Terrorism exclusion endorsements that do not contain a fire exception have been filed, with a proposed effective date of September 1, 2003, as replacements for the terrorism exclusion endorsements that are currently on file in Michigan. In addition, several of the terrorism rule and rating information manual supplement pages have been updated in order to reflect the change in endorsements.

BACKGROUND

On May 29, 2003, the enactment of House Bill 4432 added Section 2834 to the Michigan Insurance Code for the purpose of exempting from commercial policies that provide property coverage, fire loss caused directly or indirectly by terrorism.

Refer to the following web site address to view a complete copy of House Bill 4432:
http://www.michiganlegislature.org/documents/2003-2004/billenrolled/house/pdf/2003-HNB-4432.pdf

CHANGES

Tables A, B, and C that follow show the programs in which endorsements are being replaced and manual supplement pages are being changed.

NOTE:   The only programs in which endorsement replacements are required are those in which some type of property coverage is provided.

The new endorsements differ from the current endorsements only to the extent that the Terrorism Exclusion present in each new endorsement does not contain a fire exception. A copy of each endorsement that has been submitted in Michigan is available electronically on our public web site, as an attachment to Bulletin 02-0550, at http://www.aaisonline.com/terrorism/bulletins/02-0550.html.

The revised Rule pages differ from the current Rule pages only to the extent that no mention of the standard fire policy is made, and the endorsement numbers shown for each program have been updated to reference exclusion endorsements that do not contain a Fire Exception.

The revised Rating Information page differs from the current Rating Information page only to the extent that the factors shown for Fire-Following Coverage, that previously was required by statute to be provided, have been deleted from the table.

TABLE A  (Certified Exclusion Endorsements)

Program	New Endorsement	Current Endorsement
Agricultural Output	CL 0610 12 02	CL 0620 12 02
Artisans	AP 0710 12 02	AP 0720 12 02
Businessowners	BP 0760 12 02	BP 0770 12 02
Commercial Inland Marine (Filed Classes)	CL 0610 12 02	CL 0620 12 02
Commercial Output	CL 0610 12 02	CL 0620 12 02
Commercial Output XL	CL 0610 12 02	CL 0620 12 02
Commercial Properties	CL 0610 12 02	CL 0620 12 02
Contractors & Developers Output	CL 0610 12 02	CL 0620 12 02
Farm Properties	FL 0610 12 02	FL 0620 12 02
Farmowners	FO 0610 12 02	FO 0620 12 02

TABLE B (Non-Certified Exclusion Endorsements)

 

Program	New Endorsements	Current Endorsements
Agricultural Output	CL 0630 12 02 CL 0650 12 02	CL 0640 12 02 CL 0660 12 02
Artisans	AP 0730 12 02 AP 0750 12 02	AP 0740 12 02 AP 0760 12 02
Businessowners	BP 0780 12 02 BP 0800 12 02	BP 0790 12 02 BP 0810 12 02
Commercial Inland Marine (Filed Classes)	CL 0630 12 02 CL 0650 12 02	CL 0640 12 02 CL 0660 12 02
Commercial Output	CL 0630 12 02 CL 0650 12 02	CL 0640 12 02 CL 0660 12 02
Commercial Output XL	CL 0630 12 02 CL 0650 12 02	CL 0640 12 02 CL 0660 12 02
Commercial Properties	CL 0630 12 02 CL 0650 12 02	CL 0640 12 02 CL 0660 12 02
Contractors & Developers Output	CL 0630 12 02 CL 0650 12 02	CL 0640 12 02 CL 0660 12 02
Farm Properties	FL 0630 12 02 FL 0650 12 02	FL 0640 12 02 FL 0660 12 02
Farmowners	FO 0630 12 02 FO 0650 12 02	FO 0640 12 02 FO 0660 12 02

 TABLE C (Rule and Rating Information Page Supplement)

 

Program	New Supplement Page	Current Supplement Page
Agricultural Output, Artisans, Businessowners, Commercial Inland Marine (Filed Classes), Commercial Liability, Commercial Output, Commercial Output XL, Commercial Properties, Contractors & Developers Output, Crime, Farm Properties, Farmowners, Glass, and Personal & Premises Liability (Farm Only)	Rules -- 2 (Rev 1.1) Rules -- 3 (Rev 1.1) Rules -- 6 (Rev 1.1) Rules -- 7 (Rev 1.1) Rating Information - 1  (Rev 1.1)	Rules -- 2 (Rev 1.0) Rules -- 3 (Rev 1.0) Rules -- 6 (Rev 1.0) Rules -- 7 (Rev 1.0) Rating Information - 1       (Rev 1.0)

INLAND MARINE GUIDE

Michigan does not require rate, rule, or form filings for non-filed Inland Marine Guide classes. However, companies should switch from exclusion endorsements CL 0620 12 02, CL 0640 12 02, and CL 0660 12 02 to exclusion endorsements CL 0610 12 02, CL 0630 12 02, and CL 0650 12 02 as soon as possible. In addition, companies should begin using the "IMG Terrorism Rules Supplement NSFP- IM Exempt", located on the AAIS public web site at http://www.aaisonline.com/terrorism/IMGinfo.html, in place of the current "IMG Terrorism Rules Supplement SFP", when the change in endorsements is made. As was previously the case, the rating information applicable to the Commercial Inland Marine Filed Classes should also be used with the Guide classes.

FILING NUMBERS

The AAIS filing numbers that apply to the certified and non-certified submissions in Michigan in the following tables: