STATE OF CONNECTICUT

INSURANCE DEPARTMENT

											Bulletin PC-52
											December 6, 2002

TO:	ALL PROPERTY & CASUALTY INSURERS WRITING COMMERCIAL LINES INSURANCE PRODUCTS
ALL INSURERS ON THE NAIC QUARTERLY LISTING OF ALIEN INSURERS

RE:	VOLUNTARY EXPEDITED FILING PROCEDURES FOR COMPLIANCE WITH THE PROVISIONS OF THE TERRORISM RISK INSURANCE ACT OF 2002

Background

There has been much uncertainty in the markets for commercial lines property and casualty insurance coverage in light of the substantial losses experienced by the industry on September 11, 2001.  Soon after the tragic events, many reinsurers announced that they did not intend to provide coverage for acts of terrorism in future reinsurance contracts.  This led to a concerted effort on behalf of all interested parties to seek a temporary federal backstop to calm market fears over future terrorist attacks and the ability of the insurance industry to allocate capital to provide coverage for these unpredictable and potentially catastrophic events. Congress recently enacted and the President has signed into law, the Terrorism Risk Insurance Act of 2002 (The Act).  This federal law provides a federal backstop for defined acts of terrorism and imposes certain obligations on insurers.

The intent of this bulletin is to advise insurers of certain provisions of the Act that may require insurers to submit a filing in Connecticut and to inform insurers regarding a voluntary procedure for insurers to use to expedite the filing and timely review of policy language and the applicable rates that are discussed in the Act.

Definition of "insurer"

Section 102(6) of the Act defines “insurer” for purposes of the Act. “Insurer” means any entity, including any affiliate thereof--(A) that is--(i) licensed or admitted to engage in the business of providing primary or excess insurance in any State; (ii) an eligible surplus line carrier listed on the Quarterly Listing of Alien Insurers of the NAIC, or any successor thereto; (iii) approved for the purpose of offering property and casualty insurance by a Federal agency in connection with maritime, energy, or aviation activity; (iv) a State residual market insurance entity or State workers' compensation fund; (B) that receives direct earned premium for any type of commercial property and casualty insurance coverage.  The Secretary of Treasury may extend the Act to other classes or types of captive insurers and other self-insured arrangements by municipalities and other entities.

Definition of "property and casualty insurance"

Section 102(12) of the Act states the term “property and casualty insurance” (A) means commercial lines of property and casualty insurance, including excess insurance, workers' compensation insurance, and surety insurance, and (B) does not include crop or livestock insurance, private mortgage or title insurance, financial guaranty insurance issued by monoline financial guaranty insurance corporations, medical malpractice, health or life insurance, including group life, flood insurance provided under the National Flood Insurance Act of 1968, and reinsurance or retrocessional reinsurance.

Mandatory Insurer Participation and Coverage Availability

All insurers, as defined in the Act, are required by the Act to participate in the Terrorism Insurance Program (the Program) and make available coverage for an "insured loss" as defined in Section 102(5) of the Act (and discussed below) in all of their covered commercial lines policies.  The Act also advises that insured loss excludes amounts awarded in a civil action that are attributable to punitive damages.  The Act further requires insurers to make available property and casualty insurance coverage for insured losses that does not differ materially from the terms, amounts, and other coverage limitations applicable to losses arising from events other than acts of terrorism.

Rates, Policy Forms and Disclosure Forms

The Act voids any terrorism exclusions in a contract for property and casualty insurance that is in force on the date of enactment of this Act to the extent that it excludes losses that would otherwise be insured losses.  The Act also voids any state approval of any terrorism exclusion from a contract for property or casualty insurance that is in force on the date of enactment of this Act to the extent that it excludes losses that would otherwise be insured losses. The Act allows insurers to “reinstate a preexisting provision in a contract for commercial property  and casualty insurance that is in force on the date of enactment of this Act and that excludes coverage for acts of terrorism only” if one of two conditions are met.  The insurer must have received a written statement from the insured that affirmatively authorizes such reinstatement, or if the insured fails to pay any increased premium charged by the insurer for providing such terrorism coverage and the insurer has provided notice to the insured, at least 30 days before any such reinstatement. 

