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Filing information on AAISonline.com
States are deciding on their own whether to
institute expedited filing procedures for revised terrorism materials.
(Unlike the previous extension, the latest extension has no provision
for pre-empting state filing laws.) As state positions on expedited
procedures become known, AAIS will post summarized filing information in
a table available by clicking here.
Jan. 14 web seminar filled; still openings for
Jan. 18
Registration is now closed for the terrorism web
seminar scheduled for Jan. 14, but AAIS affiliates can still sign
up for the repeat of the seminar on Friday, Jan. 18 at 10 a.m.
CST. To register
The web seminar is free to all AAIS affiliated
companies.
Background
On Dec. 26, President George W. Bush 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.
AAIS staff members participated in a conference call on Dec. 19 with
representatives of the NAIC and other interested parties,
and it was also
determined that there are key questions not explicitly addressed by the
federal legislation:
·
The
federal law makes no provision for changes that must be made to policies
issued before revised terrorism materials are approved for use. AAIS and
others have asked the U.S. Treasury Dept., which administers the federal
program, to provide guidance on this.
·
While the
NAIC model bulletin calls for expedited filing processes, the latest
congressional bill, unlike previous terrorism legislation, does not
pre-empt state filing laws. Individual states, especially prior-approval
states, will have to determine what emergency measures are needed to
implement expedited filing, and whether to take those measures.
AAIS and company action
Insurers for affected commercial lines still have an obligation to make
coverage available for "certified" acts of terrorism (which will now
include domestic terrorism) and to disclose the premium for such
coverage.
Until further notice by bulletin, AAIS recommends that companies do the
following:
·
Continue
to use terrorism disclosure notices and coverage or exclusion
endorsements that are currently on file until revised materials are made
available. Policies that become effective as of the new law's enactment
date or later will require amendment after policy issue.
·
Discontinue
using any terrorism exclusions with the word "conditional" in the title,
since the conditions that would trigger such exclusions are no longer
imminent.
AAIS sample notice CL 1045 06 06, Policy Holder Disclosure --
Notice of Terrorism Insurance Coverage, is currently on file to provide
the required disclosure. AAIS will be revising that notice with respect
to the definition of certified act of terrorism. (That definition will
also be revised in a number of endorsements.) AAIS will make another
change to the disclosure notice to meet a provision in the new law
regarding clear and conspicuous notice of the $100 billion cap on
aggregate losses under the program.
AAIS filings are made using "SERFF," the NAIC's System for Electronic
Rate and Form Filing, wherever permitted; filings will be submitted
according to the most expeditious method permitted by each state.
Specific AAIS filing action will be announced by bulletin to affected
affiliates, and web seminars explaining the changes will be scheduled
for January 2008.
Learn these acronyms
AAIS and other organizations, including state
regulators, will probably use some terrorism program acronyms as
"shorthand" in upcoming communications. Insurers may find it helpful to
keep this list at hand:
"TRIA" stands for
the Terrorism Risk Insurance Act of 2002, which first created the
federal terrorism reinsurance backstop.
"TRIP" stands for
the Terrorism Risk Insurance Program, the formal name of the program
created by TRIA and administered by the U.S. Treasury Dept.
"TRIEA" stands for
the Terrorism Risk Insurance Extension Act of 2005, which modified the
program and extended it through last year.
"TRIPRA" stands for
the recently enacted Terrorism Risk Insurance Program Reauthorization
Act of 2007, the latest extension of the program and the subject of
upcoming AAIS bulletins and web seminars.
Watch the AAIS Advisory e-mail and www.AAISonline.com for
details and registration information.
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