The U.S. Treasury Department’s second set of guidelines to aid insurers in complying with the Federal Terrorism Risk Insurance Act, issued Dec. 18, addresses insurer participation in general, scope of coverage, issues regarding different categories of insurers and additional disclosure guidance.
“The Alliance of American Insurers is pleased with Treasury’s latest interim guidance,” Roger Kenney, Alliance associate vice president, commented. “Treasury’s quick work in addressing important issues bodes well for the successful implementation of the Terrorism Risk Insurance Program, and is of great benefit to the insurance industry as it works to carry it out.”
The latest guidelines offer additional assistance to insurers to help them determine whether they are covered by, and how they may comply with, the provisions of the Terrorism Risk Insurance Act prior to the issuance of final regulations by the Treasury. All entities that meet the program’s definition of “insurer” must participate in the program, including state-licensed or admitted insurers, eligible alien surplus line carriers, and insurers that are approved by federal agencies in connection with maritime, aviation or energy activity.
In addition, the notice provides guidance concerning the scope of insurance coverage, including geographic scope, under the program, and how an insurer can calculate its deductible for purposes of the program.
These guidelines and those previously issued Dec. 3 can be relied upon by insurers to comply with the statutory requirements and are intended to assist insurers prior to Treasury issuing regulations.
“Other issues remain, but we are pleased with the effort and professionalism of the Treasury staff assigned to the program,” Kenney added.
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