Definition of Insured Loss

Section 102(5) of the Act provides a definition of insured loss.  It states, “The term 'insured loss' means any loss resulting from an act of terrorism (including an act of war, in the case of workers’ compensation) that is covered by primary or excess property and casualty insurance issued by an insurer if such loss—(A) occurs within the United States; or (B) occurs to an air carrier (as defined in section 40102 of title 49, United States Code), to a United States flag vessel (or a vessel based principally in the United States, on which United States income tax is paid and whose insurance coverage is subject to regulation in the United States), regardless of where the loss occurs, or at the premises of any United States mission.”

As a result of the definition contained in the Act, there are essentially two distinct types of losses that a business might face that result from terrorism.  One type of loss is the insured loss that is defined within and covered by the provisions of the Act.  For convenience, we will adopt the term “certified loss” to refer to losses resulting from certified acts of terrorism.  The second type of loss that a business might face is one that does not fit within the definition of insured loss as described in the Act.  For convenience, we will adopt the term “non-certified loss” to refer to losses resulting from terrorism that is not certified.  One significant difference between these losses is that the certified losses will always involve a foreign person or foreign interest, while the non-certified losses may not.

Please note that the preemption of this state’s filing law, Section 38a-676(c) of the Connecticut General Statutes, applies only to contract language that is applicable to certified losses.  If an insurer intends to reinstate an exclusion on in-force policies as allowed under the Act, it may only reinstate an exclusion that previously existed on the policy. 

This state has allowed, and will continue to allow, some significant limitations that provide coverage for acts of terrorism under certain circumstances.  For policies providing property insurance coverage the following limitations apply to non-certified losses:

•	Exclusion for acts of terrorism only apply if the acts of terrorism result in industry-wide insured losses that exceed $25,000,000 for related incidents that occur within a 72 hour period;
•	Exclusions for acts of terrorism are not subject to limitations above if:
o	The act involves the use, release or escape of nuclear materials, or that directly or indirectly results in nuclear reaction or radiation or radioactive contamination;
o	The act is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or
o	Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials.

For policies providing liability insurance coverage the following limitations apply to non-certified losses:

•	Exclusion for acts of terrorism only apply if the acts of terrorism result in industry-wide insured losses that exceed $25,000,000 for related incidents that occur within a 72 hour period; or
•	Fifty or more persons sustain death or serious physical injury for related incidents that occur within a 72 hour period. For purposes of this provision serious physical injury means:
o	Physical injury that involves a substantial risk of death;
o	Protracted and obvious physical disfigurement; or 
o	Protracted loss of or impairment of the function of a bodily member or organ.
•	Exclusions for acts of terrorism are not subject to limitations above if;
o	The act involves the use, release or escape of nuclear materials, or that directly or indirectly results in nuclear reaction or radiation or radioactive contamination;
o	The act is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or
o	Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials.

Definition of Act of Terrorism

Section 102(1) defines an act of terrorism for purposes of the Act. Section 102(1)(A) states, “The term 'act of terrorism' means any act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State, and the Attorney General of the United States—(i) to be an act of terrorism; (ii) to be a violent act or an act that is dangerous to—(I) human life; (II) property; or (III) infrastructure; (iii) to have resulted in damage within the United States, or outside the United States in the case of—(I) an air carrier or vessel described in paragraph (5)(B); or (II) the premises of a United States mission; and (iv) to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.”  Section 102(1)(B) states, “No act shall be certified by the Secretary as an act of terrorism if—(i) the act is committed as part of the course of a war declared by the Congress, except that this clause shall not apply with respect to any coverage for workers’ compensation; or (ii) property and casualty insurance losses resulting from the act, in the aggregate, do not exceed $5,000,000.”  Section 102(1)(C) and (D) specify that the determinations are final and not subject to judicial review and that the Secretary of the Treasury cannot delegate the determination to anyone. 

This state will not allow exclusions of coverage for acts of terrorism that fail to be certified losses solely because they fall below the $5,000,000 threshold in Section 102(1)(B) on any policy that provides coverage for certified losses. Insurers required to file policy forms may submit language containing coverage limitations for certified losses that exceed $100 billion.

