N.Y.'s Serio Addresses Terrorist Policy Language
By Daniel Hays
NU Online News Service, May 10, 4:03 p.m. EST, Orlando, Fla.?New York Insurance Superintendent Gregory V. Serio told an industry conference today he will issue a bulletin next week regulating policy language for terrorist damage to commercial buildings.
Mr. Serio made the announcement at the annual conference of the National Council on Compensation Insurance here.
Speaking with reporters later, he said in the future he expects to issue other circular letters on terrorism exclusion that will address business interruption and workers' compensation coverage.
New York and California are among the few states that have rejected the Insurance Services Office filing of a standard policy format that excludes terrorism damage coverage from commercial policies.
Mr. Serio said the rule coming out concerning language in commercial property policies would allow carriers to provide actual cash value instead of a replacement cost value for a damaged building.
The rule, he said, would allow for "a tiering of replacement cost value and actual cash value depending on cause of loss."
Mr. Serio said the letter would provide guidance for what was acceptable in insuring individual risks but would not permit for a standard policy draft.
The issue will be handled on a "company-by-company basis," he said. Under the new rule the standard fire policy, which he referred to as the "bedrock" of the regulations, is preserved.
In his talk Mr. Serio urged insurers not to shy away from the market because of uncertainties following Sept. 11, saying insurers would lose a "golden opportunity" to build on the good will they had engendered for their handling of terrorist attacks.
He said that in New York $300 million in workers' comp claims relating to Sept. 11 had been paid.
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