Underwriting Bulletin

Transcription

1 Underwriting Bulletin To: All Colony Contract Producers Date: January 23, 2008 Re: Revised Policyholder Notices and Endorsements Associated With the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIA) Effective Date: Immediately, mandatory on all policies effective 1/1/2008 and after Background On December 26, 2007, President Bush signed into law the Terrorism Risk Insurance Program Reauthorization Act of The Reauthorization Act extends the federal backstop program through December 31, 2014, and also makes the following additional changes: - Revises the definition of an Act of Terrorism to eliminate the distinction between domestic and foreign terrorism, allowing either foreign or domestic terrorism events to be considered a certified act; - Changes the Insurer Deductible to be 20% of the insurer s direct earned premium for the preceding calendar year; - Establishes the federal share of losses to be 85% of the amount of losses in excess of the insurer deductible; - Establishes the program trigger at $100M for each program year; - Requires conspicuous notice to policyholders of the existence of the $100B cap on losses under the Act, after which level losses will be shared in a fashion to be determined by the Department of Treasury. How This Affects Our Business Because of the reauthorization, we are amending our Policyholder Disclosure Notice as well as a number of coverage forms in compliance with provisions of the Act. Please refer to the listing below for details. These forms can be found in the Colony Contract Manual, and should be used on policies beginning immediately. For outstanding Colony quotes with a 1/1/2008 effective date or later, that have not yet been bound, please use the new TRIA offer/disclosure notice and forms outlined below. Please be aware that you should continue to observe all current procedures relative to offering terrorism coverage on Colony policies. The offer form should continue to be presented to insureds with all quotes, and signed forms should be sent to us with all bound business. 1

2 Underwriting Bulletin Policyholder Disclosure Notice TRIA2002Notice-0108 (Replaces 0707 Edition) for use with all lines of business Forms/Endorsements UCG (Replaces 0904 Edition) - for CGL, Liquor Liability, Owners and Contractors, Products/Completed Ops, and Railroad Protective; provides coverage for Certified Acts only UCG2171A-0108 (Replaces 0904 Edition) - for Farm Liability; provides coverage for Certified Acts only UCG (Replaces 0904 Edition) - for CGL, Liquor Liability, Owners and Contractors, Products/Completed Ops, and Railroad Protective; total exclusion for all terrorism acts UCG2175A-0108 (Replaces 0904 Edition) - for Farm Liability; total exclusion for all terrorism acts UIL (Replaces 0904 Edition) - for all property lines; provides coverage for Certified Acts only UIL (Replaces 0904 Edition) - for all property lines; total exclusion for all terrorism acts Special Note - Compliance with the Act As stated above, the new TRIA Notice, along with new coverage forms should be used on policies beginning immediately. For agents who use DocuCorp for their policy production, we will be distributing a new forms library in the near future containing the revised TRIA Disclosure Notice and revised coverage forms. Until then, it will be necessary for you to secure the updated forms from our Colony Contract Manual for compliance with this Act. You will be receiving instructions from us in the near future regarding how Colony policies that have a January 1, 2008 effective date, and were quoted after December 26, 2007 but were not offered the new/revised terrorism coverage, are to be brought into compliance with the Act. January 23 rd,

3 Underwriting Bulletin Date: October 18, 2004 To: All Colony Contract Agents From: Contract Division East Contract Division - West Phone: Updates to Terrorist Risk Insurance Act (TRIA) Endorsements We have updated the TRIA endorsements to implement two changes: (1) The War exclusion has been removed from the TRIA wording and will now be on a separate endorsement. (2) The TRIA coverage, if purchased, will end if the federal backstop ends. (As of today, TRIA is scheduled to expire on 12/31/05.) The new endorsements can be used whether or not Congress extends TRIA. DocuCorp users will receive a new library (which will include these new endorsements) in mid-november. A CD with the new endorsements in Word format will be mailed to those not using DocuCorp for policy issuance in early November. Please note that all policies issued with effective dates of January 1, 2005 or later must have these new endorsements attached. Accordingly, all new business quotes issued on or after November 30 should reflect these endorsements. A table demonstrating the endorsement changes follows. If you have any questions regarding the changes and/or the implementation of the new forms, please contact your Colony underwriter. Thank you for your assistance! 9201 Forest Hill Avenue, Suite 200 Richmond, VA (800) E. Indian School Rd., Suite 500 Scottsdale, AZ (877)

