Terrorism insurance backstop guidance doesn't address lapse
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The Federal Insurance Office's new interim guidance on terrorism insurance, released Wednesday, does not address the issue of whether the statute that reinstated the federal terrorism insurance backstop would be retroactive to Jan. 1, when the program lapsed.
The question of whether the program would be reinstated retroactively had been a question for insurers and policyholders alike.
However, “The statute was not retroactive, and there's nothing that the Treasury could have issued that makes the program retroactive,” said Ken A. Crerar, president and CEO of the Council of Insurance Agents & Brokers, in a statement issued shortly after the interim guidance appeared.
Instead the guidance focuses on offers of coverage and notices, which drew praise from the Washington-based council.
“This is important instruction on two fronts,” Mr. Crerar said.
“First, that no new notices will be required if the 2014 insurer notices complied with the requirements then in effect; and second, insurers can forbear on exercising conditional exclusions by providing a notice to that effect by April 13 (or make a new offer),” he said. “To the extent that there has been some confusion among insurers and policyholders, this guidance is greatly welcomed.”
FIO intends to replace the interim guidance with formal regulations in the future, but no timetable for doing so has been set.
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