Wheaton, Ill.-based the American Association of Insurance Services (AAIS) recently announced that it will initiate a countrywide filing of new Businessowners (BOP) manual supplements that include new terrorism loss costs and rating factors.
The new rating information, which has a proposed effective date of Oct. 1, 2007, will address losses arising from both “certified” and “non-certified” acts of terrorism, as well as terrorism losses that occur after termination of the federal terrorism reinsurance program. (Certified acts of terrorism are those that are reinsured under the federal program; uncertified acts are those that are not covered by it.)
The new loss costs apply to property loss, including business interruption, and are based on modeled data developed by one of the nation’s leading catastrophe modeling firms. Within several states, those loss costs will vary according to newly defined terrorism rating territories delineated by ZIP Codes.
Earlier this year, AAIS filed model-based terrorism loss costs with ZIP Code-based territories under its Commercial Properties Program.
In addition, AAIS is filing revised rating factors to be used in calculating the liability component of BOP premium for terrorism coverage. Procedures for developing the property and liability components, which are combined to determine the total BOP terrorism premium, are provided in the manual supplements.
AAIS is a national advisory organization that develops policy forms and rating information used by more than 600 property/casualty companies throughout the U.S.
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