4 Underwriting Bulletin Updates to Terrorist Risk Insurance Act (TRIA) Endorsements - Continued (1) New Mandatory Endorsement War Exclusion Coverage Form Attach 2001 CGL CG OCP. CG Farm Liability.....UCG 00 62a 0904 Garage..CA Contract Auto Physical Damage..CA Storage Tank Pollution.E (2) New TRIA Endorsements Current Endorsements New Endorsements Coverage Form Accepts Rejects Accepts Rejects 2001 CGL UCG UCG UCG UCG Farm Liability UCG 2171a 1102 UCG 2175a 1102 UCG 2171a 0904 UCG 2175a 0904 Inland Marine, Commercial Property and Crime coverage parts UIL: 0954, 0964, 0974, 0969, 0959 (11/02 eds) UIL: 0956, 0966, 0976, 0961, 0971 (11/02 eds) UIL UIL Garage Contract Auto Physical Damage UCA UCA UCA UCA Storage Tank Pollution EU 163a 1102 EU 163b 1102 EU 163a 0904 EU 163b Forest Hill Avenue, Suite 200 Richmond, VA (800) E. Indian School Rd., Suite 500 Scottsdale, AZ (877)

5 Colony Insurance Company Preferred Colony National Insurance Company Colony Front Specialty Royal Insurance Company December 26, 2002 To: All Colony Agents From: Doug Grant, Vice President Re: Terrorism Risk Insurance Act of 2002 As you are aware, President Bush recently signed into law the Terrorism Risk Insurance Act. This Act provides for federal reinsurance of certified terrorist acts and mandates that all commercial insurers provide coverage for certified acts and notify existing and potential insureds of the cost of providing this coverage. We have been working diligently since 11/26/02 to implement this Act, and we feel that we have made every effort to keep this process as simple as possible for everyone. We have not had a change in wording or procedures from NAIC or ISO since yesterday; however, considering the rapidly changing situation there may be further changes in the future. Our intention is to fully comply with the act by implementing procedures in stages. Stage I -- New and Renewal Non-Admitted Business Effective January 2, 2003 all Colony quotes will include a separate charge for certified terrorism coverage, which the insured may elect or decline to purchase. A form has been developed for this purpose TRIA2002 Notice-1202 which we refer to as the Acceptance/Rejection form. This form will show the premium charge for certified terrorism coverage and include check boxes that Insureds will use to indicate whether coverage is elected or rejected. Company-issued quotes (Brokerage business) will include the Certified Terrorism Acceptance/ Rejection form. To bind coverage, you will need to return a copy of the quote, indicate whether certified terrorism coverage is desired, and provide the signed Acceptance/Rejection form. No coverage will be bound if the Company does not receive a signed Acceptance/Rejection form at the same time as the request to bind. All binders issued by the Company will include an Acceptance/Rejection form. This form will show the premium quoted; check whether certified terrorism coverage was accepted or rejected; and show Signature on File. This form also will be attached to all policies we issue. In the overall process, insureds will be provided with the Acceptance/Rejection form three times: once when quoted; again when coverage is bound; and finally when the policies are issued. Agency-issued quotes (Contract Binding business) also will need to include the Acceptance/Rejection form and follow the same procedures. The Acceptance/Rejection form must be signed by the insured prior to binding and a copy attached to the company copy of the policy. No coverage may be bound if you do not receive a signed Acceptance/Rejection form at the same time as the request to bind. Richmond, Virginia and Scottsdale, Arizona Members of

