Reference Bulletin: 02-0017

The AAIS War and Terrorism Exclusions endorsements described in the Reference Bulletin have been further revised. The latest revisions have been approved for use in Virginia, effective January 1, 2002, and are now being filed to replace the previously submitted endorsements in all states that are accepting terrorism exclusions. Prompt approval of the latest endorsements is expected in all such states.

This Bulletin and the attached endorsements have been posted to the AAIS open web site at www.AAISonline.com. Earlier Bulletins pertaining to the war and terrorism exclusions and the status reports providing information regarding the corresponding filings are no longer available at www.AAISonline.com. The status reports will be reinstated in the near future to reflect the approval of the latest revisions.

BACKGROUND -- PREVIOUS AAIS FILING ACTION
During the first weeks of 2002, AAIS filed revised war and terrorism exclusions endorsements that were intended to comply with the exclusionary language and thresholds recommended by the NAIC. Although many states approved those filings, some states interpreted the AAIS exclusionary language to be more restrictive than the language sanctioned by the NAIC.

The AAIS war and terrorism exclusions were further revised in order to address such concerns and to ensure that the AAIS endorsements will be acceptable in all states that have agreed to accept the NAIC-sanctioned language. The latest endorsements eliminate any question as to whether coverage provided under the AAIS war and terrorism terms is equivalent to that provided under the NAIC-sanctioned language.

ENDORSEMENTS -- WAR, MILITARY ACTION, AND TERRORISM EXCLUSIONS
Each endorsement that now revises or introduces the war exclusion and introduces the terrorism exclusion bears the title: War, Military Action, and Terrorism Exclusions. The last four characters of each endorsement number have been changed from 12 01 to 01 02; the first six characters of each endorsement number remain unchanged. A table that identifies the latest endorsement being filed for each line of insurance appears below:

AAIS FILING ACTION

The endorsements attached to this Bulletin replace the endorsements listed in the Reference Bulletin. The proposed effective date remains January 1, 2002, wherever permitted. In most states, endorsement UM 0311 01 02 is filed on an advisory basis for use under the Commercial Umbrella Program and the remaining endorsements are filed on behalf of companies that have given AAIS filing authority for the respective lines of insurance.

We are not pursuing the approval of terrorism exclusions in the states of California, Florida, or New York at this time, based on the positions currently established by the insurance departments in those states.

The endorsements identified in the "No Fire Exception" column in the table above are filed only in the jurisdictions listed below. The endorsements identified in the "Fire Exception" column in the table above are filed in all other jurisdictions, except California, Florida, and New York.

* Special editions required in this state

COMPANY ACTION
Companies that have issued or renewed policies that include the 12 01 editions of the endorsements listed above will need to replace those endorsements with the 01 02 editions, once approval of the latest endorsements is announced.

In the event of loss caused by terrorism, coverage under any policy to which a 12 01 edition War and Terrorism Exclusions endorsement had been attached should be interpreted according to the terms of corresponding 01 02 edition of the same endorsement.

More information regarding state approvals of the endorsements described in this Bulletin will be posted on the AAIS open web site at www.AAISonline.com. Status reports will summarize any company action required to adopt the AAIS filing and provide information regarding effective dates, filing numbers, and special state requirements. State-specific Bulletins will be issued to announce approval of the War, Military Action, and Terrorism Exclusions endorsements only when it is necessary to convey more information than can be included in the web site status reports.

ATTACHMENTS

AP 0686    01 02,  War, Military Action, and Terrorism Exclusions
AP 0687    01 02,  War, Military Action, and Terrorism Exclusions
BP 0674    01 02,  War, Military Action, and Terrorism Exclusions
BP 0675    01 02,  War, Military Action, and Terrorism Exclusions
CL 0468    01 02,  War, Military Action, and Terrorism Exclusions
CL 0469    01 02,  War, Military Action, and Terrorism Exclusions
GL 0985    01 02,  War, Military Action, and Terrorism Exclusions
GS 0194    01 02,  War, Military Action, and Terrorism Exclusions
UM 0311   01 02,  War, Military Action, and Terrorism Exclusions

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