No Reaction Yet To New ISO Home Terror Exclusion

By Daniel Hays

NU Online News Service, Jan. 22, 3:35 p.m. EST?The Insurance Services Office in Jersey City, N.J. said it had not yet received any reaction from regulators to its revised terrorism exclusion for homeowners and fire insurance policies offered by its members.

Under the amended endorsement, the trigger point for the application of the exclusion was changed from $25 million in damages to $25 million of insured loss, said an ISO representative, Chris Guidette.

Mr. Guidette said the revised filings with insurance departments around the nation were made from one to two weeks ago.

Regulators have been "digesting the filings in light of input from companies and other interested parties," Mr. Guidette said.

He noted that their deliberations might be influenced by the fact that Congress is due to once again consider approving federal loss guarantees to backstop primary insurers who have been unable to secure reinsurance for terrorism.

ISO's terrorism exclusions for commercial liability policies have been approved by all regulators with the exception of New York and California.

Mr. Guidette said changes were submitted for the homeowners polices because, "while there appears to be a little less urgency, we think it's prudent to prepare a tool that insurers can use in the event they feel their homeowners policies are concentrated in a way that would expose them to some outsized loss from a major act of terrorism."

For example, he said, "if terrorists blow up a heating plant in a cold area, thousands of homes could be left without heat. With freezing and pipes bursting you could be looking at extraordinary losses."

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No Reaction Yet To New ISO Home Terror Exclusion

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