STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
|George E. Pataki
Gregory V. Serio
|Supplement No. 1 to
Circular Letter No. 25 (2002)
February 19, 2003
|TO:||ALL PROPERTY/CASUALTY INSURERS AND RATE SERVICE ORGANIZATIONS DOING BUSINESS IN NEW YORK STATE, NEW YORK PROPERTY INSURANCE UNDERWRITING ASSOCIATION, STATE INSURANCE FUND, NEW YORK AUTOMOBILE INSURANCE PLAN, AND EXCESS LINE ASSOCIATION OF NEW YORK|
|RE:||ADDITIONAL GUIDELINES FOR THE IMPLEMENTATION OF THE PROVISIONS OF THE TERRORISM RISK INSURANCE ACT OF 2002|
REFERENCE: ARTICLES 21, 23, 34, 54 AND 63 OF THE INSURANCE LAW; TERRORISM
RISK INSURANCE ACT OF 2002
Circular Letter No. 25, issued December 23, 2002, provided an explanation of the Terrorism Risk Insurance Act of 2002 (the Act), along with instructions to insurers to assist them in meeting their dual responsibilities under both Federal and New York Law. The purpose of this Supplement is to provide additional guidance regarding filings made with the Department and the issuance of policy forms necessary to implement the provisions of the Act.
In addressing the policyholder disclosure requirements contained in section 103(b)(3) of the Act, the Circular Letter states that the portion of the premium attributable to the terrorism coverage must be provided. Where there is no separately identifiable charge applicable to terrorism coverage, the insurer should indicate that the premium is "0".
Insurers are reminded that all provisions of Section 3426 of the Insurance Law remain applicable to both policies in force as well as new and renewal business written in the admitted market. As previously stated, mid-term premium increases for terrorism coverage provided under the Act are not permitted for policies issued by authorized insurers that already provide for terrorism coverage.
Conditional renewal notice requirements, as provided for in Section 3426 of the Insurance Law, apply to the renewal of policies providing terrorism coverage. Accordingly, where the policy premium for the renewal will exceed the previous policys premium by 10% or more, insurers must provide appropriate notice between 60 and 120 days prior to policy expiration, as required by the statute. Please note that such standards must be met even if the premium involved is attributable to terrorism coverage provided under the Act and the related rates and rating schedules are implemented pursuant to section 106(2)(B) of the Act.
Very truly yours,