Changes made to the recently extended Terrorism Risk Insurance Act will not require any modifications to ISO's portfolio of terrorism insurance endorsements and related rules, the company said Tuesday.

"Revisions to ISO's portfolio of terrorism endorsements and related rules are not necessary in response to TRIA's extension," said Kevin B. Thompson, senior vice president for Jersey City, N.J.-based Insurance Services Office. "Since the definition of a certified act of terrorism has not changed, the ISO program already complies with the new law, and there is no immediate need to revise coverage forms or endorsements."

Congress passed the extension law shortly before adjourning for the holidays, and President George W. Bush signed the bill on Dec. 22. In addition to extending the program for two years, the legislation also makes several changes designed to reduce the potential exposure for the federal government and shift the burden to insurers.

Among the changes made to the program is an increase in the threshold of damages before the government becomes involved, from $5 million under the original program to $50 million for any event occurring after March 31, 2006 and $100 million for any event occurring in 2007. Additionally, deductibles in the program will increase to 17.5 percent in 2006 and 20 percent in 2007, with industry retention rising to $25 billion and $27.5 billion in 2006 and 2007, respectively. The bill also excludes commercial auto, burglary and theft, surety, professional liability other than directors and officers' liability, and farm owners multiple peril from the TRIA program.

"ISO does not anticipate filing overall changes to its advisory prospective loss costs--anticipated losses from underwriting a class of risk--and factors at this time," Mr. Thompson said. "But ISO will continue to review other influences on terrorism loss costs and rating factors, like the latest terrorism model from ISO's AIR Worldwide subsidiary, and evaluate the need for new filings later next year.

"The bottom line is insurers can continue to use the full complement of ISO tools to manage their terrorism exposure for both TRIA and non-TRIA lines of business," he added.