1. Forms
2. IL
3. IL-09-98

What the form is

The IL 09 98 is an endorsement that provides a mandatory disclosure to policyholders regarding the premium allocated for coverage of "certified acts of terrorism." This disclosure is required under the Terrorism Risk Insurance Act (TRIA) and its subsequent reauthorizations. Its primary purpose is to clearly communicate to the insured the specific cost component of their insurance premium that is attributed to terrorism coverage, effective through the end of the current calendar year.

Classes of business it applies to

This form is applicable to a wide range of commercial lines of insurance that are subject to TRIA. Examples include:

• Commercial Property
• Commercial General Liability
• Commercial Inland Marine
• Commercial Auto
• Workers' Compensation (specifically the terrorism risk portion of the premium)
• Boiler and Machinery

For instance, a manufacturing business with a Commercial Package Policy, a construction company with General Liability coverage, or a retail store with a Commercial Property policy would typically receive this disclosure if they have opted for terrorism coverage.

Special considerations

• TRIA Compliance: Utilization of this endorsement, or an equivalent state-approved form, is crucial for insurers to maintain compliance with federal TRIA regulations. These regulations mandate transparency concerning terrorism coverage premiums.
• Premium Breakdown: The form distinctly identifies the premium amount charged for coverage of "certified acts of terrorism." This allows the insured to understand this specific cost element within their overall policy premium.
• "Through End Of Year" Significance: The language "Through End Of Year" is important because TRIA and its associated financial mechanisms often operate on a calendar year basis, aligning with the federal program's structure.
• Context of Offer and Rejection: While this form itself is a disclosure of premium for existing or elected coverage, it is often part of a larger package of TRIA-related forms. These may include forms for the policyholder to accept or reject terrorism coverage (which would be separate form numbers).
• State Variations: Although TRIA is a federal law, states may have specific rules or slightly different approved versions of disclosure forms. For example, a Missouri-specific title was noted for an earlier edition.

Key information for agents and underwriters

• Accuracy of Premium: It is paramount to ensure that the premium amount disclosed on the IL 09 98 accurately reflects the calculated portion for terrorism coverage.
• Client Education: Agents should be prepared to explain the purpose and necessity of this disclosure to their clients, emphasizing that it is a federally mandated notification related to TRIA.
• Record Keeping: Maintaining proper documentation confirming that this disclosure was provided to the policyholder is essential for regulatory compliance and audit purposes.
• Holistic TRIA Process: Underwriters must ensure that the IL 09 98 is used in conjunction with all other required TRIA-related endorsements for the specific policy and jurisdiction. This includes forms for offering coverage, documenting rejection if applicable, and any relevant exclusionary endorsements.
• Edition Date Management: Insurance professionals must use the correct and currently approved edition date of the form for the specific state and policy period. TRIA has undergone several reauthorizations and amendments, which can lead to updates in disclosure forms and requirements.