INLAND MARINE GUIDE DIC FORMS
AND RATING INFORMATION REVISED

Revised forms, endorsements, and rating information will be released this week for the Difference in Conditions (DIC) section of the AAIS Inland Marine Guide.  This release is the latest in a year-long series of updates providing new and revised forms and/or rating information for the following Guide classes, in addition to DIC:

• Contractors Combination (a new class incorporating several inland marine construction coverages);

• Contractors Equipment;

• Motor Truck Cargo; and

• Warehouse Legal Liability (introducing new cold storage coverage forms).

Later in June, AAIS is scheduled to release revised Transit forms and rating, a revised Renovation and Rehabilitation Builders' Risk form, and a new Mobile Equipment coverage form and rating. Also this year, AAIS developed and filed, where required, a virus or bacteria exclusion under all applicable Guide classes.

DIC coverage, which can be written as a stand-alone policy or in conjunction with a commercial property policy, generally provides property and income insurance for perils, such as flood and earthquake, that are commonly excluded under a standard property policy. It has traditionally been written as a nonfiled class of inland marine insurance.

While DIC policies commonly exclude coverage for named perils insured under property policies (fire, wind, etc.), the revised AAIS DIC section introduces two new forms that allow Guide users to write DIC property or income coverage on an excess basis over underlying property and/or income forms. Those new forms allow carriers to participate in providing "layers" of coverage for a property account.

For information on affiliating with AAIS for use of the Inland Marine Guide, contact Rick Maka, director of marketing, at rickm@AAISonline.com, or by calling 800-564-AAIS.

EQUIPMENT BREAKDOWN OPTIONS DEVELOPED
FOR FARMOWNERS DWELLING COVERAGE

AAIS is initiating a countrywide filing of two new endorsements that would add equipment breakdown coverage for a dwelling insured under a policy based on the AAIS Farmowners Program. The endorsements are being filed with a proposed effective date of Oct. 1, 2007.

In 2004, AAIS introduced the industry's first standardized endorsements for adding equipment breakdown coverage for farm property such as boilers, motors, and generators.

The latest filing will provide options for writing equipment breakdown coverage on household equipment, such as furnaces, hot water heaters, heating/air conditioning systems, and similar types of property. Similar endorsements were filed earlier this year under the AAIS Homeowners Program, but the farm options also include coverage for property that may service both the dwelling and a farm operation, such as well pumps and outdoor electrical wiring.

AAIS's equipment breakdown coverage options were developed in conjunction with The Hartford Steam Boiler Inspection & Insurance Co., one of the nation's leading equipment breakdown reinsurers. The options can be used with any equipment breakdown reinsurer, however.

NEW TERRORISM LOSS COSTS FILED
UNDER BUSINESSOWNERS PROGRAM

AAIS is initiating a countrywide filing of Businessowners (BOP) manual supplements that include new terrorism loss costs and rating factors.

The new rating information, which has a proposed effective date of Oct. 1, 2007, will address losses arising from both "certified" and "non-certified" acts of terrorism, as well as terrorism losses that occur after termination of the federal terrorism reinsurance program.

The new loss costs apply to property loss, including business interruption, and are based on modeled data developed by one of the nation's leading catastrophe modeling firms. Within several states, those loss costs will vary according to newly defined terrorism rating territories delineated by ZIP Codes.

Earlier this year, AAIS filed model-based terrorism loss costs with ZIP Code-based territories under its Commercial Properties Program.

In addition, AAIS is filing revised rating factors to be used in calculating the liability component of BOP premium for terrorism coverage. Procedures for developing the property and liability components, which are combined to determine the total BOP terrorism premium, are provided in the manual supplements.

INSURERS CAN COMMENT
ON NEW UTAH FILING RULES

The Utah Insurance Department has issued proposed rules for implementing its directive, reported in a previous Advisory, that all filings be submitted electronically as of July 1, 2007. Insurers are invited to comment on the proposal.

As of July 1, insurers can choose between two electronic services for submitting filings in Utah:

• The System for Electronic Rate and Form Filing (SERFF), developed under the auspices of the National Association of Insurance Commissioners; and

• A system developed by Sircon Corporation, Okemos, Mich., and associated with a group called the State Insurance Regulators Consortium (SIRC).

AAIS is a licensed third-party provider of SERFF filings, and can submit  custom filings of company forms and manuals, whether or not they are based on AAIS programs. For information, contact compliance@AAISonline.com.

AAISalert  SEEKS INPUT
ON EMERGING EXPOSURES

AAIS invites property/casualty professionals to submit their observations and concerns regarding emerging exposures through our new AAISalert web page.

The AAISalert online submission form asks users to describe new exposures they are concerned about, indicate how they address the exposure or plan to address it, and how it is likely to affect AAIS programs. One need not be a member of AAIS to participate.

Ideas generated through AAISalert may be incorporated into AAIS's program revisions, and may also become topics for meetings and publications

For more information, contact Joseph Harrington, AAIS director of corporate communications, at joeh@AAISonline.com.