The Act includes a definition of acts of terrorism that is used within this bulletin to mean certified losses.  Policies subject to policy form filing requirements should also define what constitutes an act of terrorism for non-certified losses.  For non-certified losses, Connecticut would accept the following definition, or one that is more liberal to policyholders:

The phrase “non-certified act of terrorism” means a violent act or an act that is dangerous to human life, property, or infrastructure that is committed by an individual or individuals and that appears to be part of an effort to coerce a civilian population or to influence the policy or affect the conduct of any government by coercion, and the act is not certified as a terrorist act pursuant to the Federal Terrorism Risk Insurance Act of 2002.

Submission of Rates, Policy Form Language and Disclosure Notices

Insurers are required to comply with the Act and with state law.  Section 106(a)(2)(B) of the Act states that “during the period beginning on the date of enactment of this Act and ending on December 31, 2003, rates and forms for terrorism risk insurance coverage covered by this title and filed with any State shall not be subject to prior approval or a waiting period under any law of a State that would otherwise be applicable…”  Rates remain subject to subsequent regulatory review based on whether a rate is “excessive, inadequate, or unfairly discriminatory” and other applicable state law.  Similarly, policy forms are subject to subsequent review based on all applicable laws and regulations.  Insurers can immediately implement, upon filing with the Insurance Department, prospective rate changes for coverage of insured losses related to acts of terrorism as defined in the Act.

If an insurer relies on an advisory organization to file loss costs and related rating systems on its behalf, no rate filing for coverage for certified losses is required unless an insurer plans to use a different loss cost multiplier than is currently on file.  The rate filing should provide sufficient information for the Insurance Department to determine what price would be charged to a business seeking to cover certified losses.  Connecticut  will accept filings that contain a specified percentage of premium to provide for coverage for certified losses. Insurers may also choose to use rating plans that take into account other factors such as geography, building profile, proximity to target risks and other reasonable rating factors.  The insurer should state in the filing the basis that it has for selection of the rates and rating systems that it chooses to apply.  The supporting documentation should be sufficient for the Insurance Department  to determine if the rates are excessive, inadequate or unfairly discriminatory.

Insurers subject to policy form regulation must submit the policy language that they intend to use in Connecticut on or before the first date of use.  The policy should define acts of terrorism and both certified and non-certified losses in ways that are consistent with the Act, state law and the guidance provided in this bulletin.  The definitions, terms and conditions should be complete and accurately describe the coverage that will be provided in the policy.

The Insurance Commissioner requests that the disclosure notices required by the Act be filed for informational purposes, along with the policy forms, rates and rating systems as they are an integral part of the process for notification of policyholders in Connecticut and should be clear and not misleading to business owners in Connecticut.  The disclosures should comply with the requirements of the Act and should be consistent with the policy language and rates filed by the insurer.  Attached to this bulletin are sample model disclosure forms developed by the National Association of Insurance Commissioners and designated as NAIC Model Disclosure Form No. 1 and NAIC Model Disclosure Form No. 2.  These model disclosure forms can also be accessed at the NAIC website http://www.naic.org.  Details about the applicable requirements are contained in the following two paragraphs.

In-force business receives special consideration under the Act. Section 105 (a) voids any terrorism exclusion on existing policies to the extent that it excludes losses that would otherwise be insured losses as defined in the Act.  It details a process for insurers and policyholders to reinstate the voided exclusions. Under that process, an insurer may reinstate a preexisting provision in a contract that is in force on the date of enactment of this Act and that excludes coverage for an act of terrorism only if the insurer has received a written statement from the insured that affirmatively authorizes such reinstatement, or if the insured fails to pay any increased premium charged by the insurer for providing such coverage and the insurer provided notice, at least 30 days before any such reinstatement as provided in Section 105 of the Act. 

There are also disclosures required for new business and renewal business.  Although voidance of contract language is not an issue, insurers must make certain disclosures to policyholders to remain in compliance with the Act. Section 103(b)(2) requires insurers to provide a clear and conspicuous disclosure to the policyholder of the premium charged for covered insured losses and advise that a federal program exists where the federal government will share significant portions of major insured losses with insurers.

