What it does
The Terrorism Risk Insurance Act requires insurers to disclose to policyholders the premium charged for coverage of certified acts of terrorism and the federal government's share of terrorism losses. IL 09 85 is ISO's disclosure form. It states that it grants no coverage and does not change any policy terms.
Contents (12 20 edition)
- Schedule Part I: the terrorism premium for certified acts and the coverage parts it applies to, plus any additional information.
- Schedule Part II: the federal share of terrorism losses. The 12 20 specimen shows 80%.
- Disclosure of federal participation: the U.S. Treasury pays the stated percentage of insured terrorism losses above the insurer's retention. It makes no payment for losses above $100 billion in a calendar year.
- Cap on insurer participation: if aggregate insured losses from certified acts exceed $100 billion in a calendar year and the insurer has met its TRIA deductible, the insurer is not liable for losses above $100 billion. Losses up to that amount are subject to pro rata allocation under Treasury procedures.
Editions
The 01 15 edition, with year-by-year federal share entries, appears on policies issued after the 2015 reauthorization. The 12 20 edition shows a single federal share entry.
Quoting and selling notes
- Present terrorism coverage and its price at quote. Many insurers require a signed acceptance or rejection.
- If coverage is rejected, a certified-acts exclusion such as IL 09 53 (property) applies. If accepted, the cap endorsement IL 09 52 typically applies.
- IL 09 99 is an alternate disclosure that shows premium through year-end plus an estimate beyond that date.
