Insurers can continue to use ISO's portfolio of terrorisminsurance endorsements and related rules without any revisionsunder the Terrorism Risk Insurance Extension Act of 2005, signedinto law by President Bush. Congress enacted the Terrorism RiskInsurance Act of 2002 (TRIA) as a federal backstop for theproperty/casualty insurance industry. TRIA was set to expire onDec. 31, 2005, but the new law extends TRIA for two years throughDec. 31, 2007.

"Revisions to ISO's portfolio of terrorism endorsements andrelated rules are not necessary in response to TRIA's extension,"says Kevin B. Thompson, ISO senior vice president, insuranceservices. "Since the definition of a certified act of terrorism hasnot changed, the ISO program already complies with the new law, andthere is no immediate need to revise coverage forms orendorsements. ISO will file a revised line item disclosureendorsement in early 2006 to reflect the federal government'sreduced share of losses in 2007--from 90 percent to 85 percent--andrevised conditional endorsements to eliminate references to theoriginal TRIA expiration of Dec. 31, 2005."

With respect to the conditional endorsements ISO introduced in2004 to allow insurers to address the uncertainties over TRIA'sscheduled Dec. 31 sunset, Thompson says, "ISO drafted the originalconditional endorsements to meet contingency situations, and theyaddress the situation exactly as intended. For those lines ofbusiness that will continue to be covered by TRIA, the conditionalendorsements will not become operative and underlying policyprovisions with respect to terrorism will remain unchanged andcontinue in effect." For those lines of insurance that have beennewly excluded from TRIA, such as commercial auto, the conditionalendorsements become operative as originally intended, he adds.

"The bottom line is insurers can continue to use the fullcomplement of ISO tools to manage their terrorism exposure for bothTRIA and non-TRIA lines of business," says Thompson.