The American Insurance Association has issued a bulletin urging Connecticut legislators to support the creation of a terrorism exclusion in the Standard Fire Policy (HB 5200).
“This change will help to stabilize the insurance marketplace by removing an unpredictable and potentially infinite risk in the form of a terrorist attack,” stated Paul Moran, AIA vice president, northeast region. “This bill recognizes that there is a threat that no one thought about before September 11, 2001.”
The AIA said it is “working closely with the Insurance Association of Connecticut to enact this legislation.”
The announcement noted that Louisiana, Michigan, Minnesota, Nebraska, New Hampshire, Oklahoma and Virginia legislators have already provided some form of terrorism exclusion to the SFPs in their states.
The current requirements of Connecticut’s Standard Fire Policy would require insurers to pay for losses from a fire following a terrorist act, even if the policyholder had rejected the terrorism coverage available under the Federal Terrorism Risk Insurance Act. The bill was approved by the Insurance Committee on Tuesday, Feb. 24, and should be ready for action by the House in about three weeks.
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