Effect on Workers’ Compensation Insurance Coverage

Treatment of workers’ compensation is slightly different than for other property and casualty insurance coverages. First, Section 102(1)(B)(i) provides that the federal program will share the risk of loss for workers’ compensation for acts of war in addition to acts of terrorism. This treatment occurs because of the statutory nature of the workers’ compensation program, which does not provide an exclusion for losses resulting from an act of war. Under Connecticut law there is no exclusion for workers’ compensation losses resulting from an act of war.  There is no provision in the Act that would preempt the compulsory coverage aspects of workers’ compensation insurance policies. In other respects, however, workers’ compensation coverage is treated under the Act as any other covered line of insurance. Therefore, the notice requirements of Section 103(b)(2) and the mandatory “make available” requirements of Section 103(c) apply to workers’ compensation policies.  In this connection, workers’ compensation insurers are required to separately state the estimated portion or amount of the premium being charged a policyholder for acts of terrorism, as defined in the Act  As this state’s workers’ compensation law does not have any exclusions for terrorism or war, neither insurers nor policyholders may use the Act’s procedures to create such an exclusion.  With regard to the filing and approval of rates and forms, workers’ compensation insurers are also covered by the Act, specifically Section 106(a)(2)(B) that waives any state prior approval or time requirements for the first year of the Act. Such insurers shall therefore follow the alternative filing procedures established in this bulletin.

Provision for Standard Fire Policy

In this state, the requirements for property coverage, must meet or exceed the provisions of the Standard Fire Policy set forth in Section 38a-307 of the Connecticut General Statutes.  These legal requirements cannot be waived.  Thus, a business cannot voluntarily waive this statutorily mandated coverage. 

Information for SERFF Filers

For insurers that use the SERFF system, there will be an expedited filing form in that system for your use.

Explanation and Instructions for Terrorism Rate and Form Review

The Act preempts any state prior approval law pertaining to rates or forms—including any law that imposes waiting periods—prior to use of a rate or form for purposes of terrorism coverage, as defined by the Act.  This preemption remains in effect for the first year of the Act. Consistent with these requirements of the Act, this bulletin establishes a system for rates and forms, requiring insurers or advisory organizations to file their rates and forms on or before their first date of use.  The procedure for obtaining an expedited review of such rates and forms is set forth below.  However, nothing in this bulletin shall be construed as establishing a rate or form filing review or approval requirement where one does not otherwise exist under this state’s law. Policy language changes and related pricing for non-certified losses remain subject to current applicable state law and will be processed in an expedited manner. 

Forms with Instructions

Attached to this bulletin is a uniform filing transmittal form that has been agreed upon by this state and other states.  An insurer or advisory organization wishing to receive expedited treatment of its filing shall complete the EXPEDITED FILING TRANSMITTAL DOCUMENT—FOR TERRORISM RISK INSURANCE FORMS AND PRICING as directed. In addition, the insurer(s) or advisory organization submitting the filing must certify that the filing is consistent with this bulletin, state law and the provisions of the Act.  Certification is made by signing the appropriate blank on the transmittal form. Filings for policy language changes and related pricing for non-certified losses, which remain subject to current applicable state law, may be made using the attached filing transmittal form.  These filings will be processed in an expedited manner.  The attached expedited filing transmittal document replaces all otherwise applicable filing forms and filing transmittal forms for these filings. 

To be complete, an expedited filing must include the following:

1.	A completed, certified Expedited Filing Transmittal Document for each insurer or advisory organization.  If this filing is for multiple companies, please provide a copy of the transmittal document for each company and an extra copy for return to the company.  (i.e. 7 companies = 8 copies)
2.	One copy of each policy form or endorsement that the insurer intends to use, unless the insurer has given an advisory organization authorization to file them on its behalf. 
3.	A copy of the rates and rating systems along with the supporting documentation, if required.
4.	The appropriate filing fees.
5.	A postage-paid, self-addressed envelope large enough to accommodate the return.  Note that a comparable filing transmittal form is available in SERFF.

In addition, the Insurance Commissioner requests a copy of any disclosure notices that will be used to convey information to policyholders in this state (filed for informational purposes only).

Effective Date

This bulletin shall take immediate effect. The expedited filing process outlined herein shall expire on December 31, 2003. The remainder of the bulletin shall expire on December 31, 2005, unless Congress extends the duration of the Act.

This office intends to provide insurers with subsequent further guidance or information to the extent necessary.

