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BI Daily News (Business Insurance)
California rejects ISO terrorism exclusion
by Meg Fletcher
Posted on Jan. 09, 2002 3:33 PM CST
SACRAMENTO, Calif.—The California Insurance Department has become
the first in the nation to reject a proposed terrorism exclusion for commercial
lines policies.
California Insurance Commissioner Harry W. Low on Monday sent a notice
to the Insurance Services Office Inc. denying its request for limitations
and exclusions for acts of terrorism in commercial lines and homeowners
policies.
Currently, 38 jurisdictions in the United States have adopted suggested terrorism exclusions proposed by Jersey City, N.J.-based ISO, an ISO spokesman said. New York is still considering the matter.
In his notice to ISO, Mr. Low said, "There are a variety of concerns regarding an issue of this magnitude, ranging from limitations of coverage to definitions of terrorism." Among his concerns are that "the term terrorism has been broadly used to define everything ranging from vandalism to hate crimes," and that the proposals may have "anti-competitive effects," Mr. Low said. In addition, the exclusion's $25 million countrywide damage threshold "is unreasonably low," Mr. Low said.
"Our goal is to assure that policy language narrowly defines terrorism to eliminate any possible confusion between insurers and policyholders, especially in personal homeowners coverage," he said.
Most members of the National Assn. of Insurance Commissioners have endorsed exclusionary wording based on ISO's proposed endorsements as a way to help policyholders obtain at least minimal terrorism coverage (BI, Jan 7).
last updated: January 9, 2002
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