6 Colony Insurance Company Preferred Colony National Insurance Company Colony Front Specialty Royal Insurance Company All binders issued by you for Colony policies also must include a copy of the Acceptance/Rejection form signed by the Insured, or a completed Acceptance/Rejection form showing Signature on File. The form must show an X in the appropriate box and include the premium quoted for the coverage. The Signature on File approach allows for automation of policy issuance, however, a copy of the completed Acceptance/Rejection form signed by the insured must be attached to the Company copy of the policy. Outstanding quotes issued prior to 1/2/03 will be treated as in-force business. An Acceptance/ Rejection form is not required. Pricing Certified Terrorism Coverage The premium charge for Company-Issued quotes will be calculated as a percentage of the total premium, subject to a $100 minimum. For Agency-Issued quotes, a flat charge will apply. (The following are initial guidelines and are subject to change): Type of Business Company-Issued policies (Brokerage business): Agency-Issued policies (Contract Binding business): Minimum Charge 5% of the policy premium ($100 minimum) $100 per policy (flat charge) No Coverage is Provided for Non-Certified Terrorism Coverage is not available for Non-Certified Terrorism losses. This includes, in part, non-foreign terrorism, terrorism losses below certain thresholds and nuclear, chemical or biological attacks. According to the Act, the Secretary of the Treasury certifies losses. If an insured opts to purchase coverage for certified terrorism losses, an exclusion for non-certified losses will be attached to their policy. If an insured opts not to purchase certified terrorism loss coverage, an exclusion for certified and non-certified losses will be attached to their policy. Forms and Endorsements Forms and endorsements attached to this include: Acceptance/Rejection form Schedule of endorsements to be used, by state The endorsements will follow shortly in a subsequent . Please let us know if you have difficulties opening up or reading any of these documents. Terrorism Coverage and Policy Issuance Policies must clearly show whether certified terrorism coverage has been purchased or rejected. Company-Issued policies There will be a separate line item on all Common Policy dec pages showing Certified Terrorism Coverage. If coverage is accepted, the premium is shown here and totaled at the bottom of the page. If coverage is rejected, the premium line will show Not Taken. Richmond, Virginia and Scottsdale, Arizona Members of

7 Colony Insurance Company Preferred Colony National Insurance Company Colony Front Specialty Royal Insurance Company On the Schedule of Forms and Endorsements (U001), the Acceptance/Rejection form (TRIA2002 Notice-1201) will be listed, as will the applicable acceptance or rejection endorsement(s) for each coverage part. Agency-Issued policies As per Company-issued policies, the policy premium should be listed on the Common Policy dec page with the U001 form including the Accceptance/Rejection form and applicable endorsement(s). Until a new DocuCorp library is issued in the first quarter of 2003, the separate line item for the Certified Terrorism Coverage premium must be manually inserted on the Common Policy dec page. Stage II In-Force Non-Admitted Business In compliance with the Act, we will mail to all current policyholders a notification advising them of their rights under the Act. To make this effort as easy for you as possible, it is currently our intention to provide coverage for certified terrorism acts for all in-force policies and to waive the pro-rated additional premium for the coverage. (Renewals will contemplate charges.) As such, Acceptance/Rejection forms and the collection, accounting for and distribution of additional premiums and surplus lines taxes will not be required. We will provide you with sample copies of the disclosure notice that we send directly to our insureds. Additional information about our procedures, forms and endorsements for in-force business will follow shortly. Stage III Admitted Business Additional information on the appropriate processes and procedures for admitted business will follow shortly in separate correspondence. Our goal in implementing the Terrorism Risk Insurance Act of 2002 is to fully comply with the Act while making the procedures as painless to you, our partners, as possible. These procedures and forms are subject to change as we receive updated information and guidelines from the U.S. Department of Treasury. We appreciate your patience and understanding. If you have any questions or comments, please send them to my address indicated below. Sincerely, Douglas M. Grant Vice President, Marketing dgrant@colonyins.com Richmond, Virginia and Scottsdale, Arizona Members of

