Insurers can continue to use ISO's portfolio of terrorism insurance endorsements and related rules without any revisions under the Terrorism Risk Insurance Extension Act of 2005, signed into law by President Bush. Congress enacted the Terrorism Risk Insurance Act of 2002 (TRIA) as a federal backstop for the property/casualty insurance industry. TRIA was set to expire on Dec. 31, 2005, but the new law extends TRIA for two years through Dec. 31, 2007.

"Revisions to ISO's portfolio of terrorism endorsements and related rules are not necessary in response to TRIA's extension," says Kevin B. Thompson, ISO senior vice president, insurance services. "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. ISO will file a revised line item disclosure endorsement in early 2006 to reflect the federal government's reduced share of losses in 2007--from 90 percent to 85 percent--and revised conditional endorsements to eliminate references to the original TRIA expiration of Dec. 31, 2005."

With respect to the conditional endorsements ISO introduced in 2004 to allow insurers to address the uncertainties over TRIA's scheduled Dec. 31 sunset, Thompson says, "ISO drafted the original conditional endorsements to meet contingency situations, and they address the situation exactly as intended. For those lines of business that will continue to be covered by TRIA, the conditional endorsements will not become operative and underlying policy provisions with respect to terrorism will remain unchanged and continue in effect." For those lines of insurance that have been newly excluded from TRIA, such as commercial auto, the conditional endorsements become operative as originally intended, he adds.