1. Forms
2. CR
3. CR-02-XX

What the form is

The CR 02 XX endorsement series, titled "State Specific Changes" (with the actual state name often included in the title, e.g., "North Carolina Changes CR 02 35" or "South Dakota Changes CR 02 08"), is used to amend standard Commercial Crime insurance policies to comply with the unique laws and regulations of a specific state. Insurance is regulated at the state level, and these endorsements ensure that the crime policy adheres to each jurisdiction's particular requirements. Common modifications can include, but are not limited to, provisions concerning policy cancellation and nonrenewal procedures, conditions under which legal action can be taken against the insurer, notice requirements, and other state-specific mandates.

Classes of business it applies to

CR 02 XX endorsements apply to any commercial or governmental entity purchasing an ISO-based Commercial Crime or Government Crime policy in a state where such an endorsement is required or utilized. This can span a wide array of industries and organization types, as crime coverage is relevant to most businesses.

• Example 1: A municipality in North Carolina purchasing a Government Crime Policy (e.g., CR 00 26) would likely have endorsement CR 02 35 NC attached to modify terms to meet North Carolina statutes.
• Example 2: A retail business in South Dakota with an Employee Theft coverage form (CR 00 20) might have CR 02 08 SD attached to amend cancellation provisions as per South Dakota law.
• Example 3: A non-profit organization in Connecticut with a Commercial Crime Policy might include CR 02 29 CT to align the policy with Connecticut's insurance regulations.

Special considerations

The CR 02 XX endorsements are mandatory in many instances if an insurer uses ISO standard forms in a particular state that has specific requirements not addressed in the base policy. The content of each state's CR 02 XX endorsement will differ based on that state's laws.

• It's crucial to use the correct state-specific endorsement and the correct edition date of that endorsement, as laws and regulations change over time.
• Failure to attach a required state-specific endorsement could lead to compliance issues or disputes over coverage if a claim occurs, potentially resulting in the policy being interpreted in favor of the insured or against the insurer based on state law.
• For example, CR 02 08 for South Dakota has been noted to amend cancellation language or the "Legal Action Against Us" condition to meet state requirements. Similarly, CR 02 10 for Washington modifies cancellation provisions.

Key information for agents and underwriters

• Risk Assessment: While these forms themselves don't typically alter the fundamental risk profile of the insured, they ensure the policy contract is sound from a regulatory standpoint in the state of coverage.
• Pricing: These endorsements generally do not have a direct premium impact themselves, as they are typically for legal compliance rather than coverage expansion or restriction. However, the underlying state laws they address might indirectly influence the overall cost of providing coverage in that state.
• Coverage Gaps: Agents should be aware that these forms primarily address legal and regulatory compliance. They do not usually broaden or restrict the core insuring agreements but ensure the policy operates correctly within a specific state's legal framework.
• Underwriting Guidelines: Underwriters must ensure that the correct and current CR 02 XX endorsement for the applicable state is included in the policy. This is a key part of policy construction and compliance. Insurers often have specific guidelines on which state endorsements are required for each policy type they issue in a given state.
• Staying Updated: Insurance professionals must stay informed about revisions to these state-specific endorsements, as state laws and insurance department regulations are subject to change.