8 POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM INSURANCE COVERAGE You are hereby notified that under the Terrorism Risk Insurance Act, as amended, that you have a right to purchase insurance coverage for losses resulting from 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 certain air carriers or vessels or the premises of a United States mission; and to have been committed by an individual or individuals 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. YOU SHOULD KNOW THAT WHERE COVERAGE IS PROVIDED BY THIS POLICY FOR LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM, SUCH LOSSES MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES GOVERNMENT UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. HOWEVER, YOUR POLICY MAY CONTAIN OTHER EXCLUSIONS WHICH MIGHT AFFECT YOUR COVERAGE, SUCH AS AN EXCLUSION FOR NUCLEAR EVENTS. UNDER THE FORMULA, THE UNITED STATES GOVERNMENT GENERALLY REIMBURSES 85% 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. YOU SHOULD ALSO KNOW THAT THE TERRORISM RISK INSURANCE ACT, AS AMENDED, CONTAINS A $100 BILLION CAP THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURER S LIABILITY FOR LOSSES RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH LOSSES IN ANY ONE CALENDAR YEAR EXCEEDS $100 BILLION. IF THE AGGREGATE INSURED LOSSES FOR ALL INSURERS EXCEED $100 BILLION, YOUR COVERAGE MAY BE REDUCED. PLEASE ALSO BE AWARE THAT YOUR POLICY DOES NOT PROVIDE COVERAGE FOR ACTS OF TERRORISM THAT ARE NOT CERTIFIED BY THE SECRETARY OF THE TREASURY. Acceptance or Rejection of Terrorism Insurance Coverage You must accept or reject this insurance coverage for losses arising out of acts of terrorism, as defined in Section 102(1) of the Act, before the effective date of this policy. Your coverage cannot be bound unless our representative has received this form signed by you on behalf of all insureds with all premiums due. Coverage acceptance: I hereby elect to purchase coverage for certified acts of terrorism, as defined in Section 102(1) of the Act for a prospective annual premium of $. I understand that I will not have coverage for losses resulting from any non-certified acts of terrorism. OR Coverage rejection: I hereby decline to purchase coverage for certified acts of terrorism, as defined in Section 102(1) of the Act. I understand that I will not have coverage for any losses arising from either certified or non-certified acts of terrorism. Policyholder/Applicant s Signature- Must be person authorized to sign for all Insureds. Colony Insurance Company Insurance Company Print Name Policy Number Named Insured Date Submission Number Producer Number Producer Name Street Address City, State, Zip The producer shown above is the wholesale insurance broker your insurance agent used to place your insurance coverage with us. Please discuss this Disclosure with your agent before signing. TRIA2002Notice-0108 Page 1 of 1

9 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. LIMITED TERRORISM EXCLUSION (OTHER THAN CERTIFIED ACTS OF TERRORISM) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART A. The following exclusion is added: TERRORISM AND PUNITIVE DAMAGES This insurance does not apply to any injury or damage arising out of or resulting, directly or indirectly, from: (1) Other acts of terrorism, including any action taken in hindering or defending against an actual or expected incident of other acts of terrorism ; or (2) Any act of terrorism: (a) that involves the use, release or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination; or (b) that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or (c) in which pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials; regardless of any other cause or event that contributes concurrently or in any sequence to the injury or damage in (1) or (2) above; including (3) Damages arising out of or resulting, directly or indirectly, from (1) or (2) above that are awarded as punitive damages. B. In the event of any act of terrorism or an other act of terrorism that is not subject to this exclusion, coverage does not apply to any loss or damage that is otherwise excluded under this Coverage Part. C. If aggregate insured losses attributable to terrorist acts certified under the federal Terrorism Risk Insurance Act exceed $100 Billion in a Program Year (January 1 through December 31) and we have met our insurer deductible under the Terrorism Risk Insurance Act, we shall not be liable for the payment of any portion of the amount of such losses that exceeds $100 Billion, and in such case insured losses up to that amount are subject to pro rata allocation in accordance with procedures established by the Secretary of the Treasury. D. The following definitions are added to the DEFINITIONS Section: For the purposes of this endorsement, any injury or damage means any injury or damage covered under any Coverage Part to which this endorsement is applicable, and includes but is not limited to any damage, bodily injury, property damage, personal and advertising injury, injury or environmental damage as may be defined in any applicable Coverage Part. Certified act of terrorism means an 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 pursuant to the federal Terrorism Risk Insurance Act of The criteria contained in the Terrorism Risk Insurance Act for a certified act of terrorism include the following: UCG Includes copyrighted material of ISO Properties, Inc., 2002 Page 1 of 2