If you have any questions concerning this bulletin, please contact the Insurance Department Property & Casualty Division at (860) 297-3867 or ctinsdept.propcasualty@po.state.ct.us.

						Susan F. Cogswell
						Insurance Commissioner

EXPEDITED FILING TRANSMITTAL DOCUMENT
FOR TERRORISM RISK INSURANCE FORMS AND PRICING

This page applies to the following state(s) ___________
Indicate Type of Filing		Department Use only	

ڤ Filing Related to Certified Losses

ڤ Filing Related to Non-Certified Losses

ڤ Filing Applicable to Both Certified and Non-Certified Losses		

	

Company Name(s)	Domicile	NAIC #	FEIN #	

Contact Info for Filer
Name and address of Filer(s)	Telephone #	FAX #	e-mail	

				
Filing information
Line of Insurance		
Company Program Title (Marketing title)  (if applicable)		
Filing Type 		
This filing is used with:		
Effective Date Requested		
Filing date		
Company Tracking Number		
Date filing approved in domiciliary state, if applicable		

	Component/Form Name /Description/Synopsis	Form # or Rate Page
Include edition date
	Replacement
Or withdrawn?
	If replacement, 
give form # or rate
page(s) it replaces	Previous State
Filing Number,
if required
by state	
01		 	[ ] Replacement
[ ] Withdrawn
[ ] Neither			
02
			[ ] Replacement
[ ] Withdrawn
[ ] Neither			

To be complete, a filing must include the following:
•	A completed Expedited Filing Transmittal Document for each insurer or advisory organization.
•	One copy of each endorsement, disclosure form or other policy language, unless the insurer has given an advisory organization authorization to file them on its behalf.
•	A copy of the rates, rating systems and supporting documentation.
•	The appropriate filing fees, if required
•	A postage-paid, self-addressed envelope large enough to accommodate the return.

The insurer(s) submitting this filing certifies that it:
Is in compliance with the terms of the Terrorism Risk Insurance Act of 2002 and the laws of this state, and is in compliance with the requirements of the bulletin containing the voluntary expedited filing procedures.

___________________________	___________________________	___________________________	
Signature	Print Name:	Title:	

COMPLETED SAMPLE FORM		
EXPEDITED FILING TRANSMITTAL DOCUMENT
FOR TERRORISM RISK INSURANCE FORMS AND PRICING

This page applies to the following state(s) ___________
Indicate Type of Filing		Department Use only	

ڤ Filing Related to Certified Losses

ڤ Filing Related to Non-Certified Losses

ڤ Filing Applicable to Both Certified and Non-Certified Losses		

	

Company Name(s)	Domicile	NAIC #	FEIN #	
ABC Insurance Company	NY	0000-99999	99-1234567	
				
Contact Info for Filer
Name and address of Filer(s)	Telephone #	FAX #	e-mail	
John Doe  (Form Filing)
Regulatory Compliance
ABC Insurance Co.
12345 Fifth Ave
New York, NY  10234  	501-555-5555	501-555-5551	John.doe@abcins.com	
Filing information
Line of Insurance	Commercial General Liability	
Company Program Title (Marketing title)  (if applicable)	General Liability Program	
Filing Type 	Form (Endorsement)	
This filing is used with:	(Insert policy form number to which the filing attaches)	
Effective Date Requested	01-01-02 (Enter your desired effective date)	
Filing date	(Date Company sends filing)	
Company Tracking Number	ABC-EP-2001-01  (Enter your filing tracking number, if applicable)	
Date filing approved in domiciliary state, if applicable	Not approved yet.  Filed on same date as this filing. 	

	Component/Form Name /Description/Synopsis	Form # or Rate Page
Include edition date
	Replacement
Or withdrawn?
	If replacement, 
give form # or rate
page(s) it replaces	Previous State
Filing Number,
if required
by state	
01	Certified Loss Exclusion	 CG XX XX 12 02	[X] Replacement
[ ] Withdrawn
[ ] Neither	List form number of previous terrorism exclusion		
02
			[ ] Replacement
[ ] Withdrawn
[ ] Neither			

To be complete, a filing must include the following:
•	A completed Expedited Filing Transmittal Document for each insurer or advisory organization.
•	One copy of each endorsement, disclosure form or other policy language, unless the insurer has given an advisory organization authorization to file them on its behalf.
•	A copy of the rates, rating systems and supporting documentation.
•	The appropriate filing fees, if required
•	A postage-paid, self-addressed envelope large enough to accommodate the return.

