US COMMISSIONERS’ ASSOCIATION AGREES ON TERRORISM EXCLUSIONS

The US National Association of Insurance Commissioners (NAIC) has reached an internal agreement on policy language that will allow US insurers to exclude cover for acts of terrorism. The state regulators’ body announced the policy wording late last year, on the same day that the US Senate adjourned for the seasonal holidays without approving a measure that would have provided a federal backstop for future terrorism-related insurance losses. NAIC president Terri Vaughan said that “given Congress’ failure to act, regulators will begin allowing insurers to exclude terrorism losses if a terrorist act causes total insured losses exceeding $25m”. California, Connecticut and New York were the only states that did not approve the NAIC recommendation to allow terrorism exclusions.