|TO:||Licensees, Insurers and Interested Parties|
|FROM:||Linda Ruthardt, Commissioner of Insurance|
|DATE:||November 30, 2001|
|RE:||Minimum Requirements for Terrorism Exclusions to be Applied to Regulated Property/Casualty Insurance Policies|
As part of its efforts to maintain viable insurance markets in Massachusetts following the September 11, 2001 terrorist attack in the U.S., the Division of Insurance ("Division") has actively engaged in discussions with insurers and insurer organizations regarding coverage availability for the near term. The reinsurance market currently is reported to be such that endorsements that provide exclusions for terrorism may be appropriate and necessary for some insurers in order to protect their policyholders generally. In order to ensure that any such endorsements filed for subsequent approval by the Commissioner will be a reasonable response to the September 11, 2001 events, the Division has established minimum criteria for any such endorsements that require approval. This bulletin is designed to help insurers and insurance service organizations as they consider "terrorism exclusion" language and rates that need to be submitted. These minimum criteria are not meant to substitute for all applicable law. Insurers must comply with all applicable Massachusetts law.
N.B. Consistent with Massachusetts law insurers are responsible for notifying their insureds of all policy changes and endorsements.
Terrorism exclusions are not permitted for workers' compensation insurance under MA law.
Terrorism exclusions are not permitted for automobile insurance under MA law.
Insurers may file terrorism exclusion endorsements that have already been approved for insurers or rating organizations provided they comply with any licensing requirements. It is the Division's understanding that at least one rating organization with an approved terrorism exclusion endorsement will license insurers free of charge.