10 a. The act resulted in insured losses in excess of $5 million in the aggregate, attributable to all types of insurance subject to the Terrorism Risk Insurance Act; and b. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals 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. Other 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 Multiple incidents of an other act of terrorism which occur within a seventy-two hour period and appear to be carried out in concert or to have a related purpose or common leadership shall be considered to be one incident. ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED. UCG Includes copyrighted material of ISO Properties, Inc., 2002 Page 2 of 2

11 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. LIMITED TERRORISM EXCLUSION (OTHER THAN CERTIFIED ACTS OF TERRORISM) This endorsement modifies insurance provided under the following: FARM LIABILITY COVERAGE PART A. The following exclusion is added: TERRORISM AND PUNITIVE DAMAGES This insurance does not apply to any injury or damage arising out of or resulting, directly or indirectly, from: (1) Other acts of terrorism, including any action taken in hindering or defending against an actual or expected incident of other acts of terrorism ; or (2) Any act of terrorism: (a) that involves the use, release or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination; or (b) that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or (c) in which pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials; regardless of any other cause or event that contributes concurrently or in any sequence to the injury or damage in (1) or (2) above; including (3) Damages arising out of or resulting, directly or indirectly, from (1) or (2) above that are awarded as punitive damages. B. Exclusion g. under Paragraph 2. Exclusions of SECTION I COVERAGE J MEDICAL PAY- MENTS does not apply. C. In the event of any act of terrorism or an other act of terrorism that is not subject to this exclusion, coverage does not apply to any loss or damage that is otherwise excluded under this Coverage Part. D. If aggregate insured losses attributable to terrorist acts certified under the federal Terrorism Risk Insurance Act exceed $100 Billion in a Program Year (January 1 through December 31) and we have met our insurer deductible under the Terrorism Risk Insurance Act, we shall not be liable for the payment of any portion of the amount of such losses that exceeds $100 Billion, and in such case insured losses up to that amount are subject to pro rata allocation in accordance with procedures established by the Secretary of the Treasury. E. The following definitions are added to the DEFINITIONS Section: For the purposes of this endorsement, any injury or damage means any injury or damage covered under any Coverage Part to which this endorsement is applicable, and includes but is not limited to any damage, bodily injury, property damage, personal and advertising injury, injury or environmental damage as may be defined in any applicable Coverage Part. Certified act of terrorism means an 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 pursuant to the federal Terrorism Risk Insurance Act of The criteria contained in the Terrorism Risk Insurance Act for a certified act of terrorism include the following: a. The act resulted in insured losses in excess of $5 million in the aggregate, attributable to all types of insurance subject to the Terrorism Risk Insurance Act; and UCG2171A-0108 Includes copyrighted material of ISO Properties, Inc., 2002 Page 1 of 2

12 b. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals 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. F. Other 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 Multiple incidents of an other act of terrorism which occur within a seventy-two hour period and appear to be carried out in concert or to have a related purpose or common leadership shall be considered to be one incident. ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED. UCG2171A-0108 Includes copyrighted material of ISO Properties, Inc., 2002 Page 2 of 2

