**This bulletin and its attachments have been made available at the AAIS open Web site: AAISonline.com. This bulletin will not be distributed in a paper format.**

ILLINOIS 
SPECIAL EDITIONS OF CERTIFIED TERRORISM ENDORSEMENTS AVAILABLE
Reference Bulletin 02-0550

Special 05 03 editions of the certified terrorism endorsements have been filed for use in the state of Illinois as replacements for the 12 02 endorsement editions that were initially submitted. A copy of each new endorsement is attached to this Bulletin.

At the request of the Illinois Insurance Department, the definition of "certified act of terrorism" has been revised, in all of the endorsements that cover or exclude certified terrorism loss, to include the provisions that prohibit the Secretary of the Treasury from certifying an act of terrorism. Specifically, no act will be certified by the Secretary as an act of terrorism if the act is committed as part of the course of a war declared by the Congress (except with respect to any coverage for workers' compensation) or if property and casualty insurance losses resulting from the act do not exceed $5,000,000 in the aggregate.

While the added terms do not affect the scope of coverage provided or excluded under the AAIS endorsements previously made available, AAIS affiliates are advised to keep these limitations in mind in determining when coverage is or is not provided with respect to loss caused by an act of terrorism.

ENDORSEMENTS

A table which identifies the Certified Terrorism coverage and exclusion endorsements that apply to each Commercial Lines program filed in Illinois is shown below:

Companies should begin using the new 05 03 endorsement editions as soon as possible. Although companies are not required to amend policies that have already been issued to reflect the change in endorsement editions, policies that have been issued with the 12 02 endorsement editions should be considered subject to the same terms and conditions as policies that are issued with the 05 03 endorsement editions.

FILING NUMBERS

The endorsements described in this bulletin have been filed in the state of Illinois. Refer to the following filing numbers in all correspondence directed to the insurance department.

The Illinois Department of Insurance also asked that we remind companies that, in accordance with the Terrorism Risk Insurance Act of 2002, use of the AAIS terrorism endorsements with any risks other than commercial property and casualty risks is not permitted.

COMPANY ACTION

Endorsements

Commercial Lines Programs Other Than Inland Marine Guide and Umbrellas

Companies that have granted AAIS filing authority for forms and endorsements can adopt the endorsements without notifying the insurance department.

Inland Marine Guide

In Illinois, companies are required to file endorsements for non-filed inland marine classes. Companies affiliated for the Inland Marine Guide must make an independent filing to use the special 05 03 editions of the certified terrorism endorsements with any of the Inland Marine Guide classes. For companies that have already submitted a filing of the 12 02 editions and have received an objection, it is recommended that the 05 03 editions be included with your objection response.

Note:  The AAIS terrorism endorsements are not designed for use with the Yacht class.

Commercial and Farm Umbrella Programs

Each company that wishes to adopt these endorsements must do so by establishing an effective date and notifying the Insurance Department in writing. For companies that have already submitted a filing of the 12 02 editions and have received an objection, it is recommended that the 05 03 editions be included with your objection response.

SUPPLIES

The forms and endorsements filed for use in this state have been released to CCH Insurance Services Inc. (CCH), the print vendor for AAIS forms and endorsements. Call CCH at (800) 382-2424 to order forms and endorsements in paper printed format. Call CCH at 800-782-9481 to order the text of AAIS forms in a variety of electronic formats.

AAIS also offers the text of forms and endorsements in limited electronic formats. Call Veronica Clarke at 800/564-AAIS for more information.

ATTACHMENTS

--   CL 0600    05 03   Certified Terrorism Loss
--   CL 0610     05 03   Certified Act of Terrorism Exclusion
--   CL 0620     05 03   Certified Act of Terrorism Exclusion (With Limited Exception)
--   AP 0700     05 03   Certified Terrorism Loss
--   AP 0720     05 03   Certified Act of Terrorism Exclusion (With Limited Exception)
--   BP 0750     05 03   Certified Terrorism Loss
--   BP 0770    05 03   Certified Act of Terrorism Exclusion (With Limited Exception)
--   FL 0600      05 03   Certified Terrorism Loss
--   FL 0620      05 03   Certified Act of Terrorism Exclusion (With Limited Exception)
--   FO 0600     05 03   Certified Terrorism Loss
--   FO 0620     05 03   Certified Act of Terrorism Exclusion (With Limited Exception)
--   GL 0250     05 03   Certified Terrorism Loss
--   GL 0260     05 03   Certified Act of Terrorism Exclusion
--   GL 0310     05 03   Certified Terrorism Loss
--   GL 0320     05 03   Certified Act of Terrorism Exclusion
--   UM 0330   05 03   Certified Terrorism Loss
--   UM 0340    05 03   Certified Act of Terrorism Exclusion
--   UM 0755   05 03   Certified Terrorism Loss
--   UM 0765    05 03   Certified Act of Terrorism Exclusion

Edie Gardner, CPCU
Product Development Specialist
edieg@AAISonline.com

 Copyright, American Association of Insurance Services, Inc., 2003