Frank J. Coyne, chairman, president and chief executive officer for the Jersey City, N.J.-based ISO said, "We are committed to providing insurers with necessary coverage and pricing tools to respond to this act as quickly as possible."

He said ISO recognizes "the urgency for insurers as they gear up to meet the needs of various business sectors--especially construction, real estate and related services. They and others have been forced to curtail or defer work without coverage against the catastrophic exposure of large-scale terrorism."

With a federal backstop for up to $100 billion in insured losses, the federal program requires mandatory participation by commercial lines property and casualty insurers, and these insurers must make available terrorism coverage for certified acts of terrorism.

The law voids terrorism exclusions on in-force policies as well as state regulatory approvals for such exclusions to the extent those exclusions apply to losses covered by the act.

Insurers are permitted to reinstate the preexisting terrorism exclusions, if policyholders advise in writing they are declining terrorism coverage or do not pay the additional premium for terrorism coverage, if one is charged.

ISO filed insurance policy language for excluding terrorism coverage for commercial property and liability following the September 11 terrorist attacks at the World Trade Center, the Pentagon and in Pennsylvania.

ISO noted that estimates of insured losses from the attacks range from $30 billion to $50 billion

ISO said, in response to the new legislation it is developing and filing new policy forms for insurers to use on existing, new and renewal policies.

"These policy forms will provide insurers with the tools to implement the coverage aspects of the federal program in a timely manner and to manage the overall terrorism exposure," said Mr. Coyne.

ISO will also file rating information for the various terrorism coverage options. This information will incorporate analysis from the recently released Terrorism Loss Estimation Model developed by AIR Worldwide Corporation, a wholly owned ISO subsidiary.

ISO said its rating information will include loss costs (projections of future claims) for commercial property policies,

percentage surcharges for general liability policies, and a combination approach for businessowners policies.

The company said it is also developing sample disclosure notices insurers can use to meet the act's requirement to disclose the premium they may charge for insured losses covered by the act and the federal government's share of compensation for those losses.