13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CERTIFIED ACTS OF TERRORISM AND OTHER ACTS OF TERRORISM EXCLUSION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART LIQUOR LIABILITY COVERAGE PART OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART RAILROAD PROTECTIVE LIABILITY COVERAGE PART A. The following exclusion is added: TERRORISM AND PUNITIVE DAMAGES This insurance does not apply to any injury or damage arising out of or resulting, directly or indirectly, from: (1) Certified acts of terrorism or other acts of terrorism, including any action taken in hindering or defending against an actual or expected incident of certified acts of terrorism or other acts of terrorism ; or (2) Any act of terrorism: (a) that involves the use, release or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination; or (b) that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or (c) in which pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials; regardless of any other cause or event that contributes concurrently or in any sequence to the injury or damage in (1) or (2) above; including (3) Damages arising out of or resulting, directly or indirectly, from (1) or (2) above that are awarded as punitive damages. B. In the event of an act of terrorism, a certified act of terrorism or an other act of terrorism that is not subject to this exclusion, coverage does not apply to any loss or damage that is otherwise excluded under this Coverage Part. C. The following definitions are added to the DEFINITIONS Section: For the purposes of this endorsement, any injury or damage means any injury or damage covered under any Coverage Part to which this endorsement is applicable, and includes but is not limited to any damage, bodily injury, property damage, personal and advertising injury, injury or environmental damage as may be defined in any applicable Coverage Part. Certified act of terrorism means an 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 pursuant to the federal Terrorism Risk Insurance Act of The criteria contained in the Terrorism Risk Insurance Act for a certified act of terrorism include the following: a. The act resulted in insured losses in excess of $5 million in the aggregate, attributable to all types of insurance subject to the Terrorism Risk Insurance Act; and b. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals as part of an effort to coerce the civilian UCG Includes copyrighted material of ISO Properties, Inc., 2002 Page 1 of 2

14 population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Other 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 Multiple incidents of an other act of terrorism which occur within a seventy-two hour period and appear to be carried out in concert or to have a related purpose or common leadership shall be considered to be one incident. ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED. UCG Includes copyrighted material of ISO Properties, Inc., 2002 Page 2 of 2

15 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CERTIFIED ACTS OF TERRORISM AND OTHER ACTS OF TERRORISM EXCLUSION This endorsement modifies insurance provided under the following: FARM LIABILITY COVERAGE PART A. The following exclusion is added: TERRORISM AND PUNITIVE DAMAGES This insurance does not apply to any injury or damage arising out of or resulting, directly or indirectly, from: Any injury or damage arising, directly or indirectly, out of: (1) Certified acts of terrorism or other acts of terrorism, including any action taken in hindering or defending against an actual or expected incident of certified acts of terrorism or other acts of terrorism ; or (2) Any act of terrorism: (a) that involves the use, release or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination; or (b) that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or (c) in which pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials; regardless of any other cause or event that contributes concurrently or in any sequence to the injury or damage in (1) or (2) above; including (3) Damages arising out of or resulting, directly or indirectly, from (1) or (2) above that are awarded as punitive damages. B. Exclusion g. under Paragraph 2. Exclusions of SECTION I COVERAGE J MEDICAL PAY- MENTS does not apply. C. In the event of any act of terrorism or an other act of terrorism that is not subject to this exclusion, coverage does not apply to any loss or damage that is otherwise excluded under this Coverage Part. D. The following definitions are added to the DEFINITIONS Section: For the purposes of this endorsement, any injury or damage means any injury or damage covered under any Coverage Part to which this endorsement is applicable, and includes but is not limited to any damage, bodily injury, property damage, personal and advertising injury, injury or environmental damage as may be defined in any applicable Coverage Part. Certified act of terrorism means an 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 pursuant to the federal Terrorism Risk Insurance Act of The criteria contained in the Terrorism Risk Insurance Act for a certified act of terrorism include the following: a. The act resulted in insured losses in excess of $5 million in the aggregate, attributable to all types of insurance subject to the Terrorism Risk Insurance Act; and b. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals as part of an effort to coerce the civilian UCG2175A-0108 Includes copyrighted material of ISO Properties, Inc., 2002 Page 1 of 2

