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Leslie Bonacum
Neil Allen

Uniform Information Services Notes Terrorism Exclusion Appearing In Latest Policies

(RIVERWOODS, ILL., February 28, 2002) – State insurance departments are allowing providers of commercial property and casualty insurance to exclude large losses due to terrorism from their coverage because there seems to be no other viable solution, according to Uniform Information Services, a leading provider of insurance information, forms and compliance software.

Joseph Bieniek, Regulatory Compliance Manager for Uniform’s compliance division, says that thus far, the insurance commissioners of 48 states have approved the language of a terrorism exclusion for large losses, and 26 state insurance departments have already given formal notice that they will allow the exclusion to be written into new commercial policies and added to existing policies as they come up for renewal.

"Reinsurance companies, who stand behind the bulk of the policies written by insurers, won’t touch terrorism coverage," Bieniek said. "A proposed government reinsurance program for terrorism failed in the last Congress. Without a backup, insurers feel they could be exposed to catastrophic, bankrupting losses."

"Unheard of" Cooperation

"The insurance industry and state authorities have moved quickly and with unheard of cooperation to craft the terrorism exclusion and approve its use," Bieniek said.

For example, the wording of the exclusion was worked out by ISO (Insurance Services Office, Inc.), one of several private companies that normally charge for the use of their copyrighted forms and policy clauses.

"ISO consulted extensively with the National Association of Insurance Commissioners (NAIC) to develop the language of the exclusion, and promised the Association that they would not charge anyone for the use of the language, whether they were ISO members or not," Bieniek noted.

While the involvement of the NAIC in developing the exclusion’s language is an indication that it will be accepted by the individual state departments of insurance, it may not be entirely smooth sailing for companies adopting the exclusion, Bieniek warned.

"The states are now beginning to issue formal notices on the exclusion, and at least some are requiring companies adopting it to explain why they shouldn’t lower their rates," he noted.

Furthermore, three of the largest states, California, Florida and New York, have yet to endorse the exclusion either formally or informally.

"The political climate in New York has led them to decide not to allow the exclusion at this time," Bieniek observed.

Exclusion Not Total

Policies with the exclusion will still cover losses due to terrorism as long the incident does not involve the release of nuclear, biological or chemical material, and as long as damage to all types of property doesn’t exceed $25 million.

"That 25 million dollar level can be exceeded very quickly," Bieniek said. In addition, policies with the exclusion will still be obliged to cover any property damage losses directly attributable to fire, even if the fire was caused by an incident of terrorism.

"In addition, it’s important to remember that the exclusion only applies to commercial types of insurance," Bieniek added. Personal lines aren’t covered, and the NAIC has indicated that they won’t approve an exclusion for them.

About Uniform Information Services

Uniform is the nation’s number-one provider of compliance related services for the property and casualty insurance industry. The company was founded in Chicago in 1917 as a non-profit to provide standardized uniform-language insurance forms. Today, the company is part of CCH INCORPORATED Business and Finance Group, and is a leader in the advancement of property and casualty compliance and insurance forms automation. To learn more about Uniform, visit the company’s web site at or call 800-503-1896.


CCH INCORPORATED, founded in 1913, has served four generations of business professionals and their clients. The company produces approximately 700 print and electronic products for securities, tax, legal, banking, securities, human resources, health care and small business markets. CCH is a wholly owned subsidiary of Wolters Kluwer North America. The CCH web site can be accessed at The CCH business and finance group web site can be accessed at

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