PRESIDENT BUSH SIGNS BILL
EXTENDING TERRORISM PROGRAM

NOTE: This Advisory was modified after being transmitted by e-mail.

President George W. Bush today signed the bill extending the federal terrorism reinsurance program through 2014. AAIS staff has been drafting revised terrorism endorsements and notices, and will begin filings soon.

Until further instructions are provided by bulletin and other means, AAIS is recommending that its affected affiliates continue to use terrorism disclosure notices and coverage or exclusion endorsements that are currently on file until revised materials are made available.

Also, AAIS advises its affiliates to discontinue using terrorism exclusions with the word "conditional" in the title, as the conditions that would trigger such exclusions are no longer imminent.

RATING PROCEDURES REVISED
FOR BUILDERS' RISK, INSTALLATION FLOATER
CLASSES OF AAIS INLAND MARINE GUIDE

AAIS recently released revised rating procedures and rating worksheets for the Builders' Risk and Installation Floater sections of the Inland Marine Guide.

Among other things, new information has been added for determining the basic load, flood load, and earthquake load for each of these traditionally nonfiled classes of inland marine insurance.

The bulletin announcing these changes included information on filing the procedures in states that do not exempt inland marine from filing requirements. A companion bulletin indicates that these updates have been filed and approved on an advisory basis in California.

For information on affiliating with AAIS for use of the Inland Marine Guide, contact Joseph Harrington, director of corporate communications, at joeh@AAISonline.com, or by calling 800-564-AAIS.

NEW ENDORSEMENTS AND SCHEDULES
FILED UNDER COMMERCIAL OUTPUT PROGRAM

Several new or revised endorsements and schedules are being filed under the AAIS Commercial Output Program (COP) with a proposed effective date of May 1, 2008.

Three of the endorsements and accompanying schedules would allow COP users to implement the following:

• Separate deductibles for loss caused by windstorm or hail (flat deductible or percentage deductible options are available);

• Deductibles that vary by peril and scheduled location; and

• Separate income coverage limits for domestic and foreign dependent locations (locations operated by others that the insured's business depends upon.)

Another endorsement would allow carriers to exclude losses at selected locations caused by named hurricanes or tropical windstorms, and another schedule is filed that would allow coverage under a blanket policy to be excluded for specified locations.

A fifth schedule is revised to include a new provision addressing a premium reporting requirement under Statutory Accounting Principles.

For information on affiliating with AAIS for use of the Commercial Output Program, contact Joseph Harrington, director of corporate communications, at joeh@AAISonline.com, or by calling 800-564-AAIS.

OREGON ISSUES GUIDANCE
ON RATING DOMESTIC PARTNERSHIPS

A bulletin from the Oregon Department of Consumer and Business Services provides guidance on the application of Oregon's new law recognizing same-sex domestic partnerships. The law was discussed in a previous Advisory, and AAIS has received approval for new mandatory endorsements that take effect when the law becomes effective Jan. 1, 2008.

Among other things, the bulletin addresses several considerations in rating policies insuring members of a domestic partnership:

• Insurers must rate members of a domestic partnership according to the same standards used to rate husbands and wives. They cannot use "married" rates for the latter and "named insured" rates for the former; however

• The insurer may use "appropriate rating methods that reflect the composition of a domestic partnership," and underwriting rules and rates may reflect the differences in loss experience between male-male partnerships, female-female partnerships, and married couples.

For purposes of coverage, discounts, and other matters, insurers must require and apply the same level of proof for the existence of a domestic partnership that the insurer requires and applies for the existence of a marriage.

AAIS INVITES PARTICIPATION
IN PERSONAL INJURY STUDY

Insurers that write liability coverage are invited to participate in a special AAIS research study regarding the frequency and severity of claims for personal injury, such as libel, slander, and violation of privacy.

In particular, carriers are asked to respond to a voluntary call for personal injury claims data from 2002 through 2006. Information and instructions are available in a Microsoft Word document, and a Microsoft Excel spreadsheet is provided for responding to the data call.

The study seeks to determine how the frequency and severity of personal injury claims have been affected by:

• The growing use of e-mail, blogs, "gripe sites," networking sites, picture/video phones, and other forms of electronic communication; and

• The growing incidence of "cyberbullying" and other offensive behaviors associated with these communications.

All carriers that write personal injury coverage can participate, whether they are AAIS members or not. Companies that provide data will receive a report with the aggregate results, plus analysis.

If you have questions about the study, contact Greg Jaynes, director of actuarial services, at gregj@AAISonline.com, or Larry Thill, manager of data management, at larryt@AAISonline.com.