16 population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. Other 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 Multiple incidents of an other act of terrorism which occur within a seventy-two hour period and appear to be carried out in concert or to have a related purpose or common leadership shall be considered to be one incident. ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED. UCG2175A-0108 Includes copyrighted material of ISO Properties, Inc., 2002 Page 2 of 2

17 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. LIMITED EXCLUSION OF ACTS OF TERRORISM (OTHER THAN CERTIFIED ACTS OF TERRORISM) This endorsement modifies insurance provided under the following: COMMERCIAL CRIME COVERAGE FORM COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART FARM COVERAGE PART STANDARD PROPERTY POLICY A. The following Exclusion is added: We will not pay for loss or damage caused directly or indirectly by the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss except for ensuing fire but only to the extent as required by state statute as indicated in item B., below. EXCLUSION OF AN OTHER ACT OF TERRORISM We will not pay for loss or damage caused directly or indirectly by an other act of terrorism, including action in hindering or defending against an actual or expected incident of an other act of terrorism. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. EXCLUSION OF NUCLEAR, BIOLOGICAL OR CHEMICAL TERRORISM We will not pay for loss or damage caused directly or indirectly by any act of terrorism: 1. that involves the use, release or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination; or 2. that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or 3. in which pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials; including action in hindering or defending against an actual or expected incident of terrorism. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. In the event of any incident of terrorism that is not subject to this Nuclear, Biological or Chemical terrorism Exclusion, coverage does not apply to any element of loss or damage that is otherwise excluded under this Coverage Part or Standard Property Policy But with respect to any such activity that also comes within the terms of the War And Military Action Exclusion, that exclusion supersedes this Terrorism Exclusion. In the event of an incident of terrorism that involves nuclear reaction or radiation, or radioactive contamination, this Terrorism Exclusion supersedes the Nuclear Hazard Exclusion. B. Exception Covering Certain Fire Losses If an other act of terrorism results in fire, we will pay for the loss or damage caused by that fire, to the extent as required by state statute. Such coverage for fire applies only to direct loss or damage by fire to Covered Property. Therefore, for example, the exception does not apply to insurance provided under Business Income and/or Extra Expense coverage forms or endorsements which apply to those forms, or to the Legal Liability Coverage Form or the Leasehold Interest Coverage Form. UIL Includes copyrighted material of Insurance Services Office, 2002 Page 1 of 2

18 C. Conditional Limit On Certified Terrorism Losses If aggregate insured losses attributable to terrorist acts certified under the federal Terrorism Risk Insurance Act exceed $100 Billion in a Program Year (January 1 through December 31) and we have met our insurer deductible under the Terrorism Risk Insurance Act, we shall not be liable for the payment of any portion of the amount of such losses that exceeds $100 Billion, and in such case insured losses up to that amount are subject to pro rata allocation in accordance with procedures established by the Secretary of the Treasury. D. Application Of Other Exclusions The terms and limitations of any terrorism exclusion, or the inapplicability or omission of terrorism exclusion, do not serve to create coverage for any loss which would otherwise be excluded under this Coverage Part or Policy, such as losses excluded by the Nuclear Hazard Exclusion or the War And Military Action Exclusion. But with respect to any such activity that also comes within the terms of the War And Military Action Exclusion, that exclusion supersedes this Terrorism Exclusion. In the event of an act of terrorism that involves nuclear reaction or radiation, or radioactive contamination, this Terrorism Exclusion supersedes the Nuclear Hazard Exclusion. E. The following definitions are added with respect to the provisions of this endorsement: Certified act of terrorism means an 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 pursuant to the federal Terrorism Risk Insurance Act of The criteria contained in the Terrorism Risk Insurance Act for a certified act of terrorism include the following: a. The act resulted in insured losses in excess of $5 million in the aggregate, attributable to all types of insurance subject to the Terrorism Risk Insurance Act; and b. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals 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. Other 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 Multiple incidents of an other act of terrorism which occur within a seventy-two hour period and appear to be carried out in concert or to have a related purpose or common leadership shall be considered to be one incident. ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED. UIL Includes copyrighted material of Insurance Services Office, 2002 Page 2 of 2