The insurer(s) submitting this filing certifies that it:
Is in compliance with the terms of the Terrorism Risk Insurance Act of 2002 and the laws of this state, and is in compliance with the requirements of the bulletin containing the voluntary expedited filing procedures.

___________________________	___________________________	___________________________	
Signature	Print Name:	Title:	

NAIC MODEL DISCLOSURE FORM NO.1
POLICYHOLDER DISCLOSURE
NOTICE OF TERRORISM
INSURANCE COVERAGE

You are hereby notified that under the Terrorism Risk Insurance Act of 2002, effective November 26, 2002, that you now have a right to purchase insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act: The term "act of terrorism" means any act that is certified by the Secretary of the Treasury, in concurrence with the Secretary of State, and the Attorney General of the United States-to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property; or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of an air carrier or vessel or the premises of a United States mission; and to have been committed by an individual or individuals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Coverage under your existing policy may be affected as follows:

ANY IN-FORCE TERRORISM EXCLUSIONS FOR ACTS OF TERRORISM, AS DEFINED IN THE ACT, ALREADY CONTAINED IN YOUR POLICY OR INCLUDED IN AN ENDORSEMENT ARE NULLIFIED AS OF NOVEMBER 26, 2002.

YOU SHOULD KNOW THAT COVERAGE PROVIDED BY THIS POLICY FOR LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM IS PARTIALLY REIMBURSED BY THE UNITED STATES UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. UNDER THIS FORMULA, THE UNITED STATES PAYS 90% OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAID BY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM CHARGED FOR THIS COVERAGE IS PROVIDED BELOW AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.

SELECTION OR REJECTION OF TERRORISM INSURANCE COVERAGE
UNDER FEDERAL LAW, YOU HAVE THIRTY (30) DAYS TO CONSIDER THIS OFFER OF COVERAGE FOR TERRORIST ACTS AND SUBMIT THE PREMIUM REQUIRED. IF WE DO NOT RECEIVE THE QUOTED PREMIUM BY__________, THE TERRORISM EXCLUSION NULLIFIED BY THE ACT WILL BE REINSTATED ON__________, AND YOU WILL NOT BE COVERED FOR LOSSES ARISING FROM TERRORIST ACTS THAT WERE PREVIOUSLY EXCLUDED.

	I hereby elect to purchase Terrorism coverage for a prospective premium of $_________________.	
	I hereby elect to have the exclusion for terrorism coverage reinstated. I understand that I will have no coverage for losses arising from acts of terrorism that were previously excluded.

__________________________________			__________________________
Policyholder/Applicant's Signature 				Insurance Company

_________________________				_______________________
	    Print Name 						 Policy Number

_________________________			
Date

NAIC MODEL DISCLOSURE FORM NO. 2
POLICYHOLDER DISCLOSURE
NOTICE OF TERRORISM
INSURANCE COVERAGE

Coverage for acts of terrorism is already included in your current policy. You should know that, effective November 26, 2002, under your existing coverage, any losses caused by certified acts of terrorism would be partially reimbursed by the United States under a formula established by federal law. Under this formula, the United States pays 90% of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage. The portion of your annual premium that is attributable to coverage for acts of terrorism is: $_____________.

I ACKNOWLEDGE THAT I HAVE BEEN NOTIFIED THAT UNDER THE TERRORISM RISK INSURANCE ACT OF 2002, ANY LOSSES CAUSED BY CERTIFIED ACTS OF TERRORISM UNDER MY POLICY COVERAGE WILL BE PARTIALLY REIMBURSED BY THE UNITED STATES AND I HAVE BEEN NOTIFIED OF THE AMOUNT OF MY PREMIUM ATTRIBUTABLE TO SUCH COVERAGE.

___________________________________
Policyholder/Applicant's Signature

__________________________________
	Print Name

__________________________________
		Date

Name of Insurer: ________________________
Policy Number: __________________________

DRAFTING NOTE: An insurer may choose not to use the acknowledgement section for workers'compensation.