information on the AAIS programs will be provided by Fred Macy, an independent trainer and the founder of Gray Wolf Insurance Seminars, LaVale, Md., which conducts training on AAIS and other programs.