19 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. EXCLUSION OF CERTIFIED ACTS AND OTHER ACTS OF TERRORISM This endorsement modifies insurance provided under the following: COMMERCIAL CRIME COVERAGE FORM COMMERCIAL CRIME POLICY COMMERCIAL INLAND MARINE COVERAGE PART COMMERCIAL PROPERTY COVERAGE PART FARM COVERAGE PART STANDARD PROPERTY POLICY A. The following Exclusion is added: We will not pay for loss or damage caused directly or indirectly by the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss except for ensuing fire but only to the extent as required by state statute as indicated in item B., below. EXCLUSION OF CERTIFIED ACTS AND OTHER ACTS OF TERRORISM We will not pay for loss or damage caused directly or indirectly by a certified act of terrorism or an other act of terrorism, including action in hindering or defending against an actual or expected incident of terrorism. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. But with respect to any such activity that also comes within the terms of the War And Military Action Exclusion, that exclusion supersedes this Terrorism Exclusion. In the event of an act of terrorism that involves nuclear reaction or radiation, or radioactive contamination, this Terrorism Exclusion supersedes the Nuclear Hazard Exclusion. EXCLUSION OF NUCLEAR, BIOLOGICAL OR CHEMICAL TERRORISM We will not pay for loss or damage caused directly or indirectly by any act of terrorism: 1. that involves the use, release or escape of nuclear materials, or directly or indirectly results in nuclear reaction or radiation or radioactive contamination; or 2. that is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or 3. in which pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the terrorism was to release such materials; including action in hindering or defending against an actual or expected incident of terrorism. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. In the event of any incident of terrorism that is not subject to this Nuclear, Biological or Chemical terrorism Exclusion, coverage does not apply to any element of loss or damage that is otherwise excluded under this Coverage Part or Standard Property Policy But with respect to any such activity that also comes within the terms of the War And Military Action Exclusion, that exclusion supersedes this Terrorism Exclusion. In the event of an incident of terrorism that involves nuclear reaction or radiation, or radioactive contamination, this Terrorism Exclusion supersedes the Nuclear Hazard Exclusion. UIL Includes copyrighted material of ISO, 2002 Page 1 of 2

20 B. Exception Covering Certain Fire Losses If a certified act of terrorism or an other act of terrorism results in fire, we will pay for the loss or damage caused by that fire, to the extent as required by state statute. Such coverage for fire applies only to direct loss or damage by fire to Covered Property. Therefore, for example, the exception does not apply to insurance provided under Business Income and/or Extra Expense coverage forms or endorsements which apply to those forms, or to the Legal Liability Coverage Form or the Leasehold Interest Coverage Form. C. The following definitions are added with respect to the provisions of this endorsement: Certified act of terrorism means an 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 pursuant to the federal Terrorism Risk Insurance Act of The criteria contained in the Terrorism Risk Insurance Act for a certified act of terrorism include the following: a. The act resulted in insured losses in excess of $5 million in the aggregate, attributable to all types of insurance subject to the Terrorism Risk Insurance Act; and b. The act is a violent act or an act that is dangerous to human life, property or infrastructure and is committed by an individual or individuals 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. Other 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 Multiple incidents of an other act of terrorism which occur within a seventy-two hour period and appear to be carried out in concert or to have a related purpose or common leadership shall be considered to be one incident. ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED. UIL Includes copyrighted material of ISO, 2002 Page 2 of 2