Changes to Terrorism Risk Insurance ActAXIS Insurance
11680 Great Oaks Way, Suite 500
Alpharetta, GA 30022
March 28, 2008
City of Kalispell
P.O. Box 1977
Kalispell, Montana 59901
AXIS Surplus Insurance Company
F_,A T T733148/0 U2008
4/l/2008 to 4/1/2009
Re: Changes to Terrorism Risk Insurance Act
Dear City of Kalispell:
On December 26, 2007, President Bush signed into law the Terrorism Risk Insurance Program
Reauthorization Act of 2007, which changed certain provisions of the Terrorism Risk Insurance
Act of 2002, as amended (the "Act").
Among other changes, Congress changed the definition of a "certified act of terrorism" under the
Act. The definition of "certified acts of terrorism" under the Act no longer requires that the act
of terrorism be committed by or on behalf of a foreign interest. Therefore, coverage for
"certified acts of terrorism" now encompasses, for example, an act committed against the United
States government by a United States citizen, when the act is determined by the federal
government to be a "certified act of terrorism" under the terms of the federal Terrorism Risk
Insurance Program. However, your coverage remains subject to all policy exclusions (for
example, nuclear hazard and war exclusions) and other policy provisions.
Under the Terrorism Risk Insurance Program we are required to provide you with a new offer for
terrorism coverage consistent with the terms of the Terrorism Risk Insurance Program
Reauthorization Act of 2007 and to also disclose certain aspects of the program to you.
Attached please find a disclosure notice that reflects the changes brought about by the Terrorism
Risk Insurance Program Reauthorization Act of 2007 and offers terrorism coverage to you. The
attached disclosure notice replaces any disclosure notice that was provided to you previously.
If you have any questions regarding the changes to the coverage afforded by your policy or the
attached disclosure notice, please contact your agent or broker.
Cc: Peter Scott
CRUMP E & S OF SAN FRANCISCO INSURANCE SERVICES INC
160 Spear Street, San Francisco, CA 94105
City of Kalispell
EAU73314810112008
AXIS Surplus Insurance Company
Josie Loney, CPIA
AXIS US Insurance
11680 Great Oaks Way
Suite 500
Alpharetta, GA 30022
POLICYHOLDER DISCLOSURE
NOTICE OF TERRORISM
INSURANCE COVERAGE
You are hereby notified that under the Terrorism Risk Insurance Act, as amended (the "Act"), that you have a right to purchase
insurance coverage for losses resulting from acts of terrorism, as defined in Section 102(1) of the Act: The term "act of terrorism"
means any act that is certified by the Secretary of the Treasury —in concurrence with the Secretary of State, and the Attorney General
of the United States —to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property, or infrastructure;
to have resulted in damage within the United States, or outside the United States in the case of certain air carriers or vessels or the
premises of a United States mission; and to have been committed by an individual or individuals as part of an effort to coerce the
civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.
YOU SHOULD KNOW THAT WHERE COVERAGE IS PROVIDED BY THIS POLICY FOR LOSSES RESULTING FROM
CERTIFIED ACTS OF TERRORISM, SUCH LOSSES MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES
GOVERNMENT UNDER A FORMULA ESTABLISHED BY FEDERAL LAW. HOWEVER, YOUR POLICY MAY CONTAIN
OTHER EXCLUSIONS WHICH MIGHT AFFECT YOUR COVERAGE, SUCH AS AN EXCLUSION FOR NUCLEAR EVENTS.
UNDER THE FORMULA, THE UNITED STATES GOVERNMENT GENERALLY REIMBURSES 85% OF COVERED
TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAID BY THE INSURANCE
COMPANY PROVIDING THE COVERAGE. THE PREMIUM CHARGED FOR THIS COVERAGE IS PROVIDED BELOW
AND DOES NOT INCLUDE ANY CHARGES FOR THE PORTION OF LOSS THAT MAY BE COVERED BY THE FEDERAL
GOVERNMENT UNDER THE ACT.
YOU SHOULD ALSO KNOW THAT THE TERRORISM RISK INSURANCE ACT, AS AMENDED, CONTAINS A $100
BILLION CAP THAT LIMITS U.S. GOVERNMENT REIMBURSEMENT AS WELL AS INSURERS' LIABILITY FOR LOSSES
RESULTING FROM CERTIFIED ACTS OF TERRORISM WHEN THE AMOUNT OF SUCH LOSSES IN ANY ONE
CALENDAR YEAR EXCEEDS $100 BILLION. IF THE AGGREGATE INSURED LOSSES FOR ALL INSURERS EXCEED $100
BILLION, YOUR COVERAGE MAY BE REDUCED.
If, as a part of your policy, you also elect to purchase this terrorism coverage from us, you will be charged an
additional premium based on a full policy period premium of $2500. If you wish to purchase coverage, within
30 days of March 28, 2008, please indicate your acceptance at the bottom of this notice, sign it and return it to
the address indicated above. If you accept our offer within thirty days of the date indicated, we will charge you
a pro -rated portion of the full policy period premium from the date of your acceptance through the end of the
policy period. If we do not receive your acceptance within 30 days of the date indicated, then we shall
deem your lack of response to be a rejection of this offer.
1 ''
I hereby elect to purchase terrorism coverage for the premium as indicated above.
Policyholder/Applicant's Signature
Print Name
Date
Fk, BIT FUM—A ME -11 FR.TETIMMIN
MMIJ ..
We are required by the Terrorism Risk Insurance Act, as amended ("the "Act") to provide policyholders with certain clear and
conspicuous disclosures. This notice must be provided at the time of offer, purchase and renewal of the policy.
We have provided you with a notice that meets the Act's requirements. You are instructed to deliver a copy of this notice to our
prospective insured.
Includes copyrighted material 2007 National Association of Insurance Commissioners
re-NEWIWMIX