FOR IMMEDIATE RELEASE
DEPARTMENT ANNOUNCES AGREEMENT WITH EXCESS LINES INSURANCE COMMUNITY TO
OFFER GUIDANCE ON TERRORISM INSURANCE
Standard Creates Limit on Earned Portion of Terrorism Policy Premiums for Brokers
Superintendent Gregory V. Serio today announced that an agreement with an industry coalition resulted in guidelines for the excess line community, which address methods by which Terrorism Risk Insurance Act (TRIA) coverage is earned on excess line policies.
Excess Lines Association of New York (ELANY), a member of the coalition, will publish a Best Practices guidance document which calls for limitations on the earned premium charged to TRIA policies. The guidelines provide a standard that a charge of no more than 25% of the minimum earned premium for terrorism coverage will be employed upon cancellation by the insured.
"Under the guidelines, excess lines carriers should not charge more than 25% of the terrorism premium if an insured opts to cancel their TRIA coverage. These guidelines were adopted to ensure New Yorks businesses are given options in their insurance coverage," said Serio. "New Yorks businesses are already facing a hardening insurance market and should be afforded the ability to shop around for the insurance coverage best-suited to their needs without the unnecessary worry of forfeiting 100% of the premium penalties upon an early cancellation."
The Best Practices guidance document is based on the understanding that ensuring both affordability and availability of terrorism coverage is one of the goals of TRIA.
discussion with the industry was necessitated because it had come to my attention that
some insurers participating in the Terrorism Insurance Program were issuing policies
containing cancellation provisions that dictated that premiums were 100% fully earned upon
policy issuance," added Serio. "These guidelines establish a standard to protect
the insureds ability to shop around for terrorism coverage. The Department remains
committed to ensuring the Best Practice guidelines are implemented completely and