On Wednesday, Feb. 4, the Federal Insurance Office within the Department of the Treasury released interim guidance on implementation of the Terrorism Risk Insurance Program Reauthorization Act of 2015, which was signed into law on Jan. 12 and renewed the federal Terrorism Risk Insurance Program through 2020. This provides information to insurers on disclosure and offer requirements for terrorism risk insurance policies that may have been or had the option to be cancelled through exercising a “conditional exclusion” during the gap in the program in early Jan., following Congress’s failure to reauthorize it at the end of the 113th Congress. The guidance was silent on the issue of whether or not the law applies retroactively to cover Jan. 1, 2015 – January 12, 2015 (the gap period), but it does make explicit that if insurers did not exercise a “conditional exclusion” they must provide notice to policy holders that this they opted to forbear on that, and that the forbearance is effective as of Jan. 1, 2015. If a new offer is needed for coverage, insurers have through April 13, 2015 to provide that. Earlier offers which were declined by policy holders do not need to be reissued in order to be in accordance with the law as long as new offers under the law would not be materially different.
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