AAIS Product Advisory - May 2, 2003

Different Editions of Terrorism Exclusion Endorsements Filed In Minnesota As A Result Of Recent Legislative Activity

In response to the enactment of House File 267, AAIS has submitted, as replacements for our current MN terrorism exclusion endorsements, terrorism exclusion endorsements that do not provide coverage for ensuing fire loss. Updates have also been made to several rule and rating information supplement pages as a result of the change in endorsement editions.

The endorsement editions filed for each program are identified in Bulletin 03-0162, and are available as attachments to multistate terrorism Bulletin 02-0550, which is posted to our open web site at http://www.aaisonline.com/terror/Bulletin/02-0550.htm. The revised manual supplement pages are available electronically as attachments to Bulletin 03-0162, which is not being distributed in paper format, but is also posted to our open web site at http://www.aaisonline.com/terror/Bulletin/03_0162.htm.

Prior to the passage of House File 267, no provisions existed whereby coverage for terrorism loss could be exempted from standard fire policy requirements. This meant that even if an insured rejected coverage for terrorism losses, coverage for ensuing fire loss still had to be provided. The new legislation, signed into law on April 9, 2003, exempts commercial policies from providing fire-following coverage for terrorism losses unless they have been specifically endorsed to do so.

All of the AAIS endorsement and manual supplement changes have been submitted with a proposed effective date of July 1, 2003. The endorsements and manual pages applicable to certified terrorism losses have been submitted on a file-and-use basis. Companies may begin using the AAIS certified materials effective on July 1, 2003. The endorsements and manual pages applicable to non-certified terrorism losses have been submitted on a prior approval basis, and as a result, may not be used by companies until we notify you (via Product Advisory) that Insurance Department approval has been received.

The updated endorsement editions have been released to CCH Information Services, the print vendor of AAIS forms and endorsements. Call CCH at 800/382-2424 to order the notices in paper printed format. Call CCH at 800/782-9481 to order the text of the notices in a variety of electronic formats.
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Companies that do not currently use an AAIS program referenced here can request additional information from Rick Anderer at Richarda@aaisonline.com or 800/564-AAIS x222.

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